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Bingham Memorial reaches settlement over misused charitable assests

The Office of the State Attorney has resolved an investigation into allegations executives from a Blackfoot hospital misused charitable assets.

Attorney General Lawrence Wasden announced an agreement Monday with Bingham Memorial Hospital, Inc. that ends a three-year investigation and ensures its policies and procedures protect the nonprofit’s charitable assets. BMH also agreed to reimburse the Attorney General $50,000 for legal fees and investigative costs.

The investigation began in 2012 amid allegations BMH officials had misappropriated some charitable assets from 2009 through 2012, including the alleged misuse of hospital-issued credit cards.

“After an exhaustive investigation, I’m pleased we’ve reached an agreement that will bring about change and enhance the level of accountability at BMH,” Wasden said. “My hope now is that BMH and Idaho’s other nonprofit hospitals learn from this and understand just how seriously I take my duty to protect charitable trust assets.”

Under Idaho law, the Attorney General has the authority to investigate a nonprofit hospital suspected of diverting or wasting charitable assets. Although the Attorney General can file a lawsuit to recover assets, Wasden says the most productive approach is to work with the hospital to fix problems and bring about reform.

As part of the investigation, attorneys with the Consumer Protection Division and a fraud examiner pored over thousands of BMH records, credit card statements, receipts, reimbursement forms and travel and conference-related documents.

Investigators identified several issues, including the alleged unauthorized use of BMH charitable assets by International Consulting Services, a former for-profit company unrelated to BMH. Some BMH executives were associated with ICS.

Among his findings, the Attorney General cited the following concerns:

International Consulting Services allegedly used some charitable assets for its operations, and that the company had not reimbursed the hospital.
BMH allegedly failed to obtain timely records of the executives’ credit card charges.
BMH executives allegedly used charitable assets to buy some personal goods or services, but failed to produce valid documentation to warrant reimbursement to the hospital.

The settlement requires BMH to review its financial records and provide the Attorney General with a board resolution verifying that BMH received reimbursement or any unauthorized personal charges.

The BMH board has also agreed to review, and, if necessary, revise policies and procedures to prohibit the use of charitable assets for purposes that are not in the best interest of the hospital.

“I am pleased that BMH’s board has responded and taken steps to address the problems and concerns we cited in our investigation,” Attorney General Wasden said.

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