October 3, 2007 CONGRESSIONAL RECORD — SENATE S12525 killed at work late one afternoon. Wit- they served a second blow against Americans SUSPECTED HATE CRIME MURDERS nesses told detectives that they saw who shared their ethnicity and religion but September 15—San Gabriel, CA: An Egyp- four males leave the site in a white not their hate and violence. tian-American grocery store owner Adel Taken from the landmark report, Report four-door sedan. No money or merchan- Karas, 48, was shot to death while at work. on Hate Crimes & Discrimination Against After a confrontation between the owner and dise was stolen. The employee had re- Arab-Americans: The Post-September 11 ceived threats since mid-September. two customers, the two men shot him and Backlash (2003:69–70) produced by the Amer- sped off in a Honda driven by a third man, In Minneapolis, a Somali man wait- ican-Arab Anti-Discrimination Committee leaving the money in the cash register in- ing at a bus stop was beaten uncon- Research Institute, the following are exam- tact. (AP, 10/10/01) The U.S. Department of scious and later died in the hospital. ples of confirmed hate crime murders and Justice investigated the slaying as a hate His son believes the assault was the re- those suspected to be hate crime murders crime murder. sult of an article in the Minneapolis against Arab Americans and those perceived September 17—Haines City, FL: 45-year-old to be Arab or Muslim. As hate crimes con- Indian American businessman Jayantilal Star Tribune, which reported that local tinue against the community, ADCRI will Somalis might have inadvertently do- Patel was found gagged, bound and beaten at issue their next report on hate crimes in late the motel he owned and operated. A month nated to an organization now linked to fall 2007. later, police arrested Patel’s murderers Sean Osama bin Laden. In Los Angeles, Syr- CONFIRMED HATE CRIME MURDERS Russell, 23 and Kimberly Williams, 20. The ian-born liquor storeowner, Ramez September 15—Mesa, AZ: 49-year-old In- pair confessed to killing Patel, stealing his Younan, was shot to death behind his dian Sikh, Balbir Singh Sodhi, was shot money and fleeing in his car. (The Wash- cash register. Police said they had no while planting flowers outside his Chevron ington Post, 1/30/02) The U.S. Department of suspects and no clear motive for the station. His murderer, 42-year-old Frank Justice investigated the slaying as a hate shooting and no money was stolen from Roque, had spent the day drinking and rav- crime murder. ing about how he wanted to kill the ‘‘rag September 18—Ceres, CA: The body of the store. The Los Angeles Police De- heads’’ responsible for the terrorist attacks partment found Younan’s body but no Surjit Singh Samra, a 69-year-old Sikh, was four days earlier. After being kicked out of a discovered two days after he had left his witnesses. bar, Roque went on a shooting rampage. He home for an evening walk. His body was These examples emphasize the need first shot and killed Sodhi, and afterwards found beneath about five feet of water in a for effective legislation and the impor- fired on the home of an Afghan family. He nearby irrigation canal. Samra still was tance of providing adequate resources then shot several times at a Lebanese-Amer- clothed, but his turban and glasses were to state and local law enforcement to ican clerk who escaped injury. During his ar- missing. His wallet was in his pocket, money investigate and prosecute hate crimes. rest he yelled, ‘‘I am a patriot!’’ and ‘‘I stand still intact. An autopsy determined the man for America all the way!’’ The U.S. Depart- had drowned and there was no significant Violent hate crimes can’t be tolerated. ment of Justice investigated the slaying as a We can reverse the tide of hatred and trauma that suggested foul play. However, hate crime murder. Samra’s family suspects he was the victim of bigotry, by sending a loud, clear mes- September 15—Dallas, TX: 46-year-old Pak- a hate crime and pushed into the water. (Mo- sage that hate crimes will be punished istani Muslim Waqar Hasan was shot in the desto Bee, 10/18/01) to the full extent of the law, and will face while cooking hamburgers in his gro- September 29—Reedley, CA: A 50-year-old not be tolerated against any member of cery store. 32-year-old Mark Anthony Arab-American store employee, Abdo Ali Stroman, confessed on a Dallas radio pro- Ahmed, was shot several times and killed society. gram to having committed the murder, say- while at work in the late afternoon. Wit- The Matthew Shepard Act is sup- ing that he had killed Hasan and another nesses told detectives that they saw four ported by a broad coalition of 210 law man (see below) and shot a third out of re- males speed from the store in a white four- enforcement, civic, disability, religious venge for the terrorist attacks (see also door sedan. No money or merchandise was below) battery, September 21—Dallas, TX. and civil rights groups, including the stolen. The employee had received threats During the interview, Stroman confessed International Association of Chiefs of since mid-September. (The Fresno Bee, 10/2/ that he wanted to ‘‘retaliate on local Arab Police, the Anti-Defamation League, 01) The U.S. Department of Justice inves- Americans or whatever you want to call the Interfaith Alliance, the National tigated the slaying as a hate crime murder. them.’’ He also added that he ‘‘did what October 3—Los Angeles, CA: A 53-year-old Sheriff’s Association, the Human every American wanted to do but didn’t. Palestinian-born clothing salesman, Rights Campaign, the National District They didn’t have the nerve.’’ (AP, 2/16/02) The Attorneys Association and the Leader- U.S. Department of Justice investigated the Abdullah Mohammed Nimer, was killed in ship Conference on Civil Rights. All of slaying as a hate crime murder. Stroman Los Angeles while making his door-to-door was convicted and sentenced to death. rounds. There are no known witnesses but these diverse groups have come to- Mr. Nimer’s family is convinced that the gether to say now is the time for us to September 19—Lincoln Park, MI: A 45- year-old U.S. citizen, Mr. Ali Almansoop, killing was a hate crime. Neither money nor take action to protect our fellow citi- originally from Yemen, was shot to death goods were stolen. (AP, 10/9/01) The U.S. De- zens from the brutality of hate-moti- while fleeing his attacker. The victim was partment of Justice investigated the slaying vated violence. The Senate did just asleep with his girlfriend when her ex-boy- as a hate crime murder. that last week, and we must do all we friend, Brent Seever, 38, broke into her October 14—Minneapolis, MN: A 65-year-old can to see that this urgently needed apartment, dragged him out of bed and, ac- Somali man, Ali Warsame Ali, was beaten federal legislation is enacted into law cording to his own police confession and the unconscious while waiting at a bus stop. He girlfriend’s statements, threatened, ‘‘I’m later died in the hospital. His son believes as soon as possible. the assault was the result of a recent article Mr. President, I commend the Amer- going to kill you for what happened in NY and DC.’’ The victim fled outside and, as he in the Minneapolis’s Star Tribune, which re- ican-Arab Anti-Discrimination Com- was running, he was shot in the back. The ported that local Somalis might have inad- mittee for calling the Nation’s atten- U.S. Department of Justice investigated the vertently donated to an organization now tion to this serious problem, and I ask slaying as a hate crime murder. linked to Osama bin Laden. (Pioneer Press) unanimous consent that an excerpt October 4—Mesquite, TX: Vasudev Patel, a The U.S. Department of Justice investigated from their recent report be printed in 49-year-old Indian gas station owner, was the slaying as a hate crime murder. October 17—Los Angeles, CA: A Syrian- the RECORD. shot to death during an armed robbery. His killer, Mark Anthony Stroman (see above), born liquor storeowner, Ramez Younan, was There being no objection, the mate- shot to death behind his cash register. Police rial was ordered to be printed in the initially explained that the killing resulted from the robbery, but later gave a con- said they had no suspects and no clear mo- RECORD, as follows: flicting explanation, telling police that he tive for the shooting. No money was stolen AMERICAN-ARAB ANTI-DISCRIMINATION was motivated by vengeance for the terrorist from the cash register. Alerted by an anony- COMMITTEE attacks. Stroman alleged that he had lost a mous 911 call about*** Passing legislation to prevent hate crimes relative in the World Trade Center. A secu- f is also vitally important to the Arab Amer- rity camera recorded the armed man walk- ican community. Arab Americans have expe- ing into the station, ordering the owner to NURSING HOMES rienced a surge in hate crimes directed give him all of the money before shooting Mr. GRASSLEY. Mr. President, for 10 against them over the past several years. him. Stroman then attempted to open the years, I have advocated for stronger Following the September 11 terrorist attacks cash register and failed. He then fled without measures to ensure that America’s on our nation, the FBI documented a 1,600 taking any of the money. (The Dallas Morn- nursing home residents receive the percent increase in hate crimes against those ing News, 11/3/01) On April 4, 2002, Mark An- perceived to be Arab or Muslim and a 130 per- thony Stroman was sentenced to death for quality of care they deserve. Currently, cent increase in incidents directed at indi- this slaying. (Also see above, September 15— over 1.7 million Americans live in nurs- viduals on the basis of ethnicity or national Dallas, TX, and Attempted Murder, Sep- ing homes. This number will grow by origin. When terrorists attacked our nation, tember 21—Dallas, TX) (Reuters, 4/4/02) leaps and bounds as the baby boomer

