By Cadence Mertz
Free Press Staff Writer

By 9 a.m. Dec. 14, 2000

the conference room at the Capitol Plaza hotel in Montpelier was packed. Heavy snow the night before had not deterred the assembly of state regulators, Fletcher Allen Health Care executives in dark suits and onlookers who had come for a second day of hearings on one of the largest construction projects ever proposed in Vermont.

Fletcher Allen executives presented the Renaissance Project, an expansion they said would revitalize the aging hospital, Vermont's largest.

Members of the state commission that reviews hospital projects were enthusiastic. Commissioner Joe Blanchette called the project the "most thoroughly examined and scrutinized proposal" to undergo state oversight in a decade.

It was evident Fletcher Allen would win approval to spend $173.4 million on a new outpatient center, an expanded emergency department, an upgraded birthing center and an education center to link the hospital to the University of Vermont.

"I have a big smile on my face," Fletcher Allen's then-Chief Executive Officer William Boettcher said after the hearing.

Two years later, the hospital is under investigation by state and federal prosecutors. Its top executives are gone and its board is under fire. The cost of the project has doubled, and the state's regulatory process is under scrutiny.

Since early 2000, hospital management had been devising an elaborate plan to evade state scrutiny of at least $150 million in construction costs.

Their plan included misleading state regulators, an off-the-books loan and a policy of keeping hospital trustees in the dark, according to a report by Fletcher Allen trustees who conducted an internal investigation this fall into what went wrong at the hospital.

This is the story of how the scandal came to be -- how the deceptions developed and why and how the truth finally came to light because of the doggedness of a few citizens, the testimony of a former executive, public records requests by the media and an investigation by a state agency that finally realized it had been duped.
July 1, 1998


Fletcher Allen Health Care emerged in 1995 from the joining of three organizations: University Health Center, a doctors group; Fanny Allen Hospital, a Catholic institution; and the Medical Center Hospital of Vermont, a community and teaching hospital. Blending three cultures and balancing the fledgling institution's bottom line proved difficult.

After a rocky start, trustees decided the hospital needed a professional manager.

Fletcher Allen needed someone experienced in tightening the reins, someone who had worked at an academic hospital, former board Chairman Richard Mallary said.

William Boettcher, an executive with the Florida-based Hunter Group, was right for the job, Mallary said. The Hunter Group was known for cutting costs at troubled hospitals.

Boettcher was selected as someone who could run a tight ship. Boettcher's salary and bonuses were tied to the hospital's financial strength and performance.

When he arrived July 1, 1998, Boettcher had sized up the problem. Fletcher Allen was losing money and had quality and management problems. The Renaissance Project was stalled and "each month of delay added $1 million to the project's costs," Boettcher said in an interview cited in the trustees' report.

Boettcher was determined to build it without delay.

Twenty days after Boettcher's arrival, Fletcher Allen filed for a state permit for the expansion. Hospitals must obtain a state permit -- called a certificate of need -- for projects larger than $1.5 million. Fletcher Allen proposed a $118 million project, including a $16.4 million garage. The state monitors hospital spending as a way of controlling consumer costs.

State regulators approved the plan in April 1999, consenting to what would turn out to be just a first draft.

The state would not learn the true scale of the expansion for another three years, despite ordering the hospital that April to provide updates of any changes to the "scope or cost of the project."

By early 2000, the project had grown and costs were rising. Regulators didn't know that.
March 8, 2000


Fletcher Allen obtained the financing for the project through its usual channel -- Salomon Smith Barney's Harlan Sylvester, a close adviser to Gov. Howard Dean and father of David Sylvester, one of the hospital's outside attorneys. Harlan Sylvester has handled Fletcher Allen bond issues for two decades.

In late February 2000, the hospital was preparing to sell $150 million of tax-exempt bonds to help pay for the project. David Cox, the hospital's chief financial officer, went to New York to close the deal.

Boettcher told Cox to proceed with the bond financing even though the project was in flux, Cox would later testify under subpoena to lawyers for the state. Cox said he understood Fletcher Allen Board of Trustee Chairman Philip Drumheller wanted the project to move forward quickly.

"I'm used to having a defined project and then get approvals and then finance it and build it," Cox testified. "In this case, I mean, the project was bouncing around."

He returned from New York in time for a March 8 hospital steering committee meeting at a Williston Road hotel.

David Demers, senior vice president of planning and business development; Thad Krupka, chief operating officer; and David Keelty, vice president of facilities, were members of the committee, according to the trustees' report.

