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Foundation can't escape blame for Eye Institute disaster

The rise and fall of the Eye Institute at the University of South Florida is a lesson in abject politics: If you've got enough money and political clout, you can just about get away with murder. And if you fail, not to worry. Just use your clout to force the public to bail you out. Members of the Foundation for Eye Research, those well-heeled business folks responsible for the white elephant now sitting on USF property, would love for you and me to believe that they're not culpable for the Eye Institute disaster. Indeed, earlier this year, when former House Speaker and Regent T. Terrell Sessums was trying to convince the St. Petersburg Times editorial board that the public should ante up $7-million to help bail out the institute, he gave a history of the institute's financial problems. His 30-minute speech can be summed up in one sentence: It's all USF's fault.

Foundation members are still singing that tune.

No doubt the institute's power hitters _ including Hugh and Joy Culverhouse, former drugstore magnate Jack Eckerd and wife Ruth, shipping tycoon George Steinbrenner and wife Joan, former GTE President George Gage and Sessums _ had good intentions. But those intentions were dwarfed by giant-size egos. Those egos prevailed over sound judgment and good business sense.

A few facts left out of Sessum's history:

Dr. William Layden, the man who gave birth to the dream of a world-renown eye institute, used false data to support his proposal.

American Medical International, asked by the foundation to participate in the project, refused. Company officials said Layden's patient and reimbursement projections were wrong and that the project was too risky. (This, folks, is called a red flag.)

From the beginning, university officials predicted that the institute would fail. But when they talked of hiring their own independent consultants to review the plans, Sessums, then Board of Regents chairman, threatened to sue in a letter shot off on the board's letterhead.

University System Chancellor Charles Reed, who was no match for the politically powerful institute backers, was so convinced of the project's folly, he insisted that the written agreement between foundation members and Board of Regents include a clause stating the institute would not receive any state money. (A gigantic red flag.)

When the institute began to fail less than two months after it opened, Reed said, "The reality is, even if the institute were debt free . . . it still couldn't operate without a subsidy."

Despite what Reed later told legislators as he, Sessums and other foundation members engineered the public bailout, he was right. Even with its debt erased, the institute couldn't float.

Henry Reinhard, the institute's former president, claims it could have remained open at least through the end of this fiscal year if USF had just been willing to give it $216,000.

USF officials calculated that the subsidy needed this year was closer to $500,000. And beginning next year, they figured it would jump to between $750,000 to $1-million annually. They said no thanks.

Considering that the Legislature just spent $7-million to help pay off the institute's debt, and considering that the state is in one of the worst budget crunches in history, forcing USF to slash its budget by over $4-million, can anyone blame them?

Even so, foundation members are claiming, as they have all along, that the eye institute's closing is all USF's fault. Hogwash.

The latest financial and political muscleman to come out singing the blues is Eckerd. He's saying that he was duped into releasing a $250,000 gift for a research lab at the institute a week before the institute closed. Guess who talked him into that? Foundation members Gage and Max Hollingsworth. Yet Eckerd has directed his rage at USF. He also claims he had no idea the institute was on the verge of collapse.

Eckerd wasn't duped. He simply failed to do his homework. That was a consistent problem among foundation members during this venture.

So the public finally had to pay.

You can bet that foundation members would have gladly taken the credit had the institute succeeded. It's all their doing if it flies. But if it crashes, for gosh sakes, don't blame them.

Charrie Hazard is an editorial writer in the Tampa bureau of the St. Petersburg Times.

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