VerDate Aug 31 2005 03:34 Nov 30, 2007 Jkt 059060 PO 00000 Frm 00073 Fmt 0624 Sfmt 0634 J:\CRONLINE\2007BA~1\2007NE~2\S03OC7.REC S03OC7 mmaher on MIKETEMP with CONG-REC-ONLINE S12526 CONGRESSIONAL RECORD — SENATE October 3, 2007 generation ages. Therefore, there has There being no objection, the mate- ceed in court and for regulators to levy never been a more critical time to rial was ordered to be printed in the chainwide fines by creating complex cor- make sure that the Federal Govern- RECORD, as follows: porate structures that obscure who controls their nursing homes. ment does all it can to protect the [From the New York Times, Sept. 23, 2007] By contrast, publicly owned nursing home most vulnerable among us from sub- AT MANY HOMES, MORE PROFIT AND LESS chains are essentially required to disclose standard care. NURSING who controls their facilities in securities fil- In late September, an article on the (By Charles Duhigg) ings and other regulatory documents. The Byzantine structures established at front page of the New York Times un- Habana Health Care Center, a 150-bed nurs- homes owned by private investment firms derscored this issue and brought to ing home in Tampa, Fla., was struggling also make it harder for regulators to know if light some troubling data. The article, when a group of large private investment one company is responsible for multiple cen- firms purchased it and 48 other nursing entitled ‘‘At Many Homes, More Profit ters. And the structures help managers by- homes in 2002. and Less Nursing,’’ studied the quality pass rules that require them to report when The facility’s managers quickly cut costs. of care at investor-owned nursing they, in effect, pay themselves from pro- Within months, the number of clinical reg- homes. The findings were alarming, to grams like Medicare and Medicaid. istered nurses at the home was half what it Investors in these homes say such struc- say the least. had been a year earlier, records collected by Using numbers from the Centers for tures are common in other businesses and the Centers for Medicare and Medicaid Serv- have helped them revive an industry that Medicare and Medicaid Services, the ices indicate. Budgets for nursing supplies, was on the brink of widespread bankruptcy. article compared several investor- resident activities and other services also ‘‘Lawyers were convincing nursing home owned nursing home chains to indus- fell, according to Florida’s Agency for residents to sue over almost anything,’’ said try-wide averages for several indica- Health Care Administration. Arnold M. Whitman, a principal with the tors. Here is what was found. The in- The investors and operators were soon fund that bought Habana in 2002, Formation earning millions of dollars a year from their Properties I. vestor-owned homes, on average, had 49 homes. fewer clinical registered nurses per Homes were closing because of ballooning Residents fared less well. Over three years, litigation costs, he said. So investors like resident and higher numbers of serious 15 at Habana died from what their families Mr. Whitman created corporate structures health deficiencies. The article also re- contend was negligent care in lawsuits filed that insulated them from costly lawsuits, ac- ported that, in some cases, long-stay in state court. Regulators repeatedly warned cording to his company. residents in these investor-owned the home that staff levels were below manda- ‘‘We should be recognized for supporting homes suffered from higher rates of de- tory minimums. When regulators visited, this industry when almost everyone else was terioration in their condition. they found malfunctioning fire doors, running away,’’ Mr. Whitman said in an unhygienic kitchens and a resident using a interview. I would like to highlight one case in leg brace that was broken. Some families of residents say those struc- particular. Following its purchase by a ‘‘They’ve created a hellhole,’’ said Vivian tures unjustly protect investors who profit large investment firm, one nursing Hewitt, who sued Habana in 2004 when her while care declines. home cut its number of clinical reg- mother died after a large bedsore became in- When Mrs. Hewitt sued Habana over her istered nurses in half. Budgets for nurs- fected by feces. mother’s death, for example, she found that ing supplies, resident activities, and Habana is one of thousands of nursing its owners and managers had spread control other services were also cut. Investor homes across the nation that large Wall of Habana among 15 companies and five lay- Street investment companies have bought or ers of firms. profits soared and resident care plum- agreed to acquire in recent years. As a result, Mrs. Hewitt’s lawyer, like meted. Indeed, visits by regulators Those investors include prominent private