‘Revolving door’ probe limits former state health director in new job as CEO of Sinai Chicago

An ethics probe is constraining former Illinois Department of Public Health Director Dr. Ngozi Ezike in her new job as CEO of Sinai Chicago, one of the city’s largest hospital chains serving poor neighborhoods and Medicaid patients.

The Illinois Office of Executive Inspector General is investigating whether Ezike violated state law when she took the job at Sinai in June. A so-called “revolving door prohibition” bars high-ranking state officials from accepting compensation or employment from a private organization for a one-year period if the official oversaw a government agency that made decisions affecting the private organization or awarded it $25,000 or more in state contracts.

Ezike joined Sinai just three months after stepping down as head of IDPH. A Better Government Association investigation earlier this year showed that IDPH, under Ezike’s tenure, awarded Sinai $2.16 million in grants labeled “contracts” during the year preceding her departure.

Ezike’s case could test the effectiveness of the ban, which is designed to prevent public officials from favoring private entities in hopes of landing lucrative future employment. If she’s found to have broken the law but retains her Sinai post and pays only a modest fine, some will conclude the law is toothless, experts say.

“This is the sort of case that these provisions were created to cover,” says Jay Young, executive director at Common Cause Illinois, which has advocated for a two-year-long revolving door ban. Arguing that the “prohibitions clearly applied to her,” he says the case “is suggesting flaws in the system.”

Ezike declined to answer questions about the investigation. Her attorney, Heather Wier Vaught, did not respond to requests for comment. Previously, Vaught defended Ezike to the BGA, contending the grants IDPH awarded Sinai did not qualify as contracts under the revolving door ban and pointing out that Ezike’s legal advisers told her joining Sinai was acceptable under the law.

The OEIG also declined to comment. But if it concludes that Ezike violated the ban and refers the matter to the Illinois attorney general and the Executive Ethics Commission, she could face a fine of up to three times her annual salary. Ezike’s salary hasn’t been disclosed, but her predecessor was paid $1.05 million in 2020, Sinai’s most recent annual filing with the Internal Revenue Service shows.

In a separate revolving door case, Barry Maram, former director of Illinois’ Department of Healthcare and Family Services, was accused of violating the ban when he went to work for a law firm that had contracts involving his state agency. In 2014, Maram agreed to pay the state $100,000 in a settlement, without admitting wrongdoing or liability. Maram declined to comment on his case.

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Mark Doyle, a former Illinois Department of Human Services employee, was ordered to pay a $154,056 fine for violating the revolving door prohibition when he performed consulting work for a firm that IDHS contracted with. The fine was equal to the payment Doyle received in consulting fees before expenses and taxes.

Doyle appealed to the Kane County Circuit Court, which reversed the Ethics Commission ruling. But an Illinois appellate court overturned the circuit court’s decision, and the U.S. Supreme Court declined to hear Doyle’s appeal.

“The problem is, the statute isn’t clear,” said Doyle, who has not admitted any wrongdoing. “I feel for (Ezike) because I’m sure they’re playing games with her, too.”

Though the Ethics Commission can levy fines on violators, it can’t force a violator to leave the job at issue.

“Their enforcement powers are somewhat limited,” says Northwestern University law professor Juliet Sorensen, a former member of the Cook County Board of Ethics. “If the person has already taken the job, to some extent, the damage is already done.”

Sinai spokesman Dan Regan declined to answer questions about the ethics investigation, Sinai’s finances or how the investigation affects Ezike’s role as CEO. In a written statement, he said Sinai and Ezike carry out their duties “in compliance with all city, county, state, and federal laws, rules, and regulations.”

Ezike has been advised not to negotiate or sign contracts with state agencies while the investigation is pending, a source familiar with the matter says, putting some typical activities for a hospital CEO off-limits. Those duties are currently being handled elsewhere within Sinai.

If Ezike is found to have violated the revolving door ban, any contracts she might sign on Sinai’s behalf may be invalid, says Ricardo Meza, former Illinois executive inspector general and now managing partner at Meza Law.

“If somebody doesn’t have authority to hold a position, they don’t have authority to execute contracts on behalf of somebody,” Meza says.

The limits on Ezike come at a time of severe financial strain for hospitals, as federal COVID-19 relief funding dwindles and inflation drives up costs. A new report from Kaufman Hall & Associates and the American Hospital Association shows that more than half of U.S. hospitals are expected to lose money this year.

The situation is particularly acute for safety-net hospitals like Sinai. Safety-nets predominantly serve patients on Medicaid and Medicare, which typically pay hospitals less than private insurers.

“They really have a very small margin of error,” says Duane Fitch, a partner at accounting firm Plante Moran, who has worked with safety-net hospitals in Chicago. “They don’t have the big balance sheets like some other organizations that can help them through some of the difficult times.”

Nearly 60% of Sinai’s patients are on Medicaid, Ezike told Health News Illinois recently. That makes the hospital heavily dependent on state health agencies that dole out Medicaid dollars. Ezike’s familiarity with those agencies is likely why she was a top choice for the CEO role at Sinai, Young of Common Cause Illinois says.

As head of IDPH for three years, Ezike became one of the state’s most familiar faces, appearing regularly beside Gov. J.B. Pritzker to give Illinoisans health guidance during the worst of the pandemic.

“Of course, you want the former, extremely visible head of a state agency that you deal with on a daily basis,” Young says.

Sinai board chair Vincent Williams did not respond to requests for comment. But in a press release announcing Ezike’s appointment in April, Williams said: “After an extensive selection process, we are confident Dr. Ezike has the vision and dedication to lead Sinai Chicago into its next century of service.”

The decision to hire Ezike for such an important role despite the revolving door ban raises questions about the board’s judgment, says Kent Redfield, a professor emeritus in the department of political science at the University of Illinois Springfield and former legislative analyst for the Illinois General Assembly.

“I am perplexed as to why this did not raise red flags with the hospital,” Redfield says. “Why would you allow this?”

This story first appeared in our sister publication, Crain’s Chicago Business.