Federal complaint filed after wave of anti-immigrant sentiment kills housing deal in Lawrenceville, VA

A federal complaint has been filed by Housing Opportunities Made Equal (HOME) citing events that I witnessed and documented for Story of America. On June 20, 2014, I traveled to Lawrenceville, Virginia to film an emergency town hall meeting about the possibility of putting an Unaccompanied Alien Children’s (UAC) program on the campus of the recently closed St. Paul's College.

HOME's complaint argues that immigrant minors were denied equal housing opportunity and subjected to discriminatory statements when public outcry, much of it clearly hateful, was cited as the primary reason for moving the program elsewhere. I have shared portions of the many hours of video I shot with HOME upon their request.

I learned a lot from reading HOME's press release below. In fact, it changed my outlook on what I saw that frightful evening. The lesson for me is this: sometimes public sentiment appears to be so passionate and so overwhelming that we assume it to be the only meaningful consideration when making public policy. But what happens if that sentiment, and the decisions that stem from that sentiment, violate constitutional rights and other rights that are protected by law? Although I did not see it on June 20th, I see now that the events I witnessed in Lawrenceville may be such a case.

It's easy to forget that our nation decided to outlaw unequal treatment based on race 150 years ago, and again 50 years ago. Whether or not political entertainment combine with current events to popularize overt discrimination, the law is the law, and it needs to be enforced.

The bottom-line is that our Constitution and legal system protects minority rights despite popular opinion. It's easy to forget this when the popular opinion is expressed so loudly and dramatically. 

Below is the Story of America video I released in June documenting some of the discriminatory statements that are mentioned in the federal complaint.

CLICK HERE to read the blog post I wrote at the time, and please read HOME's press release below:  

For Immediate Release September 25, 2014   

Federal Fair Housing Complaint Filed Against The Town of Lawrenceville,
Brunswick County, and Sheriff Roberts

Every person in the U.S. is protected by the Fair Housing Act
regardless of their immigration status.

Housing Opportunities Made Equal of Virginia, Inc. (HOME) and St. Paul’s College announce the filing of a federal housing discrimination complaint at the U.S. Department of Housing and Urban Development (HUD) against the Town of Lawrenceville, Brunswick County, and Brunswick County Sheriff Brian Roberts. The complaint alleges that participants of the Unaccompanied Alien Children’s (UAC) program were denied an equal housing opportunity and subjected to discriminatory statements based on their national origin, race, and/or color. In addition, a civil rights discrimination complaint has been filed against the U.S. Department of Health and Human Services (HHS) in their Office of Civil Rights for failing to honor its contract with St. Paul’s, making housing unavailable to UAC children based on their national origin, race, and/or color.

In June 2014, Saint Paul’s College, a private enterprise zoned for such use, negotiated a contract with the U.S. Department of Health and Human Services to provide shelter for up to 500 immigrant children without parents in the United States. Upon being informed of the impending lease contract and after meaningful consultation with the college, elected and employed officials of the town of Lawrenceville and Brunswick County orchestrated and implemented a plan to block the deal. Purported concerns by these individuals are grounded in false stereotypes about Latinos and reflect discrimination based on race, color, and/or national origin.

Among other actions, Brunswick County Sheriff Brian Roberts also made discriminatory statements to the media about UAC participants. “There is this negative perception of gang violence – these people are coming from Central America,” he said, squarely attributing the discrimination to stereotypes based on the children’s national origin. Once the contract was fully executed by HHS and St. Paul’s, the same group of municipal officials continued their push to rescind it. Their efforts were successful, and HHS pulled out of the contract on June 20, 2014.

Dr. Millard (Pete) Stith, President of St. Paul’s College, stated, “Despite the blessing of Lawrenceville officials and Lawrenceville’s assurance that proper zoning requirements were met for the Unaccompanied Alien Children’s (UAC) program, the United States Department of Health and Human Services removed St. Paul’s College as a host location despite a fully executed contract. Because of this decision, St. Paul’s College has been severely injured. The school would have received $160,000 a month in rent from the federal government. This project would have given St. Paul’s College the much-needed funding to complete necessary improvements to the campus and repay creditors.” Failure to implement the contract has made housing unavailable to UAC participants based on their national origin, race, and/or color.