many others confronting privately owned found fire exits that didn’t work, dirty equity firms like Warburg Pincus and the homes, has been unable to establish defini- kitchens, and other health and safety Carlyle Group, better known for buying com- tively who was responsible for her mother’s violations. Fifteen residents died in 3 panies like Dunkin’ Donuts. care. years due to negligent care, according As such investors have acquired nursing Current staff members at Habana declined to their families. homes, they have often reduced costs, in- to comment. Formation Properties I said it creased profits and quickly resold facilities owned only Habana’s real estate and leased Our elderly and disabled nursing for significant gains. it to an independent company, and thus bore home residents our own grandparents, But by many regulatory benchmarks, resi- no responsibility for resident care. mothers, fathers, and other loved ones dents at those nursing homes are worse off, That independent company—Florida deserve better. on average, than they were under previous Health Care Properties, which eventually be- Is this a case of profits before care? owners, according to an analysis by The New came Epsilon Health Care Properties and Well, I am not sure. But I certainly in- York Times of data collected by government subleased the home’s operation to Tampa tend to look into it. I intend to inves- agencies from 2000 to 2006. Health Care Associates—is affiliated with Warburg Pincus, one of the world’s largest tigate allegations that some large in- The Times analysis shows that, as at Habana, managers at many other nursing private equity firms. Warburg Pincus, Flor- vestment firms are buying up nursing homes acquired by large private investors ida Health Care, Epsilon and Tampa Health homes across the country and are hurt- have cut expenses and staff, sometimes Care all declined to comment. ing quality of care. And as a result, below minimum legal requirements. DEMAND FOR NURSING HOMES achieving, as the New York Times said, Regulators say residents at these homes The graying of America has presented fi- ‘‘More profit and less nursing.’’ have suffered. At facilities owned by private nancial opportunities for all kinds of busi- And let’s not forget that the Centers investment firms, residents on average have nesses. Nursing homes, which received more for Medicare and Medicaid Services fared more poorly than occupants of other than $75 billion last year from taxpayer pro- homes in common problems like depression, shoulder some responsibility for these grams like Medicare and Medicaid, offer loss of mobility and loss of ability to dress some of the biggest rewards. problems too CMS needs to do a better and bathe themselves, according to data col- ‘‘There’s essentially unlimited consumer job of protecting seniors in our Na- lected by the Centers for Medicare and Med- demand as the baby boomers age,’’ said Ron- tion’s nursing homes and I am going icaid Services. ald E. Silva, president and chief executive of follow up with them to see what they The typical nursing home acquired by a Fillmore Capital Partners, which paid $1.8 have to say. large investment company before 2006 scored billion last year to buy one of the nation’s So I say to my fellow Senators, we worse than national rates in 12 of 14 indica- largest nursing home chains. ‘‘I’ve never tors that regulators use to track ailments of must do what is necessary to protect seen a surer bet.’’ long-term residents. Those ailments include For years, investors shunned nursing home America’s nursing home residents. We bedsores and easily preventable infections, companies as the industry was battered by need to closely examine this matter. I as well as the need to be restrained. Before bankruptcies, expensive lawsuits and regu- plan to take a very active role in look- they were acquired by private investors, latory investigations. ing at this issue and will be speaking many of those homes scored at or above na- But in recent years, large private invest- with nursing homes, equity firms, and tional averages in similar measurements. ment groups have agreed to buy 6 of the na- to CMS. We owe it to America’s nurs- In the past, residents’ families often re- tion’s 10 largest nursing home chains, con- ing home residents and we owe it to sponded to such declines in care by suing, taining over 141,000 beds, or 9 percent of the and regulators levied heavy fines against nation’s total. Private investment groups their families. nursing home chains where understaffing led own at least another 60,000 beds at smaller Mr. President, I ask unanimous con- to lapses in care. chains and are expected to acquire many sent to have printed in the RECORD the But private investment companies have more companies as firms come under share- article to which I referrd earlier. made it very difficult for plaintiffs to suc- holder pressure to sell.