Cox arrived to find the project had changed. The cost had risen dramatically, Cox testified under oath. Hospital executives had been unsure what they wanted to build. As they cast about during the design process, they added space and the costs mounted.

Plans for parking went from a five-story, above-ground structure, to a four-story, underground garage. In March 2000, the garage was estimated at $32 million, double what the hospital had planned on in 1999.

Such changes require permission from the state, so the hospital prepared to reapply for a permit.

CEO Boettcher was concerned.

He believed the permitting process was political and unpredictable, according to the trustees' report. State regulators might say no, putting the whole project in jeopardy.

Boettcher pulled Cox aside when he arrived at the March 8 meeting to discuss ways to build the garage without informing Vermont regulators.

"We need to find a way to do this without going through the CON process," Boettcher told Cox, according to Cox's testimony.

A solution was proposed: The hospital would ask the state for an amended permit, but the permit would cover only part of the expansion. The garage would be done off-the-books, according to Cox's testimony. Other costs were made to look as though they were routine hospital spending, unrelated to the project and not subject to a state permit.


Summer 2000


Fletcher Allen had already had one disagreement with the state Department of Banking, Insurance, Securities and Health Care Administration. The question, unrelated to the Renaissance Project, was whether the hospital should have asked permission to lease space on the Trinity College campus.

Regulators were clear.

"In the future, we expect notification from Fletcher Allen concerning any proposal that arguably might be subject to CON review prior to (Fletcher Allen's) taking any steps to proceed with the project," Susan Gretkowski, deputy commissioner of the Health Care Administration, wrote in a May 2000 letter to Fletcher Allen General Counsel Kim Reidinger.

Instead, hospital managers were working to avoid any state review.

Boettcher restricted cooperation with the Health Care Administration, reversing the hospital's policy of openness with the state agency, Demers told board members in their investigation.

Board members also noticed a change in how management communicated. Former trustee Sara Gear Boyd said management deflected her questions.

"There were a lot of things we were trying to fix, and it was always hard to get information," Boyd said. After Boettcher arrived as CEO, communication worsened, she said.

Fletcher Allen's attorneys were told to find a legal basis for the hospital to skip the state permitting process for the garage, according to a March 2000 e-mail from Downs Rachlin Martin attorney Allen Martin to hospital staff.

Fletcher Allen investigated whether a subsidiary that handles the hospital's self-insurance could build the garage, thus removing it from the hospital's books. Before scrapping the idea, Fletcher Allen managers ran the plan by the subsidiary's board, which included Fletcher Allen trustees Alan Overton, a lawyer, and Dr. Henry Tufo, Cox testified under oath.

Cox then turned for advice to a friend at Shattuck Hammond Partners, an investment bank specializing in health care. He was clear about what he needed, an "off-balance sheet" deal that allowed the garage to remain under hospital control.

The board did not want a "third party to own a piece of real estate in the middle of campus," Cox testified.

Cox told his friend at Shattuck Hammond he "was specifically trying to avoid the need to go through the certificate of need process."

Shattuck Hammond proposed instead a sophisticated deal, called a synthetic lease.

The synthetic lease would make it look as if a third party were building the garage so Fletcher Allen would not need a certificate of need. What Fletcher Allen was really getting, however, was a loan to pay for construction that didn't show up on its books.

The hospital's lawyers were worried about the deal.

Downs Rachlin Martin attorney Allen Martin wrote in an e-mail Oct. 31, 2000, to his law partners: "this approach to the issue of possible CON jurisdiction over the parking garage was stupid and sneaky and likely to cause a big problem latter (sic) on. The garage is the elephant in the corner of the room. It cannot be avoided."

Fletcher Allen Vice President Demers told trustees he never received Martin's e-mail.

In June, Fletcher Allen informed the state that the Renaissance Project had grown. The state responded that the hospital would need to request an amended certificate of need.
Dec. 13-14, 2000


Fletcher Allen senior staff met to prepare for the upcoming CON hearings before the Vermont Public Oversight Commission -- a panel of appointees who recommend a project for approval or rejection. Elizabeth Costle, commissioner of the Department of Banking, Insurance, Securities and Health Care Administration, would make the final decision.

The hearings were to review Fletcher Allen's amended plan -- a bigger project with a bigger price tag, $173.4 million. The garage had been removed from the plan under the explanation that a "third party" or an independent company would construct the facility.

Demers asked Boettcher in one preparation meeting whether the hospital should apply for a permit for the garage.

