Diocese Fights to Quash Subpoena for St. Joseph Pension Fund, Wistow Fires Back
Wednesday, November 22, 2017
The legal fight is on. The special investigator in the St. Joseph pension fund collapse Max Wistow has issued a subpoena requesting literally thousands of pages of documents from the Diocese of Providence and Bishop Thomas Tobin, The Diocese's lawyers are balking. While approximately 2,800 pensioners are threatened with massive cuts to their payments, the Diocese of Providence is working to delay and block the release of critical documents now being requested by the receiver.
On Tuesday, Wistow filed a 16-page motion with nearly 100 pages of supporting documents to Superior Court Judge Brian Stern asking the court to order the “Roman Catholic Bishop of Providence to be compelled” to respond to the subpoena.
Wistow argues in his motion that Tobin told the Diocese’s newspaper, The RI Catholic, that that he was praying for the “very dedicated and faithful employees” of St. Joseph and that “The important thing now is to try to figure out what happened and also to see if anything can be done to rescue the pension fund, even to some degree.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe receiver for the pension fund, Stephen Del Sesto told GoLocal in a phone interview Tuesday night, “The subpoena (to the Diocese) was issued as we need to understand what happened. The Diocese has numerous documents that are critical.”
“‘No’ is not a good answer. We are trying to investigate what happened and those document could be critical. The pension holders deserve transparency,” added Del Sesto.
Diocese Claims Are Inconsistent
Recently, in a sharply worded letter from Tobin’s lawyer Eugene Bernardo, II to Chris Callaci, general counsel to the United Nurses and Allied Professional (UNAP), the Diocese claimed they had no responsibility for the pension fund. The Bernardo letter chided UNAP for comments that the union had made about the case to GoLocal and other news outlets.
Wistow points out that in the letter the Diocese denies that it “took the money from SJHSRI pension fund, used to for other purposes, and left it insolvent.”
While the Diocese has known the pension fund was in receivership since mid-August — more than three months ago — the Diocese has failed to produce any documents pursuant to the subpoena.
The Diocese underfunded the pension fund for years. As a GoLocal investigation found, “The St. Joseph pension fund was in a dire financial situation going back as early as 2007, according to actuarial documents secured by GoLocal.
Moreover, each of the three organizations that controlled the hospital over the decade ignored directives from the actuarial as to the amount needed for contributions to properly fund the pension fund.
In 2014, during the sale of St. Joseph to CharterCARE, the actuarial identified that the contribution needed to "reach 100% funding level projected to the end of the plan year” was $29,573,536, but CharterCARE's contribution was just $14 million.
“But, clearly a hospital like St. Joseph that was dealing with financial distress - you clearly know that if not funded properly, the retirees would be impacted adversely,” said Stephen Del Sesto, the receiver for the pension fund.
In the records secured by GoLocal, the Diocese was shown to have failed to make payments in 2007 to 2009, then Roger Williams Medical Center made a payment of $1.5 million in 2010, but failed to make another payment.
CharterCARE made the one payment in 2014 and then the fund was orphaned and in August of 2017 filed for receivership.
The first sale of St. Joseph to Roger Williams Medical Center began with negotiations in 2007 and was finalized in2010, Tobin was the chair of the board of St. Joseph or served on the board during this period.
Tobin and Kilmartin Both Trying to Block Investigation
As GoLocal reported on Monday that court documents show that Rhode Island Attorney General Peter Kilmartin is trying to limit the scope of a subpoena to his office regarding the St. Joseph pension fund collapse.
Wistow's subpoena requests all documents tied to Kilmartin's office's approval of the merger of CharterCare and Prospect of California. Just three years after Kilmartin signed off on the merger, the pension fund of St. Joseph employees was bust.
The law is very specific to the responsibilities of Kilmartin and his office, stating, “The department of attorney general [is] to preserve and protect public and charitable assets in reviewing both hospital conversions which involve for-profit corporations and hospital conversions which include only not-for-profit corporations.”
In a motion filed in Superior Court last Thursday, Kilmartin claimed the subpoena requested too many documents and that many of the documents requested were “privileged.” Tobin's lawyers are also claiming that some of the documents requested by Wistow's subpoena are "privileged."
Specifically, in the Attorney General’s motion, he claims that “documents such as attorney notes, communication between staff and drafts,” are privileged. Included, he claims are communications with experts used in the review are also privileged other than final reports.
Wistow is disputing Kilmartin's claims. “Undoubtedly the Attorney General knew the subpoena was coming for months, based on his own statement to the press beginning in August, defining his handling of the pension liabilities and his statement that was carefully ‘monitoring’ this receivership,” wrote Wistow.
Related Slideshow: 10 Things to Know About One of Biggest Pension Failures in RI - St. Joseph Receivership
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