Daring Daylght Merger

Things just may, because this Clintonian sub-cover story has put UC regents and administrators in a terrible legal double-bind.

You see, the new nonprofit USHC has already been operating, in anticipation that the regents will give final approval to the merger. And in July, lawyers for the new entity wrote to the state's Fair Political Practices Commission, arguing that USHC officials should not have to disclose their personal financial interests, as government officials do. In making that argument, USHC lawyers insisted that the new merged medical center is -- whoops! -- entirely private. It will not be responsible for giving medical care to the indigent, or for carrying out public health research. It will have "no general public service mission."

So: If the USHC lawyers are telling the truth, the new merged medical center will be entirely a private-sector business -- which is exactly the opposite of what the UC regents had been telling everyone. Giving UCSF's public assets to this private business would constitute an unconstitutional gift. Ergo, the merger is illegal.

But: If the sub-cover story is true, if the new merged medical center has such close ties to UC that it is essentially part of the government, USHC has lied -- on the record, in writing -- in an official submission to the FPPC, a government agency. The USHC board includes UC regents and representatives chosen by the regents. The intentional submission of false government documents can be a crime.

So how did this FPPC letter come to be written? Which UC and Stanford officials knew about the letter? When did they know?

Who wants to testify first?
3) I know I've probably overused the Clinton metaphor, but the sheer number of conflicts of interest surrounding the UCSF-Stanford merger makes me wonder whether God moved San Francisco to Arkansas while none of us was looking. As of their latest financial disclosures:

-- UC Regent John Davies owned stock in a company that already sells laundry supplies to USHC;

-- Regent Peter Preuss was a stockholder in a company that provides radiological imaging supplies and equipment to UCSF;

-- USHC board members Isaac Stein and Denise O'Leary sat on the board of a Palo Alto pharmaceutical company that seems well-positioned to benefit from a merger; and

-- Howard Leach, a UC regent and USHC board member, held financial interests in venture capital and stock partnerships invested in medical and pharmaceutical businesses.

How or if the various conflicted regents vote on the merger will, of course, be of interest to indictment aficionados everywhere. But serious prosecutors will be more interested in how and when all of the public and private movers and shakers who concocted this merger received (at minimum) hundreds of thousands of dollars of stock in all sorts of flashy biomedical companies -- and how much was paid for the stock.

Subpoenas, please. And don't forget the bank records.
4) Throughout the merger process, UC officials have routinely violated open records and open meetings laws. These violations have been repeated, blatant, arrogant. In many cases, UC officials haven't even bothered with cover stories. They've just refused to turn over obviously public records. These types of violations are boring to write and read about. But an enterprising prosecutor could use them to leverage testimony on items 1) through 3).

The proposed merger of the UCSF and Stanford medical centers is radical, illegal therapy for a disease that does not exist. State auditors and other financial experts have confirmed that there is no financial emergency threatening UCSF. Its medical center is not a loss leader; it is a profit center that could provide long-term financial support for a great medical school with a continued commitment to the public interest.

There is a fairly small group of businesspeople (and, sadly, medical researchers) who are connected to the biomedical industry and who want to steal the $380 million UCSF Medical Center from the rest of us. They want to take the UCSF Medical Center into the private sector, so they can direct its resources to profit themselves and their friends. (That profit potential is huge; he who controls the hospital beds of the Medical Center controls which medicines undergo the clinical testing that leads to government approval. And a single, FDA-approved biomedical discovery can be worth hundreds of millions of dollars.)

Clearly, this group of businesspeople and researchers has influence over the sad pack of political hacks known as the University of California Board of Regents. The regents have allowed the planning for this daring daylight theft to continue for months now. The theft will probably be consummated Friday.

If it is, smart regents (and friends of same) will begin consulting their defense attorneys and revving up their shredders on Saturday. Very early on Saturday.

John Mecklin (jmecklin@sfweekly.com) can be reached at SF Weekly, 185 Berry, Lobby 4, Suite 3800, San Francisco,

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