City Council voted to approve UPMC’s $400 million plan to expand Mercy Hospital this week -- but one activist plans to continue the fight against Daniel Lavelle, the city councilor who brokered a deal with the health care giant.
"I will do everything I can do to file a complaint against him -- whether with the state, with the city, whichever body can accept and process it for an obvious conflict of interest,” activist Mel Packer said on Wednesday.
At issue is the fact that Lavelle’s wife, Rachel Riley-Lavelle, sits on the board of UPMC Mercy. UPMC sought the city’s approval for a master plan that envisions expanding the Uptown hospital to include cutting-edge treatment for vision problems. But activists have long demanded the region's largest employer pay more to employees and the city’s coffers, among other grievances. And they say UPMC should have pledged to provide more in benefits to workers and the community.
One day before council’s vote Tuesday, Lavelle unveiled an agreement in which UPMC said that as part of the project, it would provide benefits that include local job opportunities and addiction treatment. But Packer and others said that deal fell far short of what should be required.
"He was the man who negotiated a secret agreement and then brought it before council,” said Packer. “There's an obvious conflict of interest, he should have recused himself from the very beginning. He should have nothing to do with this deal. The whole thing should be overturned based on that alone."
Pennsylvania's ethics law bars “use by a public official or public employee of the authority of his office … for the private [financial] benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated.”
Lavelle did not respond to requests for comment Wednesday evening, but he addressed the matter after Packer challenged him on his wife's connections during the Tuesday meeting.
"My wife's position was mentioned, so I would just like to provide clarity for the record," he said. "She is a member of the Mercy hospital board, which is distinct and different from the UPMC board. It's a community-appointed position to that board. It is a non-paid position, and she has to sign a yearly conflict-of-interest policy. So, for me there actually is no conflict there. "
UPMC is a sprawling non-profit. Its Form 990 -- which documents financial and other information for the IRS -- covers some 47 tax-exempt entities, including Mercy and a dozen other hospitals. The 2016 form lists Rachel Riley-Lavelle's name among 64 pages' worth of names of directors, officers, and top-paid employees. It confirms that she received no compensation for her board service.
But Robert Caruso, the executive director of the state Ethics Commission, said conflicts of interest are possible even when a spouse is uncompensated.
“In instances where you have a family member who may be uncompensated but serves on a board that stands to benefit from an action taken by a public official, that can create the conflict.”
Nonprofits are subject to the same rules as for-profit businesses, he said.
Caruso cautioned that he couldn’t offer an opinion on this week’s council action. Among the things a full-blown inquiry would require, he said, was “trying to figure out in the future what this action today may permit, and [whether] that nonprofit is going to derive some benefit from that.”
Caruso added that in cases where circumstances were complicated, the best approach for officials was to “recognize that and seek the advice of your solicitor” or consult the ethics board.
The city of Pittsburgh has its own ethics board; its duties include providing advisory opinions on ethical questions. It is unclear whether Lavelle availed himself of that opportunity: Leanne Davis, the board’s executive manager, said she could not respond to that and other questions because the board “cannot comment as to pending or potential cases.”
The city’s ethics rules do not appear to entirely coincide with state law. The city bars public officials from exercising “influence with respect to property or a business with which her or a member of his or her direct family is associated.” But the city’s definition of “direct family” appears to exclude spouses, while including step-siblings and other relations. Spouses are included in a separately defined category of “immediate family.”
Under state law, ethics violations can result in fines or other punishment, but Caruso said council's vote itself would stand -- unless council chose to rescind it and vote again. If Lavelle stepped aside, he acknolwedged, that would leave his constituents -- who live closest to the facility -- without a voice at all. Caruso called that unfortunate, but said the law may assume that "to eliminate the conflict is as important, or maybe more important, than a particular vote."
Even without Lavelle’s vote, council would have approved the deal by a 6-2 margin this week. But Packer said a revote might have a much different outcome. “How do we know this would be a 6 to 2 vote?" Council is on recess for August, which means a revote "would give us more time to negotiate a better agreement.”
Packer said he would file a complaint, either with the city or the state, within “a couple of days.”