In his testimony, Cox related Boettcher's response: "Bill said, you know, 'We're going to do it and if I get any trouble, if we get any trouble out of this, then I'll just sue them.'"

The management team set a strategy for skirting the garage issue at the upcoming hearings, Cox testified.

"We discussed the issue of how to handle the certificate of need for the garage, and the direction was that we were to say that the garage was to be built by a third party and just be silent after that," Cox testified. Hospital management omitted information about the synthetic lease from the presentation.

Most of Fletcher Allen's top executives were in the Capitol Plaza's Montpelier Room for the two-day Public Oversight Commission hearing in mid-December 2000. They included Boettcher, Cox, Demers, Chief Operating Officer Thad Krupka, Chief Nursing Officer Letty Piper, Chief Medical Officer John Brumsted. Other hospital staff, outside engineers, architects and consultants were also on hand.

Boettcher introduced the project. Demers did much of the talking.

Demers had been with Fletcher Allen for a decade when he stood at the head table and walked members of the Public Oversight Commission through the project. He could talk about the evolution of the hospital, from community clinics and doctors' offices into Vermont's largest health care delivery system -- consuming roughly 20 percent of the more than $2 billion spent annually on medical care statewide.

What was not said was that the project had grown much bigger than what was being presented and the costs were being hidden.

Hospital executives told members of the Public Oversight Commission that an outside company would build the garage. They didn't say that Fletcher Allen was financially responsible for the garage.

Hospital executives also said the third party would keep a lid on parking rates and return the garage to the hospital after recouping its investment. The plan sounded good, because it meant the money Fletcher Allen would have spent on the garage could be used for costs more directly related to health care, Costle said this month, reflecting on the hearing two years ago.

Health policy consultant Jeanne Keller was at the hearing representing a South Burlington company that provides group rate health insurance to small businesses. Keller told the commission that Fletcher Allen's proposal was too big, too fuzzy. Such an expansion would surely drive up health care costs, she said.

The Public Oversight Commission was unreceptive, she said.

"I caucused with my client out in the hall. We thought it was a noble fight," she said of their discussion after commissioners gave the Renaissance Project a green light. She considered appealing, "but we all agreed it was futile."

Eight months later, Fletcher Allen's attorney Allen Martin would write in an e-mail fretting over the garage deal and how it was presented to the state: "I think the biggest issue will be what the 'boys' said on the record last December."

But on Dec. 14, 2000, the strategy worked. Commissioners praised Fletcher Allen's plan.

"I think it's an excellent project," commission Chairwoman Martha O'Connor said that afternoon. "I feel very comfortable about the vote we are about to make."

On March 2, 2001, Costle granted Fletcher Allen permission for the $173.4 million project.
May 8, 2001


Anne Donahue, editor of a Vermont psychiatric newspaper, was not at the December 2000 hearing. At the time, she knew nothing of the esoteric certificate of need process, she didn't know Jeanne Keller and she had never met Fletcher Allen's CEO.

That would change.

Fletcher Allen management omitted plans for moving the hospital's mental health unit from the plans presented to the Public Oversight Commission. The building that is home to the existing ward would be demolished to make way for the expansion. Where the ward would go was undecided, hospital managers said in December 2000.

In fact, Fletcher Allen planned to move the unit to the Fanny Allen campus in Colchester.

Donahue and other psychiatric activists and patients were outraged when they learned this. Putting mental health patients in Colchester would stigmatize them and distance them from needed medical care, according to the plan's opponents.

A mental health coalition mobilized.

Hospital management invited the coalition for a meeting to discuss the plan. Donahue and other advocates from the mental health community agreed to go because the hospital said the location of the psychiatric unit was still negotiable.

On May 8, 2001, about a dozen mental health advocates met for three hours with Chief Medical Officer Brumsted and hospital Vice President Demers in a conference room on the Trinity College campus, across the street from the hospital. It was immediately apparent, Donahue said, that the location was not up for discussion.

"That was where the real bitterness and the total distrust started," Donahue said this month.

The advocates resolved to block the Colchester plan. Donahue, a lawyer by training, took up the cause.

She wrote hundreds of pages of letters to Boettcher, the governor, BISHCA Commissioner Costle and her deputy Susan Gretkowski, and to the media. She detailed the mental health community's objections to the plan. When that didn't work, she dug deeper into the Renaissance Project.

She went to Burlington's Planning and Zoning Office, rooting through boxes of files for discrepancies in the hospital's plans. She collected folders of hospital documents filed with the Health Care Administration.

