Political Links to Hurricane Katrina’s Memorial Medical Center – by PEU Report-State of the Division

Weeks before Hurricane Katrina struck the Gulf Coast, two private equity firms inked a deal for LifeCare Hospitals. GTCR Golder Rauner sold their majority stake to The Carlyle Group. The sale closed before the Category 3 storm sideswiped New Orleans. Thirty four patients perished in Memorial Medical Center in the sweltering toxic aftermath. Twenty four were LifeCare Hospital’s responsibility and ten were Tenet Healthcare’s. LifeCare rented a floor in Memorial.

Tenet is a large for-profit hospital company, while LifeCare’s niche is long term acute care. Influential politicians are associated with the firm’s past and future.

GTCR Golder Rauner

Between his service in the Clinton White House and his Congressional position, Rahm Emanuel worked for an investment banker. GTCR Golder Rauner’s chairman advised Mr. Emanuel on his career. GTCR was Rahm’s account.

Tenet Healthcare

Ex-Nebraska Governor and Senator Bob Kerrey sat on the Board of Directors since 2001. Tenet is a serial ethics abuser. Their SEC filings show numerous settlements with states and the federal government on billing and financial practices. The company never admits any wrongdoing.

Ex-Florida Governor Jeb Bush joined the Board in April 2007. This is roughly a year after the White House omitted any mention of Tenet, LifeCare or Memorial Hospital from their Hurricane Katrina Lessons Learned report. Several Tenet financial settlements occurred in the State of Florida under Governor Bush’s term in office.

LifeCare Hospitals

Company executives were found guilty of illegal campaign contributions in three election cycles, 1998, 2000, and 2002. Fines totalled $200,000. The company paid $50,000 of this amount. Donald Boucher and David LeBlanc were fined individually for their improper acts. Most donations were to Republican candidates, but a number of Democrats received funds.

The Carlyle Group

This private equity underwriter (PEU) is legendary for its political hires and access to America’s hallowed halls of government. Carlyle shows as a top 10 donor for Rep. Rahm Emanuel and Senator Evan Bayh. A small sampling of their Blue credentials shows numerous Clinton White House connections. President Clinton privatized USIS, which Carlyle flipped for large profits.

With all the above gunpowder, Memorial Medical Center and their 34 patient deaths are but a distant memory. LifeCare deaths warranted not one mention in Congressional hearings on Carlyle’s purchase of ManorCare. If Carlyle could fail one of twenty one LTAC’s in a time of crisis, what might they do with 500 facilities, most nursing homes? The Carlyle Group knows how to keep their good name.

Rest assured, their interest in adding health care companies is strong. They even have an Axelrod exploring new opportunities. How deep does the rabbit hole go?

About Sharon Kramer

Hi, I'm an advocate for integrity in health marketing and in the courts.
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