Petition Before UMC to Censure James Holsinger

Jim Burroway

April 27th, 2008

When last we heard from Dr. James Holsinger, President George Bush’s Surgeon General Nominee, it looked like his nomination was stuck in limbo. This came after Box Turtle Bulletin examined Holsinger’s 1991 white paper for the United Methodist Church’s Committee to Study Homosexuality, a paper which significantly misrepresented the bibliographic sources that he cited.

I forwarded a copy of our findings to several Senators on the Senate Health, Education, Labor and Pensions Committee which held hearings on Holsinger’s nomination. Coincidentally or not, some of our findings appeared to make their way into the hearing. Needless to say, things did not go very well for Dr. Holsinger.

Since then, allegations have arisen of Dr. Holsinger’s possibly questionable financial dealings and conflicts of interest involving grants to the University of Kentucky’s Chandler Medical Center (while Holsinger was its Chancellor) from the Good Samaritan Foundation (while Holsinger was a trustee of the GSF board). According to these allegations, the grants were drawn from $20 million earned from the 1995 sale of the United Methodist Good Samaritan Hospital in Lexington, Kentucky, to a for-profit corporation. According to complaints, the hospital was the property of the Kentucky Annual Conference of the United Methodist Church, and GSF should have handed the money over to the church.

The United Methodist is currently meeting in Fort Worth, and among the business before its various committees is a petition to censure Dr. Holsinger for his involvement in the Good Samaritan Hospital sale. The petition was submitted by Rev. Andrew Weaver, Ph.D. of Brooklyn, NY, and will go before the Judicial Administration Committee.

I spoke with Rev. Weaver over the phone, and he acknowledged that if Holsinger was censured, it would be a very unusual event in the church. He also pointed out that the allegations against Holsinger were also unusual, going against the “trust clause” which he described as being an important part of UMC property governance going back to the days of John Wesley himself, who set up the system of trustees for the governance of chapels and organizations. According to Rev. Weaver, Dr. Holsinger’s actions on the GSF board were contrary to these principles.

Here is the full text of the petition:

Whereas, James W. Holsinger, MD, was elected to our church’s Judicial Council in May, 2000, and has been president of the Judicial Council since 2004, and

Whereas, the duties of the Judicial Council include “determining the legality of any action taken by any body created by or authorized by the General Conference” and the General Conference has therefore recognized as a matter of critical importance that members of the Judicial Council avoid conflicts of interest, as illustrated by the prohibition on service on other boards and agencies of the church, and

Whereas, following election to the Judicial Council in May 2000, Dr. Holsinger joined the board of trustees of the Good Samaritan Foundation (GSF) of Lexington, Kentucky, in July 2000, knowing that GSF had, three months earlier, in May 2000, become the subject of litigation by the Kentucky Conference of the United Methodist Church, and

Whereas, two former members of the Judicial Council who worked with Holsinger from 2000-2004, Sally C. Askew, Esq., and Sally B. Geis, Ph.D., stated that Holsinger never mentioned having joined an organization that was being sued by a constituent body of the United Methodist Church, nor did he at any time address possible conflicts of interest involved in being a member of the UMC’s Judicial Council while engaged in significant litigation against the UMC, and

Whereas the essence of the lawsuit between the Kentucky Annual Conference and the Good Samaritan Foundation related to church property ownership issues, and the Court found there was an “express trust” on behalf of the United Methodist Church, based on the surrounding facts and circumstances, and safeguarding property trust being a central duty for United Methodist leaders to protect, and a topic of Judicial Council decisions, and

Whereas, the GSF trustees which Dr. Holsinger, member and subsequently chair of the Judicial Council, joined, and of which he became chair in 2003, were in violation of their fiduciary responsibilities as trustees of United Methodist hospital property in the amount of $20 million realized from the sale in 1995 of 330 bed United Methodist Good Samaritan Hospital in Lexington, Kentucky, to a for-profit corporation, and which trustees refused to hand over the proceeds to the rightful owners, the Kentucky Annual Conference (KAC) of the UMC, and