"I spent days digging," Donahue recalled in December.

She also contacted Keller, who was well-versed in the certificate of need process.

As Donahue and Keller read the paperwork they found numbers weren't adding up. Information filed with the city differed from what Fletcher Allen told the state.

"We were both arriving at the same conclusions," Keller said, "which was that there was some kind of scam going on."

They alerted the Health Care Administration's Gretkowski and Costle. So did other activists, intent on battling the psychiatric ward move.
July 16, 2001


The hospital was completing the garage deal that summer.

The Fletcher Allen board's executive committee received a one-page memo outlining the deal. The memo, written by Cox, stated the deal's key points, including the more than $50 million cost,, that a third party would pay for the garage and that the lease structure would benefit Fletcher Allen's bottom line.

The executive committee approved the deal during a telephone call July 16, 2001. Committee members in 2001 were Boettcher, board Chairman Philip Drumheller and trustees Alan Overton, Nancy Port and Burton Sobel.

"The minutes do not reflect any discussion of why the cost of the garage increased from roughly $16 million to roughly $55 million," the trustees' report said of the July meeting.

At a later meeting of the full 18-member board, trustees spent 5 minutes hearing the reports of the board's various committees, including the minutes of the meeting that approved the garage deal. Cox's memo was omitted from the record of that board meeting, according to the report.
Dec. 20, 2001


On Aug. 29, 2001, Fletcher Allen presented a short Renaissance Project update during its annual budget review by the Public Oversight Commission. The update included a new price for the garage -- $46 million.

Alarms began sounding at the Health Care Administration. The department asked the hospital to explain why the cost had nearly tripled from the $16.4 million the hospital had last used publicly.

Donahue and others informed the department that not only had the cost of the garage risen, but Fletcher Allen was paying for it -- contrary to what the hospital had asserted a year earlier. If that was true, then the garage, six months into construction, needed a state permit.

Fletcher Allen's six-month progress report, filed with Costle's office in the fall of 2001, left references to the parking garage blank. The report outlined major changes to the project, including the outpatient center's growing by 70,000 square feet.

Costle said the detailed information on the Renaissance Project contrasted with Fletcher Allen's unwillingness to discuss the garage.

"They were just being very evasive," she said this month.

Costle asked for more information. Fletcher Allen was unresponsive. She and her staff began meeting daily to discuss what to do and what the hospital could be hiding.

On Dec. 14, 2001, Costle wrote the hospital another letter demanding details of the garage.

Fletcher Allen's reply, written by Vice President Demers and sent Dec. 18, 2001, offered no new information. Instead, it argued that state regulators had no authority to examine the project.

The letter threatened that if Costle took action against the Renaissance Project or the garage, the hospital's $150 million bonds, approved by the state, would be in danger and would drive up health care costs.

"There was no question when we got this. I was fed up. We'd given them their last chance," Costle said, sitting at her desk this month, shaking the year-old letter in the air. "Basically, they blew us off. I think you really realize that somebody is really jerking you around."

Costle did what her department had never done before: subpoena a Vermont hospital. There was silence on the Fletcher Allen end of the phone when a department lawyer informed hospital attorneys on Dec. 20, 2001, about the subpoena, Costle said.

Costle's decision meant assigning two department attorneys to fight Fletcher Allen over the garage. It meant working weekends. It meant hiring a paralegal to organize garage documents.

Costle's attorneys prepared for battle. They collected 14,000 pages of documents, storing them in what was dubbed the "war room."

The Dec. 20 subpoena was the first of three Costle would use before the garage battle subsided with a settlement six months later. It was also what began unraveling the problems with the Renaissance Project.

Meanwhile, CEO Boettcher's grip on the hospital was beginning to be challenged.

Nurses began their second union effort in four years. They gained steam as the hospital fought with the state over the garage and then lost its battle for public support for the mental health ward move -- finally scrapping the plan to move to Colchester.

Senior staff were expressing displeasure with Boettcher. Drumheller interviewed senior staff in late 2001 and concluded that the CEO had problems with "internal relations with subordinates; external relations with the community and government; and trustee relations."

Boettcher was given 90 days to respond with a plan for improvement. When he did, the board called it "unresponsive," but made no followup.

For his year's work, Boettcher was given a $75,000 bonus based on financial performance and a $120,000 raise. The raise was tied to an annual national survey of CEO salaries done by the Hay Group, according to the trustees' report. Boettcher's annual salary in 2002 was $525,000.
April 3, 2002


David Cox, Fletcher Allen's chief financial officer from 1997 to 2001, had moved on. He was working for a health care consulting firm, commuting to Connecticut from his home in Williston.