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First Images Inside Belhaven's Shuttered Hospital

On Sept. 16 we learned from WNCT reporter Josh Birch that Vidant Health and its LLC have changed the locks to they hospital they closed down in Belhaven, NC hoping that no more images reach the public. At issue are claims that the hospital smells of mold and is falling apart from the inside — not accurate, but nonetheless convincing for those who wish to prevent the hospital from reopening — and, concerns that medical equipment estimated at $5 million has been removed.

We decided to share images we shot inside the hospital on Sept. 11, 2014 at the request of Birch.  Vidant Health and its local collaborators were reportedly enraged by the images shot inside the hospital that were included in this report by WITN's Brendan King. The aim of Vidant Health's press release, issued by way of Pantego Creek LLC in the form of a letter to its members, was to place blame on hospital advocates for the hospital having closed, and to put pressure on those advocates to abandon legal claims for damages. But images of the closed hospital, which show it to be in good condition, and missing a lot of expensive equipment, appear to have partially upstaged them in King's report.

Story of America is producing a feature film about this controversy, and not all of what we shoot is intended for immediate public release. However, in this case, Vidant Health and Pantego Creek, LLC have decided to change the locks and prevent more images of their handiwork from escaping. The public deserves to know the condition of the hospital in Belhaven. That is why have released these videos, and will continue to release more as long as the property remains off limits to the public.

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Deeds, misdeeds, 1947 law & the original vision of Pungo Hospital

People in Belhaven have been asking themselves: what would our parents, grandparents and great grandparents do in the conflict over Pungo District Hospital? What would they think of it? How would they have resolved it?

I think I found an answer in the Registry of Deeds in the Beaufort County Courthouse in Washington, NC.

It turns out that the parcel of land where the hospital building sits was donated by the Town of Belhaven to the Pungo District Hospital Corporation spelling out that it is to be used for a hospital.

The Town of Belhaven under the leadership of Mayor W.P. O'Neal (no relation to Mayor Adam O'Neal) passed a resolution in January 1948 to deed the property to Pungo District Hospital Corporation.  
WHEREAS, the Board was authorized and empowered by Chapter 659 of the Session Law of 1947 to convey the for the use of a hospital to be operated by a nonprofit, non-stock corporation to be organized for said purpose, that of of Allen Street 100 fee wide extending from Front Street Southwestwardly to Pantego Creek, and
WHEREAS, such a corporation has now been organized and chartered for such purpose under the name of Pungo District Hospital Corporation and has requested the Town to convey said property to it for the use of a hospital to be erected thereon,

In April 1947, the North Carolina General Assembly passed a law -- Chapter 659 of the Session Laws of 1947 -- explicitly stating that the public property conveyed to Pungo District Hospital Corporation by the Town of Belhaven is to be used for a hospital or in a manner that the Town Council (Board of Alderman) consider to be in "the interest of the people" of Belhaven. 
The said property shall be conveyed to such hospital as may be determined by the board of alderman of said town, without consideration other than the benefits to be derived by the citizens of said town from the construction and operation of the hospital on the said property; and said board of alderman, in its discretion, is hereby fully authorized and empowered to appropriate and use the said property for hospital purposes in any other manner which, in its opinion, will be for the interest of the people of the said town
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Vidant Health & Pantego Creek, LLC have closed Belhaven's Hospital, for now

On April 3, 2014, Vidant Health CEO David Herman, MD spoke at the signing ceremony for the historic mediated settlement that resulted from the North Carolina NAACP's filing of a Title 6 complaint with the U.S. Department of Justice. The complaint had pointed to the disproportionate impact Vidant's takeover and closing of the Pungo District Hospital in Belhaven, NC would have on poor and minority communities, prompting the DoJ to step in.

Vidant Health, Inc. has an operating margin (profit margin for non-profits) of over $100 million per year, and is seeking increase that number to build upon its sprawling medical center in Greenville, North Carolina, about an hour west of Belhaven. In the fall of 2011, Vidant Health (then known as University Health) took control of Belhaven's Pungo District Hospital — as well as Beaufort County Hospital which is half way between Greenville and Belhaven. Both of these newly acquired hospitals have seen increased losses since their acquisition by Vidant. In the fall of 2013, Vidant announced it would close Belhaven's hospital, which was smaller and further out into the country, providing emergency services to approximately 20K people.