Whereas, according to court records, the foundation’s trustees refused to tell the KAC what happened to the $20 million from the sale of the UMC hospital for nearly five years and as late as June of 2006 the lay and clergy members of the KAC felt compelled to pass a resolution formally seeking necessary “[i]nformation on assets, income earned, tax issues…investment practices, conflicts of interest, and other information” from the foundation, and

Whereas, despite his Judicial Council responsibilities as one of the highest elected officials of the United Methodist Church, and in apparent ignorance of Methodism’s commitment to building dozens of hospitals in the late 19th and early 20th centuries to provide care for the poor and indigent Dr. Holsinger in a letter to GSF grantees questioned the motives and integrity of the UMC, publicly stating his belief that the UMC was “only interested in the Foundation’s money, not its cause” [health care for the poor and disadvantaged], and

Whereas, Dr. Holsinger was not a bystander in these events, but the dominant personality among the trustees and the driving force in the prolongation of the lawsuit, as evidenced by the lawsuit’s rapid conclusion two weeks after Dr. Holsinger’s resignation from the trustees in May, 2007, and

Whereas, during the period of this litigation, Dr. Holsinger was affiliated with the University of Kentucky as Chancellor of the Chandler Medical Center from 1994-2003, and the University of Kentucky’s programs in medicine, nursing, dentistry and public health were awarded 63% of $8,430,363 in grants awarded by GSF from July 1, 1997 through June 30, 2006 including the endowment of two academic chairs valued at a million dollars each, despite GSF’s own policies that, “[major organizations” such as “[h]ospitals, [c]olleges and [u]niversities are not eligible as a general statement,” although exceptions could be made by the trustees, and

Whereas during the time Dr. Holsinger was chair of the GSF trustees, additional conflicts of interest were permitted by other trustees, as admitted by GSF in a May 23, 2005 letter to the Kentucky Annual Conference namely that three GSF trustees who worked at Lexington-area financial institutions were involved in managing or had previously managed the assets of the foundation while serving on the board., and
Whereas the Kentucky Annual Conference told the GSF that it was “unconscionable” that after a decade this gross conflict of interest continued and that the funds were still not being professionally managed by experts with no personal relationship to the board putting Dr. Holsinger in violation of the standards of ethics set by the UMC for trustees of church organizations, and in gross violation of the basic tenets of accepted ethical conduct , and

Whereas, the litigation by GSF against the United Methodist Church, much of it under Judicial Council president Holsinger’s tenure squandered $1,083,133 in legal fees from July 1, 1997 through July 1, 2006, which Dr. Holsinger had a duty to protect for the benefit of GSF’s beneficiaries,
Therefore, the General Conference of the United Methodist Church:

1. Censures Dr. James Holsinger for conduct which we consider to be in grave conflict with his duties as member and president of the Judicial Council, conduct which has dissipated United Methodist resources, which has brought disrepute to the church, and which constitute “relationships and/or behavior that undermine the ministry” of United Methodists;

2. Calls for heightened commitment by all Judicial Council members to ethical standards of conduct, especially regarding conflicts of interest, for full disclosure of pre-existing potential conflicts of interest and for commitment not to enter into new responsibilities after election to the Judicial Council which may conflict with their Judicial Council duties;

3. Calls for all Boards of United Methodist affiliated institutions and agencies to review their by-laws, affiliations and legal documents to assure compliance with Disciplinary paragraphs 2501, 2503, and 2506 and to minimize the potential for conflicts such as KAC V. GSF;

4. Calls for the Judicial Council newly elected in 2008 to review all Judicial Council decisions during the time of Dr. Holsinger’s tenure, recognizing that such decisions are final, but nevertheless reporting to the General Church its findings as to whether any decisions now appear questionable in light of Dr. Holsinger’s conflicts of interest and his litigation against the United Methodist Church while serving as a high elected official.

andrew weaver

April 28th, 2008


Judicial Council Chief James Holsinger and $20 million of UMC Money
by Rev. Andrew J. Weaver, Ph.D., and Lawrence H. McGaughey, Esq.

