SOUNDING OFF: Ethics should dictate disposition of assets

Editor’s note: Following is Paul Freeman’s comments to the Laguna City Council on Dec. 2.

?

Mayor Boyd, council members, my name is Paul Freeman, a property owner on Shady Lane. I’m here to lend my voice to concerns, reported in local newspapers, about the disposition of assets owned by the recently dissolved local hospital foundation.

Let me say at the outset I share such concerns. Some background: Firstly, I am here to speak strictly for myself. I’ve not shared with anyone what I was planning to say. Secondly, the community owes Elizabeth Pearson a big “thank you.” Were it not for her, it is highly probable that the hospital’s land would have been sold to a for-profit developer with no bidding process, no city involvement, no guarantee of a long-term hospital lease. Thanks are also due to this City Council and the state attorney general’s office for their effective intervention, the upshot of which was a far more constructive outcome than otherwise could have been reasonably expected.

My final background comment is to emphasize this last point. Laguna Beach and the other cities served by the hospital are fortunate that the St. Joseph system has stepped up. They have the financial capacity and management know-how to reposition a tired institution for long-term success. One look at the Mission campus, at its emergency room and facilities developed in partnership with Children’s Hospital, for example, leaves no doubt.

Whatever painful, even contentious issues emerge, then, are nice problems in comparison with the alternative of losing the hospital altogether, or having the land under that hospital acquired for speculative purposes, a recipe for disaster.

I had thought about coming here before, given my knowledge of undue pressure brought to bear on former hospital foundation board members, whose belief that Adventist executives would make good on their threats to close the hospital if they didn’t play along put them in a position they never deserved to be in, given their years of devotion and faithful service to that institution. I was compelled to come here after reading contrasting quotes from local donors, understandably asking that restricted local gifts remain local, and Adventist corporate and legal representatives, saying all that’s up to the state attorney general’s office. In other words, the Adventist position is that it’s up to others to decide if the assets they’ve taken from the community foundation they’ve just dissolved should be returned and put back to work as intended, in the community.

Our current national economic disaster serves as another sign that many have lost sight of a useful distinction. They’ve lost sight, owing to an unadulterated greed that colors how they view the world and their role in it, of the difference between rules and ethics.

Rules are something imposed. We follow them or face consequences. Ethics are something we should embrace ourselves, heads and hearts in equal measure. Apparently all this has been lost on those at the top of Adventist. It shouldn’t need to be said, but evidently it must be said: Fundamental to the business of philanthropy is the donor’s expectation that charitable gifts and especially restricted funds given for specific purposes be used accordingly.

Maybe Adventist has some arcane point they can hang their hat on. But even if their play proves legal, it remains outrageous. Equally outrageous would be if executives who sang from this songbook are allowed near the hospital once it changes hands. The only thing more outrageous would be the failure of the state to redress this attempted theft of community assets. I’m actually confident that won’t happen, but you never know, and on this one I had to speak out.

PAUL FREEMAN served on the Laguna Beach City Council from 1994 to 2002 and was mayor twice. He now lives in Dana Point.