FORT LAUDERDALE — Gov. Rick Scott's use of political power went on trial Friday in a widening controversy over Broward County hospitals, a criminal investigation, a suicide and broad but unproven charges of corruption.
Scott is being sued by an ally-turned-enemy, David Di Pietro, twice the governor's appointee to the board of the North Broward Hospital District, where a $2 billion medical empire that operates under the business name Broward Health is run by seven volunteers with statewide political connections.
For the past three decades, under both Republican and Democratic governors, the district has repeatedly been the focus of criticism and investigations for insider dealings and for doling out lucrative medical contracts based on politics.
The latest controversy erupted last month. On the advice of Chief Inspector General Melinda Miguel, Scott suspended board chairman Di Pietro and board member Darryl Wright on March 18, citing "acts of malfeasance" without accusing either appointee of specific wrongdoing.
"There are suspicions about pressure being applied by certain board members on staff of Broward Health to steer contracts to various entities," Miguel told Scott in a letter that triggered the two suspensions. "However, we've not yet confirmed the facts associated with these allegations."
Di Pietro, 36, a lawyer and Republican fund-raiser, challenged Scott's actions.
"He's wrong and he knows it," Di Pietro said in an interview with the Times/Herald. "I'm fighting for my reputation. I've been damaged."
In a Fort Lauderdale courtroom Friday, Di Pietro's lawyers said Scott acted illegally while lawyers for Scott defended his actions.
"The governor has a constitutional right to suspend public officers," Assistant Attorney General Blaine Winship told Circuit Judge Carol-Lisa Phillips. "This is a preliminary finding. This is an ongoing investigation."
The judge pressed Scott's lawyer for specifics about how Di Pietro's behavior warranted his removal. "The board, the board, the board," she said. "But I don't see anything about Mr. Di Pietro."
Di Pietro sued Scott even though the governor twice appointed his wife to influential positions, first to the state Board of Medicine and last year to a county court judgeship.
Di Pietro did support expanding a highly lucrative no-bid marketing deal between the hospital district and Zimmerman Advertising after the firm hosted a fund-raiser for his wife's judicial campaign. But Scott did not cite that as grounds for the suspension.
Controversy at the North Broward Hospital District is not new, but it was rocked on Jan. 23 when its chief executive officer, Dr. Nabil El Sanadi, committed suicide.
Miguel then launched what she called a "review" of district operations and demanded a massive amount of district documents, including thousands of contracts, in a search for "waste, fraud and abuse" in the system.
She urged Scott to suspended Di Pietro and Wright "to neutralize their ability or even their perceived ability to interfere" with district operations.
In response, four of seven hospital board members voted to hire an outside law firm, Berger Singerman, which Scott and Miguel saw as interference with the inspector general's review.
The law firm's name partner, Mitchell Berger, who attended Friday's court hearing, is a fixture in national Democratic circles. He's a former national Democratic Party finance chairman, a friend of Bill and Hillary Clinton and was a college classmate of former Vice President Al Gore.
Di Pietro said he suggested the firm because it was independent from Republican forces who are loyal to Scott.
In court Friday, Winship said that act violated the "non-interference" provision in the hospital district's charter.
"A classic interference," Winship told the judge.
The hospital district is in such financial distress that it may not meet its June 30 deadline to its bondholders. It is the subject of an FBI investigation of its purchasing practices.
It's highly unusual for a governor's inspector general to investigate a local taxing district, and Scott's decision to suspend Di Pietro and Wright is believed to be the only time he has removed his own appointees who have not been charged with a crime.
"I followed the recommendation by our inspector general, who said that to protect the integrity of the investigation, that these two individuals should be suspended," Scott told reporters in Tampa on Monday.
Scott is no stranger to North Broward's hospital network. But his decision to inject himself into a local hospital district's day-to-day operations raises questions because of his longstanding opposition to tax-supported hospitals.
A third Scott appointee to the hospital board, Maureen Canada of Lighthouse Point, said she sees signs of a broader strategy to "destabilize" the district to make it more attractive to a private takeover.
"It does feel that there has been an orchestrated effort to destabilize the system," Canada said. "I feel as if our system has been treated unfairly. I'm shocked. I still don't understand why they were suspended."
As Scott expanded the Columbia/HCA chain into the nation's largest for-profit health care empire two decades ago, he acquired several Broward hospitals. His partner in those ventures, David Vandewater, is now the CEO of Advent Health Services, which has surfaced in speculation about a possible suitor to the Broward hospitals.
"We do not comment on rumor or speculation regarding hospital partnerships or other plans which the company may or may not be considering," Advent spokeswoman Rebecca Kirkham said.
Soon after Scott became governor in 2011, he formed a task force to study whether tax-supported hospitals should be abolished. The hospitals pushed back and the group accomplished little.
Linda Quick, who retired last year after 21 years at the South Florida Hospital and Healthcare Association, also questioned Scott's motives in light of his longstanding opposition to tax-supported hospitals.
"He can't help but have a teensy bit of a conflict of interest," Quick said. "If he had his druthers, they wouldn't exist altogether."
Quick said the district has long operated as a fiefdom, controlled by political patronage appointees, where clout mattered more than health care expertise.
"The whole system is antiquated, and unfortunately politicized," Quick said.
More than a decade ago, after another wave of questionable dealings involving medical contracts and real estate deals, Gov. Jeb Bush brought in Alan Levine, a former hospital administrator who had run the state Medicaid program, to rescue the district.
Levine, who had run Florida's Medicaid program, said he crafted changes to the district charter in 2007 to prohibit interference by individual board members that's at the crux of Scott's defense to the current lawsuit.
"There is always a deal," Levine recalled Friday. "No governor has been able to tackle this issue."
Di Pietro, the patronage appointee at the center of the current controversy, agreed.
"The governor's friends help you get appointed," Di Pietro said, "and instead of answering to the general electorate, you're answering to a smaller group of insiders. It's not pure. It's a political process."
Times staff writer Alli Knothe contributed to this report. Contact Steve Bousquet at [email protected] or (850) 224-7263. Follow @stevebousquet.