Attorney Doug Ibendahl, former Chief Counsel for the Illinois Republican Party, dug deeper into the answer Rauner gave to Bruce Dold at the WGN/Chicago Tribune TV debate. We wrote about this forum yesterday
Here are highlights from Ibendahl’s detailed point-by-point matching of the Rauner rhetoric versus the factual reality.
RAUNER: “The company was an investment that my company had made in a nursing home company . . .”
FACTS: Rauner’s firm, GTCR, didn’t simply “invest” in a nursing home company. GTCR spearheaded a foray into the nursing home industry with the specific mission of making a lot of money for investors. GTCR didn’t just go out and find an existing company in which to invest. GTCR founded a new company that would be the vehicle for buying-up nursing homes around the country. That vehicle was Trans Healthcare Inc. (“THI”) and for a significant period of time GTCR owned 82.7% of THI.
And incredibly, as Kirk Dillard correctly noted in the debate, GTCR signed-off on a Board of Directors for THI which was composed solely of investors and bankers. A company with the objective of becoming the nation’s largest nursing home owner/operator did not have a single health care official on its Board.
By GTCR’s own admission, THI was launched in 1998 “because a new prospective payment system for Medicare was just being implemented” and “[GTCR] thought it would create a lot of distress, and there would be a decline in multiples for assets and a decline in buyers for those assets.”
THI did in fact soon become one of, if not the largest private owner of nursing homes in America with approximately 220 facilities around the country. At one point the company reportedly had over one billion dollars in revenue.
RAUNER: “The simple fact is the deaths that occurred in the nursing homes did not occur while the company we invested in was involved with those nursing homes.”
FACTS: THI Holdings, LLC d/b/a Trans Healthcare, a GTCR portfolio company, filed a motion to dismiss with the U.S. Bankruptcy Court. In denying GTCR’s motion to dismiss, the court held in pertinent part:
At the March 21, 2013 hearing on THI Holdings’ motion to dismiss the Trustee’s initial complaint, THI Holdings’ counsel argued – as it does in its motion to dismiss the Trustee’s amended complaint – that there is no coverage under the indemnification agreement if the only connection to the nursing homes at issue is that they were managed by THMI . . .Here, the Trustee has alleged that THI did have a connection to the nursing homes at issue other than the fact that they may have been managed by THMI. The Trustee specifically alleges that THI operated – not managed – the nursing homes using THMI’s assets. [Emphasis added.]
In addition, the U.S. Court of Appeals for the Eleventh Circuit also obviously disagrees that THI and its subsidiary Trans Health Management, Inc. (“THMI”) were not “involved in those nursing homes.” Here’s how the U.S. Court of Appeals described the nursing home relationship of THI and THMI in its August 2013 decision:
The complex factual and procedural history surrounding this case began in 2003, when Juanita Amelia Jackson (”Jackson”) lived at the Auburndale Oaks Healthcare Center, a nursing home in Polk County, Florida, operated by Trans Healthcare, Inc. and Trans Health Management, Inc. Soon after, Jackson was released from the nursing home, and later died on July 6, 2003. About a year later, the Estate of Juanita Amelia Jackson (”Estate”), through Cathy Jackson-Platts, sued thirteen defendants, including Trans Healthcare and Trans Management, alleging that their negligence caused Jackson’s death. [Emphasis added.]
Arlene Townsend was also a resident at the Auburndale Oaks Healthcare Center. Ms. Township resided at the Auburndale nursing home from 2004 until her death there in 2007 at the age of 69.
GTCR’s nursing home point-man and Rauner’s fellow GTCR Principal, Edgar D. Jannotta, was deposed in at least one of the nursing home wrongful death cases.
The Polk County Circuit Court in Florida would also disagree with Rauner’s claim that his company was “not involved with those nursing homes.” As evidenced by the extensive court docket in two of the wrongful death cases (in Jackson here and in Townsend here) Rauner’s GTCR and GTCR-linked THI and THMI have remained active parties in the litigation for years.
The truth is that parties which are “not involved” do not remain in lawsuits for many years (in Jackson, for more than 10 years). If Rauner’s companies were truly “not involved” at the time of the nursing home deaths – motions to dismiss would have been filed and granted years ago.
According to a 2002 filing with the Security and Exchange Commission by one of GTCR’s co-investors, THI was specifically cited as the “property manager” of nursing home facilities. And in 2004 and 2005, Rauner’s GTCR was appointing the Chief Executive Officer, Chief Financial Officer and General Counsel for THI. In fact GTCR crowed about it: see here and here.
The record clearly demonstrates that not only were GTCR’s THI and THMI involved with the nursing homes during the time of residency and death of victims, but in fact Rauner’s GTCR was directly linked to the management and/or operation of those facilities
Check out the whole Republican News Watch piece by Ibendahl here: http://republicannewswatch.com/wp/?p=13394
And stay tuned for an exclusive breaking story we have planned for tomorrow. Right here.