Cox said in a brief interview in November that Boettcher "essentially fired" him during the summer of 2001 after Cox disagreed with the need for a permit for the garage and insisted that hospital trustees ought to approve the garage deal.

Costle's department had learned the former CFO was still in Vermont and would be intimately familiar with the details of the garage deal they were investigating.

On March 25, 2002, Costle subpoenaed Cox.

Fletcher Allen's attorneys set up roadblocks at every turn.

"They did scorched earth. They did everything they could," Costle said.

Downs Rachlin Martin attorney Christopher Roy asked Washington County Superior Court to quash the subpoena. Attorneys for the state had no right to approach a former Fletcher Allen employee without notifying the hospital or allowing the hospital's attorneys to be present at Cox's testimony, Roy said. Judge Alan Cheever disagreed.

At 10:02 a.m. April 3 Cox began to tell his story -- under oath.

Cox repeatedly refilled his water glass as he spoke. The testimony, given to Peterson and two other department attorneys, lasted five hours and 20 minutes.

Cox detailed a hospital management that had deliberately defied state regulators. The hospital was paying for the garage through a complex financing deal. The contract with an independent "third party" to build the garage was in fact a loan to the hospital, an off-the-books deal structured precisely to avoid state regulation, he testified under oath.

Many of the Fletcher Allen trustees knew little about the transaction. They had never asked, Cox testified.

"The board -- I don't know what was with them: They didn't ask questions," Cox said in an interview later.

Cox said he asked board Chairman Drumheller for a chance to meet with trustees and provide more detail on the garage deal. Drumheller declined the offer, Cox said in November.

Drumheller could not be reached for comment.

Drumheller said he had no sense of the contents of Cox's testimony. Drumheller said he had considered the battle with Costle's department a "legitimate misunderstanding."

He would not see Cox's testimony until July 2002, after it was released to the media.
July 24, 2002


Fletcher Allen's lawyers from Downs Rachlin Martin fought the state's subpoena of Cox, then fought the department's decision to interview the former chief financial officer, then attempted to have the department's attorneys removed from the case.

"There was more than once that I went home only to take a shower and come back to the office," department Assistant General Counsel Clifford Peterson said. "In my history at BISHCA, there was nothing like the litigation assault brought by Downs Rachlin and Fletcher Allen."

When their strategy failed, the hospital's lawyers threatened to appeal to the Vermont Supreme Court to keep Cox's statements from being used.

The Supreme Court never heard the case. The hospital and the state began working toward a settlement.

Fletcher Allen agreed in June to pay the state $320,000 in exchange for admitting no wrongdoing and the department's granting the permit needed for the garage. Costle included a provision ordering trustees to investigate what had gone wrong. Her goal, she said, was to wake up the board.

Meanwhile, she halted another hospital project, the installation of $9 million of IDX Systems Corp. software, citing yet another failure to get a certificate of need for the expense.

Costle's department released Cox's testimony within days of finalizing the settlement. Media outlets, including The Burlington Free Press, had requested the document under the Vermont Open Records Act. Hospital attorneys tried to block the release, arguing the department lacked a legal basis for releasing the testimony. The department disagreed.

The former executive's sworn statement created a firestorm.

"It was like reading John Dean's testimony. John Dean was Nixon's lawyer," health care policy analyst Keller said. "The garage was like the Watergate break-in itself. It unlocked this entire culture of intimidation and political threats and megalomania."

Hospital trustees had no warning that the testimony was to be released and scrambled to obtain copies, Drumheller said.

"I was blown away because we had no clue," Drumheller said in a December interview. "We had no clue as a board. My first reaction was disbelief that something like that could happen without us knowing."

Boettcher was vacationing when Cox's statements became public. Fletcher Allen spokeswoman Maria McClellan said at the time he was unreachable, possibly sailing in the Pacific.

Drumheller called Boettcher back to Vermont. The board put the CEO on leave July 31 after an emergency meeting during which Boettcher waited in the hall and Drumheller offered to resign. Trustees declined Drumheller's offer.

Federal and state prosecutors announced investigations. The Securities and Exchange Commission sent the hospital a letter of inquiry asking for details on the garage and IDX software.