VerDate Aug 31 2005 03:34 Nov 30, 2007 Jkt 059060 PO 00000 Frm 00074 Fmt 0624 Sfmt 0634 J:\CRONLINE\2007BA~1\2007NE~2\S03OC7.REC S03OC7 mmaher on MIKETEMP with CONG-REC-ONLINE October 3, 2007 CONGRESSIONAL RECORD — SENATE S12527 The typical large chain owned by an in- lected before its acquisition, The Times’s ‘‘Formation Properties owns real estate vestment company in 2005 earned $1,700 a analysis was not a complete portrayal of cur- and leases it to an unaffiliated third party resident, according to reports filed by the fa- rent conditions. That executive, Jack Mac- that obtains a license to operate it as a cilities. Those homes, on average, were 41 Donald, also said that it was too early to health care facility,’’ Formation said. ‘‘No percent more profitable than the average fa- evaluate the new management, that the staff citation would mention Formation Prop- cility. numbers at homes over all was rising and erties since it has no involvement or control But, as in the case of Habana, cutting costs that quality had improved by some meas- over the operations at the facility or any en- has become an issue at homes owned by large ures. tity that is involved in such operations.’’ investment groups. ‘‘We are focused on becoming a better or- For Mrs. Hewitt’s mother, problems began ‘‘The first thing owners do is lay off nurses ganization today than we were 18 months within months of moving in as she suffered and other staff that are essential to keeping ago,’’ he said. ‘‘We are confident that we will repeated falls. patients safe,’’ said Charlene Harrington, a be an even better organization in the fu- ‘‘I would call and call and call them to professor at the University of California in ture.’’ come to her room to change her diaper or San Francisco who studies nursing homes. In A WEB OF RESPONSIBILITY help me move her, but they would never her opinion, she added, ‘‘chains have made a Vivian Hewitt’s mother, Alice Garcia, was come,’’ Mrs. Hewitt recalled. lot of money by cutting nurses, but it’s at 81 and suffering from Alzheimer’s disease Five months later, Mrs. Hewitt discovered the cost of human lives.’’ when, in late 2002, she moved into Habana. that her mother had a large bedsore on her The Times’s analysis of records collected ‘‘I couldn’t take care of her properly any- back that was oozing pus. Mrs. Garcia was by the Centers for Medicare and Medicaid more, and Habana seemed like a really nice rushed to the hospital. A physician later said Services reveals that at 60 percent of homes place,’’ Mrs. Hewitt said. the wound should have been detected much bought by large private equity groups from Earlier that year, Formation bought earlier, according to medical records sub- 2000 to 2006, managers have cut the number Habana, 48 other nursing homes and four as- mitted as part of a lawsuit Mrs. Hewitt filed of clinical registered nurses, sometimes far sisted living centers from Beverly Enter- in a Florida Circuit Court. below levels required by law. (At 19 percent prises, one of the nation’s largest chains, for Three weeks later, Mrs. Garcia died. of those homes, staffing has remained rel- $165 million. ‘‘I feel so guilty,’’ Mrs. Hewitt said. ‘‘But atively constant, though often below na- Formation immediately leased many of there was no way for me to find out how bad tional averages. At 21 percent, staffing rose the homes, including Habana, to an affiliate that place really was.’’ significantly, though even those homes were of Warburg Pincus. That firm spread man- DEATH AND A LAWSUIT typically below national averages.) During agement of the homes among dozens of other Within a few months, Mrs. Hewitt decided that period, staffing at many of the nation’s corporations, according to documents filed to sue the nursing home. other homes has fallen much less or grown. with Florida agencies and depositions from ‘‘The only way I can send a message is to Nurses are often residents’ primary med- lawsuits. hit them in their pocketbook, to make it too ical providers. In 2002, the Department of Each home was operated by a separate expensive to let people like my mother suf- Health and Human Services said most nurs- company. Other companies helped choose fer,’’ she said. ing home residents needed at least 1.3 hours staff, keep the books and negotiate for equip- But when Mrs. Hewitt’s lawyer, Sumeet of care a day from a registered or licensed ment and supplies. Some companies had no Kaul, began investigating Habana’s cor- practical nurse. The average home was close employees or offices, which let executives porate structure, he discovered that its com- to meeting that standard last year, accord- file regulatory documents without revealing plexity meant that even if she prevailed in ing to data. their other corporate affiliations. But homes owned by large investment Habana’s managers increased occupancy, court, the investors’ wallets would likely be companies typically provided only one hour and cut expenses by laying off about 10 of 30 out of reach. of care a day, according to The Times’s anal- clinical administrators and nurses, Medicare Others had tried and failed. In response to ysis of records collected by the Centers for filings reveal. (After regulators complained, dozens of lawsuits, Formation and affiliates Medicare and Medicaid