Napoleon (Ricardo Thomas / The Detroit News)
Detroit— Rhetorical punches thrown during the Tuesday mayoral debate between former Detroit Medical Center CEO Mike Duggan and Wayne County Sheriff Benny Napoleon continued Wednesday as the campaigns head toward the Tuesday election.
Some claims could be documented, but others were tenuous.
Napoleon did not back down from claims Wednesday that Duggan had no-bid contracts and ghost employees while in the Wayne County Prosecutor’s Office, found in a report former Wayne County Auditor General Brendan Dunleavy produced after Kym Worthy succeeded Duggan as prosecutor. The auditor general’s findings have been reported before.
Napoleon also said the DMC was not profitable under Duggan’s watch, and there were layoffs.
“What I stated last night in the debate is backed up by facts. Some in this community have rewritten the background of my opponent,” Napoleon told a Detroit News web chat Wednesday.
Napoleon made his claims during his closing statement in Tuesday night’s debate. They were reiterated in a radio spot that began running Wednesday morning and in a campaign email blast.
Duggan, after Tuesday’s debate, said Napoleon was saying things that he knew weren’t true and went so far as to say Napoleon would regret making those allegations in a couple of weeks.
U.S. Attorney Barbara McQuade shot down one claim — that there were kickbacks, bribes and fraud involved with a $30 million settlement with the U.S. Department of Justice in January 2011 over alleged improper financial relationships with referring doctors. In late December 2010, the DMC was sold to Vanguard Health Systems.
“We are not aware of any criminal intent,” McQuade has said in the past, according to the U.S. Attorney’s Office. She has said she doesn’t believe the DMC tried to unlawfully steer business its way through kickbacks.
“These were technical violations,” McQuade said. “They came forward to get a clean bill of health so that they could get this deal done.”
The nonprofit health system — which lost more than $500 million in the six years before Duggan took over — reportedly generated eight straight years of profits before Duggan left at the end of December to run for mayor. But Napoleon’s campaign said in an email the DMC’s net income had deficits in 2006, 2007 and 2008.
In a three-year window for which figures were available, the health system had net income of $33.8 million in 2007 and $42.8 million in 2009 — well in the black. It reported a loss of $171,000 in net income during the recession year of 2008.
Health companies often absorb non-cash charges that lower net income but don’t reflect the financial health of the firms, said Sheryl Skolnick, managing director of the CRT Capital Group, which follows the DMC and the health industry.
Nonprofit health institutions often measure profitability by operating revenue, and the DMC’s operating income was in the black during all of those same years — $37.2 million in 2007, $44.7 million in 2008 and $4.1 million in 2009, according to company filings.
“If you did not have a financially strong organization, Vanguard would not have bought the company, assumed the $300 million pension obligation and put $850 million into the DMC on top of it,” Duggan said Wednesday.