Dr. James Holsinger, principal of the UMC Judicial Council has been a major player in a contentious and controversial lawsuit involving UMC money. The litigation involved the sale in 1995 of a United Methodist Church (UMC) hospital in Lexington, Kentucky, and the disposition of the $20 million in proceeds. The hospital’s trustees refused to hand over the assets to the owner, the UMC in Kentucky. Instead, the self-appointed trustees, calling themselves the Good Samaritan Foundation (GSF) placed the funds under their sole control and withheld the money from the church for five years. The Kentucky Annual Conference commenced a lawsuit against GSF which then cross-sued the General Board of Global Ministries (GBGM) bringing them into the case. The two church organizations were forced to engage in a long and costly lawsuit to find out where the money was and to regain its property for the Annual Conference. Holsinger became a GSF trustee in July 2000, joining in the lawsuit against his own church.

According to several individuals intimately acquainted with the litigation, Holsinger actually became the driving force in the prolongation of the lawsuit. Shortly after GSF lost in court for the second time in 2006, Holsinger stated that the GSF trustees, which he chaired, would persist in its legal battle. In a stunning denunciation of his own church, Holsinger publicly stated his personal belief that the UMC was “only interested in the Foundation’s money, not its cause” [health care for the poor and disadvantaged]. It was only when Holsinger was named as Surgeon General that the litigation came to an abrupt halt. Within a matter of days after his May 24, 2007, nomination, Holsinger resigned from the GSF trustees and the lawsuit, indicating that to continue would be incompatible with an appointment as Surgeon General. Within a mere two weeks, the suit was finally settled — after over seven years!

What might have motivated Holsinger to be a part of long, costly litigation against his own church? Following the money offers insight. From July 1997, through June 2006, the GSF and a corporate subsidiary dispersed $8,430,363 in grants — of which $5,314,670 (63 percent) was given to University of Kentucky (UK) programs in medicine, nursing, dentistry, and public health. This included endowing two academic chairs valued at a million dollars each — one in nursing and the other in public health. These endowed chairs and several million in other gifts were awarded while Holsinger was fundraising for these UK programs in his job as Chancellor of the Chandler Medical Center of UK from 1994 through 2003. The grants continued to flow after he left the position of Chancellor, while he continued as a GSF trustee until May 2007.

The GSF’s contributions to UK medical and its related schools have been so significant that the foundation is listed on the highest tier of honored benefactors to the university, along with major corporations such as Alcoa, DuPont, IBM, and the RJ Reynolds Tobacco Company.

What makes the GSF awards to UK more remarkable is that they were awarded in contradiction to the foundation’s own standards of grant-making. According to the grant policy guidelines of the GSF, “[m]ajor organizations” such as “[h]ospitals, [c]olleges and [u]niversities are not eligible as a general statement,” although exceptions could be made by the trustees. The exception in this case became the rule when it came to UK.

In addition, for more than a decade the return on the investments of the foundation was dismal. In May, 2005, GSF admitted in a letter to making poor return on the assets and to conflicts of interest by some of the trustees. Three GSF trustees had been involved in managing the assets of GSF while serving on the board. The church representatives told the GSF that it was “unconscionable” that after a decade the funds were not being professionally managed by experts who had no personal connection with the board.
Did Holsinger ever inform his fellow members of the Judicial Council that he was involved in a lawsuit with the Kentucky Annual Conference and GBGM? Even more to the point, we are told by persons attending the 2004 General Conference that he did not disclose to the Conference his involvement in the lawsuit and his potential for conflicts of interest with the Kentucky Conference and GBGM if elected.

Rev. Andrew J. Weaver, Ph.D., is a United Methodist minister and research psychologist who has written extensively on the role of clergy in preventive mental health care. He lives in New York City. He has co-authored 14 books including: Counseling Survivors of Traumatic Events (Abingdon, 2003), Reflections on Grief and the Spiritual Journey (Abingdon, 2005), Counseling Persons with Addictions and Compulsions (Pilgrim, 2007), and Connected Spirits: Friends and Spiritual Journeys (Pilgrim, 2007).

Lawrence H. McGaughey, Esq., is an attorney practicing law in New York City with specialties in real estate, trusts and estates, and not-for-profit organizations. He has represented many United Methodist churches and organizations and is the Chancellor of the New York Annual Conference of the United Methodist Church. Any views stated in this article are personal and are not intended to represent the views of any client.

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