CLEVELAND — The battle between MetroHealth and former CEO Dr. Akram Boutros, who was fired last month amid allegations of misappropriation of funds, continues to escalate.
On Thursday, Boutros filed a second lawsuit against MetroHealth, including its Board of Trustees, Board Chair Vanessa L. Whiting, and Vice Chair J.B. Silvers. Boutros is suing MetroHealth for breach of contract, defamation, wrongful termination, and civil liability for criminal acts related to retaliation and intimidation.
Boutros is claimed to have authorized more than $1.9 million in bonus payments to himself over a four-year period beginning in 2018, without disclosing those payments to MetroHealth's Board of Trustees. Boutros believed the bonus payments fell in line with company policy, and had previously filed a lawsuit against Metro's board accusing members of "wildly reckless, illegal, and damaging actions."
In the new 84-page lawsuit, Boutros claims that "through their breaches of contract, defamation, broken promises, pressure tactics, wrongful termination of his employment and criminal acts," MetroHealth's board cost him more than $8 million in earned compensation, severance and benefits. The suit adds that the defendants "obliterated Dr. Boutros' legacy at MetroHealth and destroyed his future, costing him opportunities for prospective employment worth at least $20 million additional dollars. The anguish and suffering from the defendants' groundless assault on his reputation has caused Dr. Boutros additional tens of millions more in damage."
“In firing Dr. Boutros, the MetroHealth Board of Trustees acted in bad faith. They relied on an incomplete, unauthorized investigation and made decisions in secret, violating the public’s trust,” said Jason Bristol, an attorney at Cohen, Rosenthal & Kramer LLP representing Boutros. “The Board’s own bylaws, resolutions, and meeting minutes demonstrate that Dr. Boutros acted in accordance with the authority granted to him by the Board. The Board’s assertions to the contrary are knowingly false and are designed to destroy Dr. Boutros’ reputation while protecting their own.”
MetroHealth has released a statement in response to the Boutros suit:
"Dr. Boutros’s latest lawsuit is another attempt to rewrite history.
Once again, let’s be clear: Dr. Boutros was terminated because we learned he was paying himself almost $2 million in bonuses that had not been authorized by the MetroHealth Board. It’s that simple. To claim otherwise is to continue to smear the reputation of the very institution he claims to love and to undermine his successor.
We are moving on with a new CEO who is committed to making the communities and the patients we serve healthier. This lawsuit is just another distraction, and we look forward to getting back to our mission and focus on the community."
MetroHealth has retained an independent audit firm to review "the unauthorized bonuses" that were paid to the former CEO. The auditors will release their report to new MetroHealth President and CEO Dr. Airica Steed and the Tucker Ellis Law firm, who conducted the investigation on Boutros commissioned by MetroHealth.
The investigation from attorney John McCaffrey of Tucker Ellis LLP claims Boutros' bonus payments came from self-assessments based on metrics he himself designed. Furthermore, the report further states the board did not delegate its own authority to authorize compensation and that Boutros did not disclose his metrics to the board, nor did he acknowledge the payments themselves "at other points in time in which such a disclosure would be relevant."
"This evidence, at a minimum, establishes the Board’s right to terminate Boutros's employment for Cause, as defined in the employment agreement," McCaffrey wrote. "And at worse, this evidence suggests that Boutros may face potential criminal liability for Ohio ethics violations, theft in office, and other related statutes."
Though he did self-report his actions to the Ohio Ethics Commission, Boutros has countered by alleging his firing was a case of "pure retaliation," telling 3News' Monica Robins he had acted as a "whistleblower" against the board when he accused them of illegally discussing candidates for his potential replacement outside of public meetings.
Boutros and Bristol make five key points in response to McCaffrey's investigation:
- Per Boutros' employment agreement, the Board only set his base salary. There is no provision in the agreement for approving his total compensation.
- Dr. Boutros never exceeded his authority in administering the incentive program, nor did his total cash compensation ever exceed the cap set by the Board in the approved resolutions on Executive Compensation Methodology.
- The Board delegated the authority to manage and control the hospital to the President & CEO, including setting wages and salaries, and to take all actions necessary to enact the incentive program, without exception.
- Dr. Boutros’ annual incentive compensation was part of the incentive program approved by the Board every year in aggregate. In nine years, the Board never once asked for details regarding individual compensation, the metrics or why any individual, including Dr. Boutros, received a bonus.
- Dr. Boutros was never asked for a report on his compensation by the Board of Trustees or its advisors, Findley Davies.
You can read Boutros' entire lawsuit below:
The fallout from the divorce between MetroHealth and its former CEO was a major reason why one member of the Board of Trustees resigned.
On Dec. 8, Terry Monnolly announced his resignation from the MetroHealth Board of Trustees, citing health reasons. The 74-year-old businessman had been on the board for 17 years and his term was scheduled to run until 2028.
But in an email sent by Monnolly to the MetroHealth Board of Trustees on November 30, he made it clear that he was also unhappy about the board's decision to terminate CEO Dr. Akram Boutros just over a month before Boutros' planned retirement.
"I have been considering the Board's action on 11/21/2022," Monnolly wrote. "I disagree with the action that was taken on that date. It is my belief that the Board had authorized Dr. Boutros to take all actions that he took. To terminate him based on the belief that he would somehow take money from MetroHealth in the last month of his term, does not set well with me."
Last week, Cuyahoga County Council unanimously passed an amendment to its 2023 budget that places additional safeguards on taxpayer subsidies going to MetroHealth. The hospital system traditionally receives roughly $32 million a year from the county in 12 automatic monthly payments, but under the new parameters, only the first three will be automatic this year while Council must approve the final nine months on a quarterly basis.