It has gotten so that one never knows who one can trust any more.  If people use words like “permanently” and “forever,” one naturally would believe that means until the end of time.  But one never knows that will hold in the Boston Archdiocese. 

We leave the discussion of Pastoral Center layoffs and return to the topic of the sale of Caritas Christi because the latest disclosure makes it clear that we do not know who we can trust.   We know we cannot trust the management or spokespeople at Caritas to give us the whole story.  We assumed we could not trust Cerberus because their business is to buy and sell underperforming companies for a profit.  But for a diocese that is priding itself on transparency, it seems that we also cannot trust what Fr. Bryan Hehir, Vicar General Fr. Richard Erikson, or Cardinal O’Malley have said in this matter either. If we cannot trust them to tell us what is really happening with Caritas, then on what other important matters should we also be skeptical?

On April 28, the Boston Globe reported the following, “Christopher Murphy, a spokesman for the network, said the stewardship agreement would be designed to permanently maintain the hospital’s Catholic identity. That is significant because Cerberus may not be the owner for long; the investment firm often buys underperforming companies, turns them around, and then sells them at a profit.

“The main point is that it’s designed to last forever.  That’s the prevailing hope of everyone involved, that . . . the Catholic tradition of Caritas Christi stays in place forever.’’

On Cardinal Sean’s  May 7, 2010 blog, he wrote:

Our conversations between Caritas Christi and Cerberus Capital Management have continued, and it looks very positive. We announced yesterday that an agreement has been reached with Cerberus that ensures the Catholic identity of the Caritas Christi hospitals. The sale is still pending as the Attorney General has to review it, but this stewardship agreement was a key component for us because it will preserve the Catholic identity of Caritas.

The May 14 edition of The Pilot quotes Fr. Richard Erikson saying:

The Stewardship Agreement memorializes Steward’s commitment to maintain the Catholic identity of the Caritas Christi Healthcare system and its fidelity to the mission of the Church’s healthcare ministry.”

The Pilot also quotes Fr. Bryan Hehir as saying,

This is a substantive and structural commitment by the archdiocese and Steward to operate this hospital system by the religious and moral directives of the Catholic Church.”

Diamonds may be forever, but it turns out that Catholic healthcare in Boston is not.  Thursday night the Chair of the Caritas board of directors, James Karam, testified that in fact he cannot guarantee the continuing Catholic identity of Caritas after it is sold to the Steward Health Care System, a subsidiary of Cerberus Capital Management. According to the Catholic Action League of Massachusetts:

Addressing a packed audience in Dorchester Thursday night at a public hearing held by the Massachusetts Department of Public Health and Attorney General Martha Coakley’s Office on the future of Carney Hospital, Karam said he told Cardinal O’Malley that he could not guarantee the future Catholic identity of Caritas, but could guarantee that the hospitals will be closed without the sale.

Karam’s statement contradicted repeated assurances by both Caritas Christi and the Archdiocese of Boston (including some given at the same hearing) that the system’s Catholic identity and mission, and its Catholic medical ethics, would be preserved under the new owners. The Catholic Action League has repeatedly cited the termination clause of the Notice of Transaction — which allows Steward to end the Catholic identity of Caritas at any time for virtually any reason provided it pays just 3% above the purchase price — as evidence that the so-called guarantees are meaningless.

Readers should note that the actual exit clause says they can abandon the Catholic identity for a charitable contribution of $25 million–it does not say “3% above the purchase price.”   Since a “purchase price” has never been disclosed–they only discuss a total investment amount that includes spending from Caritas’ future operating profits and cash assets–to say the $25 million represents “3% above the “purchase price” is not necessarily accurate. 

Also as we said in an earlier post, we do not yet know if the Caritas sale was really necessary to avoid closing hospitals, whether the healthcare system could have continued on its own without the sale, or whether this a good deal or not.  However, Caritas turned a profit of $30 million last year, they had their debt rating upgraded, and a $100 million bond issue planned for 2010 would have given them the funds needed to make most of the same capital improvements Cerberus is funding this year.  

We shared these concerns again with Mr. Karam, Dr. de la Torre, Cardinal O’Malley, and the Attorney General’s office over the weekend.  If we get a  response we will share it with you.

But do not hold your breath waiting.  Even if they respond, we are not sure we can believe whatever  they might say in that response.

One Response to Trust

  1. […] in the Caritas deal which we discussed multiple times last year. Last July in our blog post, “Trust” we shared how Cerberus/Steward can abandon the Catholic identity of the hospitals if it is […]

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