Corporate Three Strikes Bill, Killed By Democrats In CA Senate This Week, Would Have Prevented Repeat Corporate Crime
Santa Monica, California — Tenet Healthcare Corporation, currently under investigation in California for Medicare fraud, may face additional federal charges after the indictment yesterday of the CEO of one of its hospitals. The investigation, the latest in a string of charges against Tenet, illustrates California’s need for strong corporate accountability legislation, said the Foundation for Taxpayer and Consumer Rights (FTCR). A bill considered the nation’s toughest corporate reform proposal by consumer advocates, the Corporate Three Strikes Act, was killed in the California Senate this week.
SB 335 (Romero), the Corporate Three Strikes Act, would have barred any corporation with three felony convictions in ten years from doing business in California. FTCR, sponsor of the proposal, said SB 335 would have created a significant deterrent to corporate criminals such as Tenet because repeat offenders would lose their right to do business in California if they received a third strike. It was defeated Wednesday when Democratic Senators Bowen and Speier* joined with Republican lawmakers to stop the bill in the Senate Appropriations committee.
“The politicians who voted against the Corporate Three Strikes bill are protecting corporate crooks like Tenet Healthcare, whose latest crimes could have been deterred if SB 335 were law today,” said FTCR consumer advocate Carmen Balber. “Tenet faces almost certain indictment for acts nearly identical to those it was convicted of eight years ago. Politicians who protect these acts will have to answer to the public why they think Tenet’s continued victimization of patients should be excused.”
Barry Weinbaum, CEO of San Diego’s Alvarado Hospital Medical Center, was indicted yesterday on allegations that he paid doctors illegal kickbacks and bribes to induce them to refer patients to Alvarado, as reported by Reuters today. Weinbaum allegedly violated doctor recruitment laws, paying doctors millions of dollars to join a practice which was participating in the illegal referral scheme. Tenet is also under investigation for overbilling Medicare, and several of its doctors are charged with performing unnecessary heart procedures.
Tenet (then called National Medical Enterprises) previously pled guilty to federal conspiracy charges in 1994 for paying kickbacks and bribes to doctors, and related medical professionals, to induce them to direct patients to Tenet’s psychiatric hospitals. In some cases, patients were committed without ever having seen a doctor and were typically held at the hospitals until their insurance benefits expired.
“If Sacramento can’t buck big business to pass SB 335’s strong protections against corporate crime, we’ll go where corporate accountability is already in high demand — the people and the ballot box,” said Balber.
SB 335 proposed to revoke the charter of any corporation with three felony convictions in a ten-year period and stop out of state felons from doing business in California. It would make California the first state in the country to have a three strikes act for corporate crime — putting the penalty for repeat corporate crooks on par with existing penalties for individual criminals. The proposal has the support of a broad coalition of labor, consumer, senior and environmental organizations.
*Senator Machado, who originally voted for SB 335, did not vote on the measure at Wednesday’s hearing