Services. some positions were refilled and other spend- of Warburg Pincus had successfully argued in For the most highly trained nurses, staff- ing increased.) Soon, Medicare regulators court that they were not nursing home oper- ing was particularly low: Homes owned by cited Habana for malfunctioning fire doors ators, and thus not liable for deficiencies in large private investment firms provided one and moldy air vents. care. clinical registered nurse for every 20 resi- Throughout that period, Formation and Formation said in a statement that it was dents, 35 percent below the national average, the Warburg Pincus affiliate received rent not reasonable to hold the company respon- the analysis showed. and fees that were directly tied to Habana’s sible for residents, ‘‘any more, say, than it Regulators with state and federal health revenues, interviews and regulatory filings would be reasonable for a landlord who owns care agencies have cited those staffing defi- show. As the home’s fiscal health improved, a building, one of whose tenants is ciencies alongside some cases where resi- those payments grew. In total, they exceeded Starbucks, to be held liable if a Starbucks dents died from accidental suffocation, inju- $3.5 million by last year. The companies also customer is scalded by a cup of hot coffee.’’ ries or other medical emergencies. profited from the other 48 homes. Formation, Warburg Pincus and its affili- Federal and state regulators also said in Though spending cuts improved the home’s ates all declined to answer questions regard- interviews that such cuts help explain why bottom line, they raised concerns among reg- ing Mrs. Hewitt’s lawsuit. serious quality-of-care deficiencies—like ulators and staff. Advocates for nursing home reforms say moldy food and the restraining of residents ‘‘Those owners wouldn’t let us hire peo- anyone who profits from a facility should be for long periods or the administration of ple,’’ said Annie Thornton, who became in- held accountable for its care. wrong medications—rose at every large nurs- terim director of nursing around the time ‘‘Private equity is buying up this industry ing home chain after it was acquired by a Habana was acquired, and who left about a and then hiding the assets,’’ said Toby S. private investment group from 2000 to 2006, year later. ‘‘We told the higher-ups we need- Edelman, a nursing home expert with the even as citations declined at many other ed more staffing, but they said we should Center for Medicare Advocacy, a nonprofit homes and chains. make do.’’ group that counsels people on Medicare. The typical number of serious health defi- Regulators typically visit nursing homes ‘‘And now residents are dying, and there is ciencies cited by regulators last year was al- about once a year. But in the 12 months after little the courts or regulators can do.’’ most 19 percent higher at homes owned by Formation’s acquisition of Habana, they vis- Mrs. Hewitt’s lawyer has spent three years large investment companies than the na- ited an average of once a month, often in re- and $30,000 trying to prove that an affiliate tional average, according to analysis of Cen- sponse to residents’ complaints. The home of Warburg Pincus might be responsible for ters for Medicare and Medicaid Services was cited for failing to follow doctors’ or- Mrs. Garcia’s care. He has not named Forma- records. ders, cutting staff below legal minimums, tion or Warburg Pincus as defendants. A (The Times’s analysis of trends did not in- blocking emergency exits, storing food in judge is expected to rule on some of his argu- clude Genesis HealthCare, which was ac- unhygienic areas and other health viola- ments this year. quired earlier this year, or HCR Manor Care, tions. Complex corporate structures have dis- which the Carlyle Group is buying, because Soon after, nursing home inspectors wrote suaded scores of other lawyers from suing sufficient data were not available.) in Centers for Medicare and Medicaid Serv- nursing homes. Representatives of all the investment ices documents that Habana was at fault About 70 percent of lawyers who once sued groups that bought nursing home chains when a resident suffocated because his tra- homes have stopped because the cases be- since 2000—Warburg Pincus, Formation, Na- cheotomy tube became clogged. Although he came too expensive or difficult, estimates tional Senior Care, Fillmore Capital Part- had complained of shortness of breath, there Nathan P. Carter, a plaintiffs’ lawyer in ners and the Carlyle Group—were offered the were no records showing that staff had Florida. data and findings from the Times analysis. checked on him for almost two days. ‘‘In one case, I had to sue 22 different com- All but one declined to comment. Those citations never mentioned Forma- panies,’’ he said. ‘‘In another, I got a $400,000 An executive with a company owned by tion, Warburg Pincus or its affiliates. War- verdict and ended up collecting only $25,000.’’ Fillmore Capital, which acquired 342 homes burg Pincus and its affiliates declined to dis- Regulators have also been stymied. last year, said that because some data re- cuss the citations. Formation said it was For instance, Florida’s Agency for Health garding the company were missing or col- merely a landlord. Care Administration has named Habana and

