I-Team Update: City officials clear whistleblower's name

SAN FRANCISCO (KGO) -- San Francisco has finally settled a whistleblower lawsuit brought by a doctor at Laguna Honda, the city's long-term care hospital. The amount of the settlement is $750,000, but even more interesting are the non-monetary terms of the deal forcing public officials to clear the whistleblower's name and reputation.

The I-Team covered the Health Commission meeting Tuesday evening for this update on our investigation from May 2010.

The cost to the city is far greater than the $750,000. Person after person described what a great loss Derek Kerr, M.D., is to the patients of Laguna Honda. It was a highly-unusual move at the San Francisco Health Commission meeting. To settle a wrongful termination lawsuit, the head of Laguna Honda had to read the wording on a plaque to be installed at the hospital, honoring a whistleblower.

Laguna Honda Hospital administrator Mivic Hirose said, "The plaque will say, 'In recognition of Derek Kerr, M.D., for his contributions to Laguna Honda and its hospice and palliative care program (1989-2010).'"

The whistleblower, Derek Kerr, M.D., told the I-Team, "It was forced out of her, it doesn't come from her heart, but the fact that she had to do it is the vindication that they didn't get away with smearing and trying to bury me."

In an I-Team Investigation three years ago, Kerr blew the whistle on the abuse of the gift fund meant for patients, many of whom have no family or money. The fund is supposed to pay for creature comforts -- a cold soda from the machine, a favorite food, a small TV set, or bus trips off hospital grounds.

But, we confirmed administrators raided the patient gift fund for air travel and fancy meals for themselves, and even custom, laser-etched Laguna Honda pedometers for staff.

"It was totally shocking to us," said Kerr. "We don't understand how they can do it. We don't understand why it took them so long to fix it."

After our report, the controller ordered Laguna Honda to return $350,000 to the patient gift fund. And in the settlement, the city agreed to pay Kerr $750,000, to provide one hour of training to Laguna Honda's executive committee on whistleblowing and the First Amendment rights of city employees, and to install a plaque at the hospital honoring the doctor for his work.

I spoke to Kerr's attorney, Mathew Stephenson, Tuesday night.

Dan Noyes: "It's funny, but it's an apology without the word 'apology'."
Stephenson: "Yeah, you don't often get that kind of satisfaction in litigation. The fact that they were willing to stand up here in public and say that they were at fault is a pretty extraordinary thing, in my experience, extremely rare."

Tony Hall, the former supervisor for the district where Laguna Honda is located, blasted the Health Commission for lack of oversight.

"You should be ashamed of yourselves and this should never happen again and I can tell you this, if any of you are ever involved in any type of a cover up again, I will lead a charge in this city to have you held responsible," said Hall.

Several members of the public, including Kerr's partner and a former doctor at Laguna Honda, Maria Rivero, M.D., called on the commission to remove hospital administrator Mivic Hirose.

"What is the message that you send when a CEO who retaliated against a whistleblower is still in office? What is the message?" asked Rivero.

Noyes: "Mivic, you heard the calls for you to be removed, how do you answer those?"
Hirose: "I'm sorry, Mr. Noyes, but I'm not the spokesperson."

Kerr now tells the I-Team he does not plan on returning to medicine. He has a new calling -- helping other whistleblowers speak out against government waste and corruption.

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san francisco city hall, i-team, dan noyes

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