The NAACP argued that Vidant's rural business practice of extracting well-insured patients from wide geographic regions, while limiting emergency services to those regions, would disproportionately impact African Americans, poor, rural Americans, and other minorities. From a business perspective, it is understandable that Vidant would prefer to service customers with insurance — each year, Medicare pays out an average of $10,000 per patient and there are 13,000 Medicare recipients in the region worth $130 million dollars per year. But a preference for well-insured patients, while using vast geographic distances as barriers for uninsured patients, disproportionately impacts poor people and people of color. This much is indisputable. Vidant Health receives 70% of its funds from government programs such as Medicaid, and, under Title 6 of the 1964 Civil Rights Act, it is against the law to accept federal funds and then use them in ways that are discriminatory. (And, as Washington Post columnist Dana Milbank would point out later, even patients who DO have insurance may not be able to use it in time, to tragic results, if the closest emergency room is 75 miles away.)

The U.S. Department of Justice has an agency called the Community Relations Service (CRS) designed to help address and prevent conflict based on religion, race, color, national origin, gender, gender identity, sexual orientation, and disability. In March of 2014, CRS offered to provide mediation to settle the NAACP's Title 6 complaint against Vidant Health, Inc. and both parties accepted. The Department of Justice then sent Suzanne V. Buchanan, a Conciliation Specialist with CRS to facilitate the mediation sessions. Vidant Health sent CEO, Dr. David Herman, attorney Mary Beth Johnston, and other executives and attorneys with the corporation. The North Carolina NAACP sent its president, Rev. Dr. William Barber, its lead attorney Alan McSurely, and regional NAACP leaders such as Mike Adams, president of the Hyde County NAACP and Bill Boothe, president of the Beaufort County NAACP. Belhaven's Mayor Adam O'Neal represented the Belhaven town and region.

Story of America was among the television and print journalists who waited outside of mediation sessions for news. Often, the statements were brief, leaving to interpretation how things were progressing. After the second day of mediation, the body language was gloomy, and we soon learned that Vidant Health had drawn up a contract to pass the hospital over to its partner company Pantego Creek, LLC. We took this as a sign that Vidant didn't like the way that mediation was progressing, and would rather have the hospital, and thus, potential Civil Rights Act violations, become the responsibility of Pantego Creek LLC (which is not dependent on federal funds to stay in operation).

But  on March 26 during the 4th day of mediation, things seemed to take a turn for the better. The two sides came out and announced that a settlement had been reached that would avert the planned closure of the hospital on April 1, and transfer the hospital back to the community by July 1. When asked about the paperwork hastily drawn up to pass the hospital over to Pantego Creek, LLC, Dr. Herman said that this contract had not been executed.

However, the contract was executed in June when Pantego Creek, LLC announced that it would not allow the hospital transfer to go through, thus breaking the DoJ-mediated settlement.


What's with Pantego Creek, LLC?

The Vidant's contract to transfer the hospital to Pantego Creek, LLC, which Story of America obtained during the second day of mediation, was an intense curiosity for reporters at the time. But this was defused when Vidant Health announced that the contract was never executed, and, a mediated settlement would be signed instead.The timing of this maneuver looms large now, in light of Pantego Creek, LLC's June 16 announcement that it would block the mediated settlement that Vidant Health had agreed to, and, that the hospital would therefore close on July 1.

Pantego Creek, LLC (PCLCC) was created at the insistence of Vidant Health in order to be the other side of a negotiation that transferred control of the hospital to the corporation. Vidant — then known as University Health Systems (UHS) — hoped that PCLCC would be less unwieldy than its predecessor, the Pungo District Hospital Corporation, might have been with over 100 shareholders. PCLCC was designed to minimize the rights of the shareholding Members and give maximum power to its appointed Managers. The Managers were not elected, for instance, as they had been under the Pungo District Hospital Corporation. Instead they were appointed by Jay "Rocky" Jacobs, the former chairman of the Pungo District Hospital Corporation, who had been a cheerleader for the Vidant acquisition and would later become a member of Vidant's board. (Exactly how this process took place is a question that later led to controversy and confusion).

The contract that gave Vidant Health control of the hospital also stipulated that Vidant would pay $50,000 to provide PCLCC with funds for legal fees associated with applying for non-profit status. However, most of those funds have been paid to attorney Arey Grady, III in recent months since the hospital closure was announced, with Grady working closely with Vidant's attorney Mary Beth Johnston to craft language in support of Vidant and the hospital closure to send to PCLCC Members.