VerDate Aug 31 2005 03:34 Nov 30, 2007 Jkt 059060 PO 00000 Frm 00075 Fmt 0624 Sfmt 0634 J:\CRONLINE\2007BA~1\2007NE~2\S03OC7.REC S03OC7 mmaher on MIKETEMP with CONG-REC-ONLINE S12528 CONGRESSIONAL RECORD — SENATE October 3, 2007 34 other homes owned by Formation and op- If investors are barred from setting up she is alone, there will be no help from oth- erated by affiliates of Warburg Pincus as complex structures, ‘‘this industry makes no ers; resistance is useless and only makes among the state’s worst in categories like economic sense,’’ Mr. Whitman said. ‘‘If things worse. ‘‘nutrition and hydration,’’ ‘‘restraints and nursing home owners are forced to operate at That’s the kind of control Fidel Castro, abuse’’ and ‘‘quality of care.’’ Those homes a loss, the entire industry will disappear.’’ and now his brother Rau´ l, exercise in Cuba. have been individually cited for violations of However, advocates for nursing home re- There, everything comes from Castro and safety codes, but there have been no forms say investors exaggerate the indus- his government. The regime wants the Cuban chainwide investigations or fines, because try’s precariousness. Last year, Formation people to believe they have no other friends. regulators were unaware that all the facili- sold Habana and 185 other facilities to Gen- And, alas, even foreign diplomats and their ties were owned and operated by a common eral Electric for $1.4 billion. A prominent dependents stationed in Havana begin after group, said Molly McKinstry, bureau chief nursing home industry analyst, Steve Mon- time to feel this intimidating dependency for long-term-care services at Florida’s roe, estimates that Formation’s and its co- and to become reluctant to protest outrages directed at them because ‘‘it only results in Agency for Health Care Administration. investors’ gains from that sale were more more abuse.’’ And even when regulators do issue fines to than $500 million in just four years. Forma- Castro’s abuse—his ability to order win- investor-owned homes, they have found pen- tion declined to comment on that figure. dows smashed or call out street demonstra- alties difficult to collect. ANALYZING THE DATA tions—becomes ‘‘revenge’’ for inviting unap- ‘‘These companies leave the nursing home For this article, The New York Times ana- proved Cuban guests to the embassy, for licensee with no assets, and so there is noth- lyzed trends at nursing homes purchased by reaching out to engage ordinary Cubans in ing to take,’’ said Scott Johnson, special as- private investment groups by examining ways not preapproved by Castro’s govern- sistant attorney general of Mississippi. data available from the Centers for Medicare ment. Government authorities are also fre- Foreign observers in Cuba seem to have quently unaware when nursing homes pay and Medicaid Services, a division of the De- partment of Health and Human Services. great difficulty imagining what the regime large fees to affiliates. will do next. One reason why is that they For example, Habana, operated by a War- The Times examined more than 1,200 nurs- ing homes purchased by large private invest- keep looking for logical reasons to explain burg Pincus affiliate, paid other Warburg the regime’s actions. Yet the reality is that Pincus affiliates an estimated $558,000 for ment groups since 2000, and more than 14,000 other homes. The analysis compared inves- much of what has happened in Cuba over the management advice and other services last last 50 years cannot be explained, except as year, according to reports the home filed. tor-owned homes against national averages in multiple categories, including complaints the whim of a man whose only goal is to be Government programs require nursing in control of everything Cuban. Castro has a homes to reveal when they pay affiliates so received by regulators, health and safety vio- lations cited by regulators, fines levied by lot in common with Stalin. that such disbursements can be scrutinized The Castro regime simply deems any inde- state and federal authorities, the perform- to make sure they are not artificially in- pendent action—however small—to be a chal- ance of homes as reported in a national data- flated. lenge to its totalitarian control. Thus, invit- However, complex corporate structures base known as the Minimum Data Set Repos- ing Cuba’s political dissidents to an embassy make such scrutiny difficult. Regulators did itory and the performance of homes as re- event is ‘‘a hostile act.’’ To give a short- not know that so many of Habana’s pay- ported in the Online Survey, Certification wave radio to a Cuban national is, curiously ments went to companies affiliated with and Reporting database. enough, ‘‘a violation of human rights.’’ Any Warburg Pincus. f Cuban daring to voice support for change in ‘‘The government tries to make sure Cuba is ‘‘a paid agent’’ of the United States. homes are paying a fair market value for CUBA What to do in a situation such as this? The things like rent and consulting and sup- Mr. COLEMAN. Mr. President, I principle that should guide foreign govern- plies,’’ said John Villegas-Grubbs, a Med- would like to take the opportunity to ments is that they should show Cubans that they have friends on the outside. icaid expert who has developed payment sys- submit for the RECORD an article pub- Foreign governments can start by, at the tems for several states. ‘‘But when home lished today in the Miami Herald re- owners pay themselves without revealing it, very least, always insisting on reciprocity in they can pad their bills. It’s not feasible to garding the situation in Cuba. The ar- the freedom allowed Castro’s diplomats and expect regulators to catch that unless they ticle captures the situation imposed on embassies to operate in their capitals. This have transparency on ownership structures.’’ the Cuban people by the authoritarian is not what happened. Foreign missions— Formation and Warburg Pincus both de- rule of the Castro brothers, as well as America’s among them—accede to Castro’s clined to discuss disclosure issues. challenges the international commu- restrictions on how their diplomats and em- Groups lobbying to increase transparency bassies function in Cuba. nity to stand firm in its commitment Cuba’s diplomats take full advantage of at nursing homes say complicated corporate to true democratic change in Cuba. For structures should be outlawed. One idea pop- their freedoms in the U.S. capital. They at- decades Fidel Castro, and now his tend congressional hearings, have access to ular among organizations like the National the American media, develop relationships Citizens’ Coalition for Nursing Home Reform brother Rau´ l, have deprived the Cuban with businessmen and ‘‘progressive’’ activ- is requiring the company that owns a home’s people of freedom and the hope of a ists, host student groups, speak at univer- most valuable assets, its land and building, better future. It is clear that Cuba sities and enjoy tax-exempt status. Yet U.S. to manage it. That would put owners at risk finds itself in a time of transition, yet diplomats in Cuba have no similar privileges if care declines. surely the Castro brothers will do ev- in Havana. They are subject to petty harass- But owners say that tying a home’s prop- erything in their power to ensure that ments. The Cuban government goes so far as erty to its operation would make it impos- the system of repression that they to detain shipping containers of supplies sent sible to operate in leased facilities, and exac- to the U.S. Interests Section in Cuba and has erbate a growing nationwide nursing home have built up for the past half century will remain in place whenever Fidel broken into the U.S. diplomatic pouch. shortage. Attempting to appease Cuba’s kidnappers Moreover, investors say, they deserve cred- Castro passes away. For this reason, it will backfire, as it always has. It is instruc- it for rebuilding an industry on the edge of is incumbent on all of us who aspire for tive that the refugee crises in 1980 and 1994, widespread insolvency. a free and democratic Cuba to ensure which involved 125,000 and 30,000 Cubans re- ‘‘Legal and regulatory costs were killing that this moment of opportunity for spectively, and the 1996 murder of Brothers this industry,’’ said Mr. Whitman, the For- democratic change on the island is not to the Rescue crews over the Florida Straits mation executive. occurred at times when Washington actually For instance, Beverly Enterprises, which lost. I ask unanimous consent to have the was trying to improve relations. also had a history of regulatory problems, Eventually, Cuba’s long nightmare will sold Habana and the rest of its Florida cen- following article printed in the end. If governments around the world would ters to Formation because, it said at the RECORD. also shake free of ‘‘the Havana Syndrome,’’ time, of rising litigation costs. AON Risk There being no objcection, the mate- they might hasten Cuba’s democratic awak- Consultants, a research company, says the rial was ordered to be printed in the ening. average cost of nursing home litigation in RECORD, as follows: Fidel and Rau´ l Castro will attempt to turn Florida during that period had increased 270 their day of reckoning into a negotiation APPEASING THE CASTROS WILL BACKFIRE percent in five years. with Washington—a negotiation excluding ‘‘Lawyers were suing nursing homes be- (By Frank Calzon) dissidents and exiles. Yet it is Cubans who cause they knew the companies were worth The ‘‘Stockholm syndrome’’ describes the must decide the fate of Cuba. All evidence billions of dollars, so we made the companies phenomenon of hostages who identify, co- indicates that President Bush will remain smaller and poorer, and the lawsuits have di- operate with and, finally, defend their kid- firm. If the Department of State does not minished,’’ Mr. Whitman said. This year, an- nappers. The longer they are held, the more flinch, Cuba’s interim president and new other fund affiliated with Mr. Whitman and victims are likely to be affected by the syn- leaders will have to talk with and listen to other investors acquired the nation’s third- drome, because they are totally dependent their political opponents. That is what de- largest nursing home chain, Genesis on their abusers. The control over every as- mocracy means and that is what the world HealthCare, for $1.5 billion. pect of life convinces the victim that he or community should boldly support today.

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