Bingham Memorial CEO Denies Allegations Of Bad Business
Updated On: May 02 2012 01:57:28 AM CDT
An eastern Idaho business is making big headlines across the Pacific Ocean in Micronesia.
International Consulting Services, LLC, or ICS, was founded in February by Bingham Memorial Hospital CEO Louis Kraml and COO Dan Cochran.
Kraml said they created the company to help a struggling hospital on the island of Saipan. That's part of the Commonwealth of the Northern Mariana Islands, which is a U.S. Territory.
According to documents, an agreement was signed by Cochran and the CEO of the Saipan hospital on February 24, turning management of the facility over to Cochran and Kraml.
But the Mariana's Attorney General, Edward Buckingham, said that document was illegal. In a cease-and-desist letter dated April 8, Buckingham said the project wasn't announced for bid, nor was it certified by his office.
Buckingham said by phone that the agreement would have given Kraml and Cochran's company a commission above industry standards and a number of fees he felt were inappropriate.
"Two entities that were really watchdogs for the Commonwealth were not involved in the initial process, mainly the Department of Finance and the Office of the Attorney General," said Buckingham. "Both entities have, I think, critical roles, one looking money and dollars and other looking at the appropriateness and legality."
The controversy has some in Saipan and eastern Idaho raising questions about Kraml and Cochran's company. Are they working on other businesses while on the Bingham Memorial clock?
In an hour long meeting with media on Tuesday morning, Kraml laughed off allegations that it was a "sweetheart" deal or on Bingham Memorial's dime. He said his only motive is to help a desperate hospital.
"This has been quite an adventure," said Kraml.
Kraml said Saipan's Commonwealth Healthcare Corporation heard about his reputation of successfully turning around struggling rural hospitals, like Bingham Memorial.
"It starts by looking at people, the people that work in a hospital," said Kraml of his strategy.
After a week in Saipan with Cochran, the two created ICS. Kraml dismissed claims of an outside relationship between Saipan hospital heads and Idaho.
"I have a connection with no one over there, except now I have a connection with the hospital from my heart," said Kraml.
Kraml and Cochran are ICS' only two employees; both co-owners through their own separate limited liability companies. Kraml has more than a dozen LLC's registered to his name in the Idaho Secretary of State online records.
He said JAG Consulting and ICS are for Saipan business, LDK and KConco are existing but inactive, and the rest, he said, are related to Bingham Memorial, which is also registered to him as BMH, Inc.
"This is me moonlighting, okay," he said. "Which is, I can do that with my contract at the hospital."
But when that contract earned him more than $700,000 in 2009, according to 990 tax forms, it raises the question: When does the CEO have time to moonlight?
"When I sit back, I've probably got an extra two-and-a-half, three hours a day I can contribute," he said.
Kraml said he took a week of vacation days to make his first and only visit to Saipan. He said ICS doesn't have an office, but emphatically stated that work is not performed at Bingham Memorial.
"We make sure that's absolutely separate," said Kraml. "Someone asked me, 'Do hospital employees help?' I said, 'There's not even a Bingham paper clip involved in this project.' There can't be. That would be wrong."
Kraml pointed to documents he said were from the Saipan hospital's board of trustees and director, defending the integrity of his company.
In a letter dated April 27, board members wrote, "ICS has done nothing illegal and in fact were the only people willing to help CHCC when this small hospital was about to close, leaving the 55,000 people of Saipan without critical healthcare."
Kraml said the adventure didn't start as a business, rather, as efforts to help out. At the same time, he said, if he and Cochran do great work, they expect to be paid for it.
Kraml said Cochran is in Saipan with his wife right now, working to hammer out the details.
Buckingham said negotiations are on-going. He hopes the two sides will reach a legal contract this week.
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