Gov. Howard Dean weighed in on the scandal, saying investigations of Fletcher Allen would have to balance with keeping the hospital healthy. Rep. Bernie Sanders, I-Vt., later said the Dean administration dropped the ball by not interfering earlier.

"The governor's role should have been a very strong role," Sanders said. Dean did not return calls seeking comment.

Trustees said they were shocked, dumbfounded, embarrassed.

"You don't know what you don't know," Drumheller said early this month, summing up his view of the problem the board encountered.

Activist Donahue says the board should have known. She sent it letters detailing her suspicions. She attended public meetings to air her concerns. The board "chose to ignore" the warning signs, she told the 18 trustees assembled at the board's annual meeting Dec. 12.

"You were told directly and repeatedly that something was very wrong and you ignored the clear evidence," Donahue told trustees. "Until you acknowledge that, you are not taking responsibility."

In the months that followed the release of Cox's testimony, the $55 million parking garage turned out to be only one hidden cost. An audit of the hospital's books revealed that a truer estimate of the Renaissance Project's cost is $326 million. A state-hired architectural firm estimated this month that the project likely will cost closer to $370 million.

Lawyers' fees, permit application fees to amend erroneous information, fines, audit fees and other costs to pay for the hospital's misdeeds are mounting. The results of pending state and federal criminal investigations could take months, Vermont Attorney General William Sorrell said in mid-December.

"I do not think we expected such a large fraud," Commissioner Costle said. "And I still don't feel that I've gotten a good explanation."
Epilogue


Fletcher Allen CEO William Boettcher resigned in September. He took with him a $750,000 retirement package.

The hospital hired Edwin Colodny, former head of USAirways, as interim chief executive. A search for a permanent leader begins in January.

Colodny will captain Fletcher Allen as it requests an amended state permit in early 2003 to cover the increased scope and cost of the project. Colodny recognized the monumental task of healing the hospital's wounded reputation.

"We must resolve whatever issues there are with the state or our employee groups. We don't have the luxury of spending time in conflict," Colodny said Oct. 4, the day his temporary post was announced and the morning after Fletcher Allen nurses voted nearly 2-to-1 to establish a union.

David Demers, senior vice president of planning and business development, and Chief Operating Officer Thad Krupka "agreed to step down," Colodny said. They left Dec. 20. Fletcher Allen would not disclose whether Demers and Krupka were given severance packages. Chief Nursing Officer Letty Piper is gone. General Counsel Kim Reidinger, Fletcher Allen's only in-house lawyer, left during the summer.

Colodny hired former Fletcher Allen attorney and hospital trustee Spencer Knapp to fill in for Reidinger as interim general counsel. The trustees' report suggests strengthening the hospital's in-house legal office.

Fletcher Allen will "substantially" reduce the amount of legal work done for the hospital by Downs Rachlin Martin -- Vermont's largest law firm, which billed nearly $1 million to the hospital in 2001. The law firm released a statement saying it supports the work done by its attorneys on behalf of Fletcher Allen.

Chairman Philip Drumheller has departed, having served a maximum term that began in 1995. He left, he said, with "mixed emotions."

Louise McCarren, newly elected board chairwoman, and remaining trustees have said they will redefine their responsibilities and how they carry them out. The board report suggests improving communication between trustees and management.

Six new trustees were appointed in December.

Anne Donahue won a seat in the Legislature in November. She has begun drafting a bill that would overhaul how Vermont hospitals are regulated and make their operations more public.

Policy analyst Jeanne Keller was named to the hospital's CEO search committee.

Of the Public Oversight Commission members who recommended the project's approval, only a few still serve. David Yacovone, who took over as commission chairman this year, has said he has trouble believing Fletcher Allen executives who have come before him in recent months presenting new projects and the hospital's annual budget.

Commissioners held a soul-searching session in November. They asked a panel of Vermont health care experts, including Keller, whether nine volunteers reimbursed only with lunch and mileage could have any influence on the regulatory process.

"I think it's fair to say we're here because of Fletcher Allen," Yacovone said.

Department Commissioner Elizabeth Costle is retiring after more than 10 years. Gov.-elect Jim Douglas has appointed John Crowley, a state senator from Rutland, as Costle's successor.

Costle sees a need for changes. The public should have more voice. State law should include civil and criminal penalties for "lying and misrepresentation," she wrote in a recent opinion published in The Burlington Free Press. In Fletcher Allen's case, she said this month, the state's certificate-of-need law has "clearly been broken."

Contact Cadence Mertz at 660-1847 or cmertz@bfp.burlingtonfreepress.com.