When Vidant announced it would close the hospital in September of 2013, there was an expectation that PCLCC would object, given that the contract promised to keep the hospital open, and PCLCC's only real purpose was to see that it did. But the appointed Managers of PCLCC accepted that the hospital must be closed, and proclaimed that doing so would not be a breach of contract. On February 25, 2014, the appointed Managers engineered a vote on this question — should PCLCC take the hospital back from Vidant Health, and manage it despite personal financial risk for all the Members, including a $28,000 price tag, each, for startup cash. The result was a lopsided vote: no.

But then the Department of Justice stepped in. Vidant Health, and, it was widely believed, PCLCC decided to allow the mediation process to play out. The subsequent mediated settlement chose July 1 as the handover date. But in June, the team of lawyers and specialists assembled by the town of Belhaven to facilitate this transfer asked Vidant Health for 6 to 8 more weeks due to fundraising obstacles — for instance, Vidant Health had agreed in the signed settlement to turn over the hospital's financial assets and $1 million to the new hospital management team, but had not done so. Rather than responding to this request, Vidant Health allowed Pantego Creek, LLC to speak for them. The answer would be no. The settlement would be broken. And suddenly, public scrutiny on PCLCC intensified. 

Vidant Health's executives claimed to be surprised when PCLLC's attorney, Arey Grady III, announced that the mediated settlement would not go forward. However, one Vidant board member, Jay "Rocky" Jacobs, told Story of America that the February 25, 2014 vote by the LLC had ensured that the settlement signed on April 3 would not go through.

Jacobs told us that he decided not to be a Manager when that corporation was absorbed into PCLCC to avoid the appearance of conflict of interest, since he had accepted a Vidant position. But Jacobs has remained a Member of PCLCC, one who seems to be in the know. He said that the only "surprise" to him was the timing of the announcement, which came just a few weeks before the hospital transfer had been scheduled to take place. He had thought it would be sooner, he said. By mid June, nearly two hundred thousand dollars, and nearly three months of effort, had been spent racing to prepare for the July 1 transfer. 

Documents show that Grady, Vidant President Roger Robertson, and Vidant attorney Mary Beth Johnston began crafting the language with which PCLCC would undermine the settlement just a few days after the settlement was signed, and, that language first appeared in a letter to PCLCC Members drafted by Grady, and signed by the PCLCC Managers, on April 10, just one week later. Robertson contacted Grady the day after the settlement about how to handle communication with PCLCC Members about the settlement. A letter from Robertson to Grady dated April 4 reads, "We also understand that you have requested certain back-office assistance so that you may communicate with your membership concerning these new developments. Vidant is also willing to make such support services available as reasonably requested."

Despite having, apparently, worked with Grady during the week following the signing of the settlement to craft language to justify abandoning it, Robertson said in a statement 10 weeks later: “Vidant Health has learned that Pantego Creek, LLC is unwilling to agree to a transfer of ownership of Vidant Pungo Hospital to the Town of Belhaven. Pantego Creek’s decision in this regard is unexpected, and places Vidant Health in a difficult position in its ability to continue to assist the Town of Belhaven in its efforts to assume control of the hospital.”

The North Carolina NAACP responded by reopening the Title 6 Complaint under the Civil Rights Act of 1964. At a June 27 press conference, North Carolina NAACP attorney Alan McSurely explained his legal argument. "We feel that if the Department of Justice knew what we know about this situation, they would open up an investigation," he said afterward. 

The complaint asked for injunctive relief to prevent the closure of Pungo District Hospital, stating that a permanent closure would have a disproportionate impact on poor people and minorities. The complaint also asked for an investigation into the relationship between Vidant Health and Pantego Creek, LLC.  The Department of Justice said that there was not enough time to investigate whether an injunction was warranted, but that an investigation would take place.  In addition, the DoJ invited Vidant Health to return to mediation, and this time invited Pantego Creek, LLC as well.  


