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The Massachusetts Attorney General’s office has concluded that while the actions of Beth Israel Deaconess Medical Center CEO Paul Levy endangered the hospital’s reputation, the hospital board of directors didn’t violate their fiduciary responsibilities in their decision to retain him.
The hospital board in May had asked the attorney general’s Non-Profit Organizations/Public Charities Division to review the board’s actions following disclosure that Levy had admitted to an inappropriate personal relationship with an employee in April. The hospital board then chose to retain Levy as CEO while imposing a $50,000 sanction and a public reprimand.
The attorney general’s office today sent an 11-page letter to Stephen Kay, chairman of the BIDMC board, summarizing its review. In a press release, the attorney general’s office said, “Although the review found no evidence of the misuse of charitable funds, it noted that because of the CEO’s actions, the performance reviews and compensation determinations for the employee will always be subject to the perception that they were influenced by the personal relationship with Levy. The office also found that the personal relationship between the CEO and the employee, which continued throughout her tenure despite repeated expressions of concern by senior staff and certain board members, clearly endangered the reputation of the institution and its management.”
While the report didn’t fault the BIDMC board for its actions, it did question the timing of its actions, noting that some board members and senior managers had been aware of Levy’s relationship with the employee as early as 2003 or 2004.
Levy remains CEO and president of BIDMC.
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