Should the CEO of Enron be permitted to sit on the board of the SEC?

There is a reason why we have laws and regulations prohibiting CEOs of businesses from serving on government regulatory boards. Similarly, there is a reason why doctors working for hospitals are prohibited from being on the board that regulates hospitals. Doctors can be swayed by slick pharmaceutical companies, insurance companies, and other special interests. This is why there needs to be a Chinese wall between those influences and someone serving on the board. In a little known race for Maricopa County Healthcare Special District board, district 5, there are five candidates. Two are doctors. One is retired, and the other is Dr. Joan Kelchner, who works for a hospital.

There are very few regulations governing the qualifications of the board. The section on Eligibility is only two sentences long. It quite clearly prohibits board members from working for a healthcare institution. “Directors shall not be an elected or appointed state or county official, an employee of the District or a director, officer or employee of another healthcare institution.” (http://www.mihs.org/docs/112807approved-signedbylaws.pdf – p. 6, Sec. 5)

Dr. Joan Kelchner works for a hospital in Yuma. As such, she is not eligible to serve on the board. To do so would violate the board rules. Sources tell us there is a letter on file at the hospital saying there is no conflict. Attempts are currently being made to secure a copy of that letter to see exactly what it says. Even the Arizona Republic has noted there appears to be a conflict (http://www.azcentral.com/arizonarepublic/local/articles/2008/08/26/20080826mihssigs0826.html)

Dr. Kelchner has a blatant conflict of interest and should either drop out of the race or resign from her position at the hospital. Since the board position does not pay (it only meets once a month), it is understandable why Dr. Kelchner is still working at the hospital. But if she cannot find alternative employment, she should not be in a position of oversight of the district. The hospital has been plagued by financial problems, and someone beholden to the medical industry which is biased in favor of spending money in this area is prohibited for good reasons.

Dr. Kelchner has been endorsed by Phoenix Mayor Phil Gordon and Phoenix City Councilman Michael Johnson. They were probably not aware of this conflict when they agreed to endorse her. They should withdraw their endorsements of her otherwise it creates an appearance of impropriety.

We hope that Dr. Kelchner does the right thing otherwise there should be an investigation. If she’d like to advise the board on healthcare issues, her advice should be welcomed and in fact encouraged. But to serve as an actual board member making decisions regarding millions of taxpayer dollars as someone beholden to a hospital is not right.


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