Former Norris Cotton Cancer Center Director Sues Dartmouth-Hitchcock Over Prouty Funds

  • Mark Israel MD

Valley News Staff Writer
Thursday, October 27, 2016

Lebanon — The former director of Dartmouth-Hitchcock’s Norris Cotton Cancer Center has filed a lawsuit alleging he was forced out of that job after he objected when D-H officials, including Chief Executive James Weinstein, diverted $6 million raised for cancer research and other services to operating expenses instead.

The lawsuit by Mark Israel says he was ousted in an act of illegal retaliation after he objected to that use of the donated money, which included $1.6 million raised from Norris Cotton’s signature fundraising event, The Prouty.

Using that money to pay regular operating expenses was “inconsistent with donor intent and therefore in violation of D-H’s, Dr. Weinstein’s and all of D-H senior management’s fiduciary duties,” the lawsuit alleges.

“People don’t ride in The Prouty to subsidize the hospital,” Israel, whose lawsuit was filed on Thursday in Grafton Superior Court in North Haverhill, said in an interview.

Rick Adams, a D-H spokesman, said in an email that “contrary to (Israel’s) allegations, Dartmouth-Hitchcock took action to ensure proper administration, oversight, and compliance with required accounting standards and state law governing all charitable donations.”

Dartmouth-Hitchcock also denies any allegation of wrongful termination,” Adams said in his email. The health system “has valued Dr. Israel’s leadership of the Cancer Center and did not seek his removal as director.”

Israel, 70, became the center’s director in 2001 and exited the job at the end of September. For 12 years, Israel headed a laboratory at the University of California, San Francisco and prior to that he worked as a scientist at the National Institutes of Health. He remains on the faculty at Dartmouth’s Geisel School of Medicine.

Neither D-H nor Dartmouth College formally announced Israel’s departure from the top job at Norris Cotton or characterized the terms or circumstances surrounding it.

Instead, on June 29, Geisel Dean Duane Compton sent out an email to faculty and staff saying Chris Amos, another Geisel professor and a Norris Cotton associate director, would serve as interim director of the center. Compton said an executive recruiter had been hired to conduct a nationwide search for a new, permanent director for Norris Cotton.

Compton’s email thanked Israel for his “strong leadership ... for the last 14 years” and “steadfast efforts to build a strong and robust clinical and cancer research enterprise across Geisel and Dartmouth-Hitchcock.”

In an interview that day, Dartmouth spokesman Justin Anderson said Israel had approached the dean’s office earlier this year “to discuss (a) transition from the role of director.” Anderson said at the time he could not “speak to (Israel’s) motivation.”

Israel’s lawsuit provides a different and more detailed account of events prior to his departure. It alleges that on Sept. 9, 2015, D-H’s senior managers informed Israel “in a terse one sentence e-mail that his authority and responsibilities for the clinical care of cancer patients would be stripped away from him and reassigned to a new hire.”

That was less than a month after a meeting, on Aug. 15, where Weinstein and D-H’s general counsel told Israel that money in philanthropic accounts that included donations from The Prouty “had to be spent on operations in order to comply with unnamed legal requirements,” the lawsuit alleges.

The decision to take away his authority over clinical care at Norris Cotton was “retaliation against Dr. Israel for his whistleblowing,” and effectively forced him to resign as director, the lawsuit alleges.

That clinical work was a major portion of his job, and he felt undercut by the launch of a nationwide search to find someone to do it in his place, Israel said in an interview: “I was a lame duck.”

The lawsuit seeks to have D-H restore $6 million to the philanthropic accounts and pay Israel at least $2 million in lost pay and compensatory damages.

About $1.6 million of the money in the philanthropic accounts that was tapped for operating expenses had been raised through The Prouty, said Geoffrey Vitt, Israel’s Norwich-based lawyer.

The profile of the lawsuit seems likely to be elevated by the inclusion of allegations regarding The Prouty, which has come to embody public support for D-H — and its cancer center and their ties to the community.

The Prouty, which has grown into a two-day athletic fundraiser, drew 4,300 participants and 1,200 volunteers and raised $3.1 million in July for the Lebanon-based Norris Cotton Cancer Center.

The Prouty was started in 1982 by four nurses to raise money and awareness about cancer. It was named for Audrey Prouty, a patient of theirs who died that year following a nine-year battle with ovarian cancer.

“I believe that what I’m doing is protecting The Prouty, not damaging it,” Israel said in an interview.

Under Israel’s leadership, the amount raised by the annual Prouty jumped 16-fold to over $3 million “without any help from D-H,” according to the lawsuit. “Rather, The Prouty is organized by Dartmouth College employees and depends on the work of more than 1,200 volunteers,” the lawsuit says.

Israel said fundraising had been an important part of his job as director of the cancer center, and noted the growth of The Prouty under his leadership. Over its first 15 years, The Prouty raised a total of about $1.3 million, while during his tenure it brought in more than $25 million, he said.

Israel said he felt the use of Prouty money by Dartmouth-Hitchcock officials to close an operating deficit had gone against the expectations of The Prouty’s supporters. Prouty participants “want to support things that insurance companies and the government don’t pay for,” including research and unconventional forms of care such as massage, music and a writer in residence, he said.

Jean Brown, the director of the Friends of the Norris Cotton Cancer Center, which organizes The Prouty, referred a request for comment to Anderson, the college spokeman, who declined to comment.

The lawsuit alleges that the cancer center’s “financial success has been a key contributor to D-H’s bottom line.” The cancer center’s operating revenue exceeded expenses by about $70 million in the fiscal year that ended June 30, 2015, well ahead of the margins in other “non-surgical clinical units” at D-H including $51 million from “medical specialties” and $13 million from neurology, the lawsuit says.

The transfer of donated funds alleged in the lawsuit occurred in the wake of a difficult financial year at D-H. A letter from Weinstein to trustees and colleagues dated Sept. 10, 2015, the day after the meeting with Israel described in the lawsuit, referred to the $3 million operating margin in the fiscal year that ended the preceding June 30 as “a reality we cannot, and should not, repeat.”

In the fiscal year that ended nearly four months ago, D-H posted an unaudited $12 million operating loss.

Both sides expressed their willingness to air their arguments publicly.

“Dartmouth-Hitchcock is disappointed by these allegations and looks forward to bringing the facts to light in a legal forum,” Adams, the Dartmouth-Hitchcock spokeman, said.

Don Schroeder, a Boston employment lawyer who is representing D-H, noted that Israel “had been threatening to file a lawsuit for the past seven months.”

“We are not going to litigate this in the media,” but will “pursue any and all defenses and claims in response,” he added.

“I think it’s something a jury (should) hear,” said Vitt, Israel’s lawyer.

Rick Jurgens can be reached at rjurgens@vnews.com or 603-727-3229.