Tough Questions for Vidant

On June 18, 2014 in Hyde County, NC — which is one of the largest counties in the state and has no hospital at all — concerned citizens gathered to hear a presentation by Vidant Health CEO Dr. David Herman.  It had been only 2 days since the surprise announcement by Pantego Creek, LLC that the DoJ-mediated settlement would not go through, and that the hospital thus be closing on July 1. This would leave many residents in Hyde County more than 70 miles from emergency health services. In this video, Dr. Herman has just finished giving a presentation that outlines why it is so difficult to make a profit in the health care industry while still offering basic medical services in rural areas. 
Story of America decided to release this audio recording when Vidant Health released this statement, which we consider to be inaccurate:
The recording took place moments after Dr. Herman's presentation and contentious Q&A at the Swan Quarter, NC court house on June 18, 2014. We believe that Arthur H. Keeney, III — who, like Jay "Rocky" Jacobs is both a Vidant board member and a member of Pantego Creek, LLC — was being truthful when he told us that Vidant Health — then University Health Systems (UHC) — paid for the start-up costs of Pantego Creek, LLC. Keeney also says that there was no election to choose the Managers of the LLC, and that he believes that Jacobs appointed them. 
...Vidant Health was not involved in the establishment of the LLC, its membership, or its board. We are not involved its choice for independent legal counsel, nor do we pay for it.
We believe that Keeney's words, and the statement issued by Vidant Health on the day of the hospital's closing cannot both be true. We decided to correct the record because we feel it is in the public interest.
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Mayor O'Neal's 273 mile walk to Washington DC

"Walking Mayor" Adam O'Neal (R) will complete his 273-mile march from his home town of Belhaven, NC to the U.S. Capitol Building in the name of Medicaid expansion, endangered rural hospitals, and the Pungo District Hospital, which closed on July 1 endangering his community.

A new grassroots organization called SaveOurHospital.org — which launched on the day Mayor O'Neal's walk began on July 14 — has announced a detailed route for Monday July 28, the final morning of the journey.  The 3.8 mile walk will begin at Gravelly Point Park in Arlington, VA, just north of Reagan National Airport at 7:30 AM, and arrive at the U.S. Capitol at 11:10 AM where a rally and press conference begins at 11:30.  

Two bus-loads of supporters from SaveOurHospital.org will leave Belhaven, NC at midnight, and many will embark with the Mayor at 7:30, while others will join him along the route, which takes him across the 14th Street Bridge to the Jefferson Memorial (8:10 AM), the Martin Luther King, Jr. Memorial (8:40 AM), the Lincoln Memorial (9.05 AM), the Washington Monument (9:45 AM), the Grant Memorial on the west lawn of the U.S. Capitol (10:45 AM), and finally Upper Senate Park (on the eastern, Supreme Court side of the Capitol Building) for the rally at 11:10 AM.

Mayor Adam O'Neal is a 45-year-old conservative Republican who entered elective office to serve a town of 1,700 people, 70% of whom are African American. The town's most important economic engine, Pungo District Hospital was recently purchased and closed by Vidant Health, Inc. The federally designated Critical Access hospital had served over 20 thousand people, including the residents of eastern Beaufort County where Vidant Health operates another hospital 30 miles away in Washington, NC, and neighboring Hyde County which has no hospital and no doctors. Many Hyde County residents had been traveling more than 50 miles to reach Belhaven's hospital.

On July 5, just 4 days after Vidant Health shut the hospital's doors, Portia Gibbs, 48, died of heart failure while waiting for a helicopter to arrive from Raleigh, which is 162 miles away. Gibbs' husband and children were there to see O'Neal off on his walk, and they gave him a framed picture of Portia to carry with him. He plans to show it to members of Congress, and officials in the Obama administration in two days of meetings to ask for federal laws that protect Critical Access hospitals, and to strategize on how to convince state governments, particularly in the South, to accept federal funds for Medicaid expansion.

Rev. Dr. William Barber will greet Mayor O'Neal when he arrives in Washington DC on Monday, July 28th.  Monday is a special day in North Carolina, and Rev. Barber has called a special Washington DC Moral Monday for rural healthcare.  READ MORE.


Eastern North Carolina Reporter Jonathan Rowe on Mayor Adam O'Neal's decision to walk 273 miles to Washington DC in the name of accessible emergency healthcare for his town and his region.


July 14, 2014

BELHAVEN — Belhaven Mayor Adam O’Neal announced he will walk to Washington, D.C., continuing his fight to save Pungo District Hospital.

O’Neal announced his plan to fight back against the closing of the hospital at Monday’s Beaufort County Commissioners meeting. Vidant Health closed the hospital on July 1 despite federal mediation between Vidant, the NC NAACP and the town. The mediation by the U.S. Department of Justice was in the effort to transfer the hospital from Vidant to the town.

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