Fraters Libertas

Attorneys General As Head Hunters?

Interesting piece in yesterday's NY Times on the trend for state attorney generals to step in and appoint board members and administrators for charity and non-profit groups that have run into difficulties. And who should be on the leading edge of this movement but Minnesota's own Mike Hatch:

No other attorney general has drawn more attention for such appointments than Mike Hatch of Minnesota, who has conducted two high-profile investigations of nonprofit health care organizations accused of profligate spending and lax board oversight.

Not everyone is happy about this practice.

"It's like state-mandated supervision, and fraught with potential conflicts of interest," said Michael W. Peregrine, a lawyer who frequently advises nonprofit institutions.

"This is a role that belongs to the courts," said Marion Fremont-Smith, a former assistant attorney general for charity oversight in Massachusetts who is now a senior research fellow at the Hauser Center for Nonprofit Organizations at Harvard University. "The attorney general has the clout to force people to let him do it, but he has no legal right to do it."

Even some attorneys general agree. "We really don't have the authority to say to a board, you must hire or appoint someone," said Greg Abbott, the Texas attorney general, who recently succeeded in having the directors of a Dallas foundation removed the old-fashioned way, by filing a lawsuit. "That's a decision that belongs to the courts."

Conflict of interest you say?

Four of the appointees had been contributors to Mr. Hatch's campaigns. Theodore Deikel, a multimillionaire businessman whom Mr. Hatch named as chairman of the Medica board, had been host of a fund-raising event for Mr. Hatch two weeks before his appointment. Mr. Deikel and his wife, Beverly, had also contributed $500 each to Mr. Hatch's political campaigns, and three of his four children contributed $1,000 apiece, the maximum allowed under Minnesota law.

But at least Hatch is clear and straight forward on the matter.

Asked whether those contributions and the contributions of other Medica appointees posed a conflict of interest, Mr. Hatch said, "It could, but I don't think it does."

You don't THINK it does? Well that's reassuring Mike.

Hatch has overstepped the bounds of his powers as attorney general time and again. Currently he’s trying to strong arm HealthPartners, another Minnesota non-profit health care firm, to force them to allow him to appoint two new members to their board. HealthPartners is not caving in to Hatch’s demands and is taking him to court to block his efforts. Let’s hope that the court slaps Hatch down and restores some boundaries to the office of attorney general.