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Report: Cancer center can use fundraiser for operating costs

New Hampshire Union Leader

February 07. 2017 7:12PM

Dartmouth-Hitchcock’s Norris Cotton Cancer Center properly used $6.1 million raised for cancer research, a state regulator has ruled, in a dispute that led its former director to file a whistleblower lawsuit.

Thomas Donovan, head of the state Justice Department’s Charitable Trusts Unit, said the fundraising dollars, including money from the center’s signature fundraiser, The Prouty, were directed to be used for the cancer center’s benefit. The review did not find language restricting the gift from being used for the center’s operations, according to Donovan.

“Based upon the materials we reviewed and the applicable accounting and legal standards, D-H had no choice but to reclassify as unrestricted the $6.1 million of accumulated temporarily restricted funds, including The Prouty funds,” Donovan wrote.

“As a result, D-H properly used that $6.1 million for 2015 expenditures consistent with any purpose restrictions applicable to their use,” Donovan said in an eight-page letter.

Donovan said the charitable trusts unit would take no further action.

Dr. Mark Israel of Hanover, who headed the cancer center for 14 years and says he was forced out after questioning the shift in funds, filed a lawsuit in October against several Dartmouth-Hitchcock entities.

He is requesting D-H return the $6 million to the cancer center’s philanthropic accounts and to award him back wages, compensatory damages and/or restitution totaling more than $2 million, plus attorneys’ fees and costs.

D-H’s attorney, Don Schroeder, and Israel’s attorney, Geoffrey Vitt, couldn’t immediately be reached for comment Tuesday to address how Donovan’s letter might affect Israel’s lawsuit.

Jim Weinstein, CEO and president of Dartmouth-Hitchcock, addressed Donovan’s letter in a memo to staff on Friday, saying he lost his 12-year-old daughter to cancer 20 years ago and feels the pain of loss every day.

“So it is critical to me, on a number of levels, that Dartmouth-Hitchcock steadfastly honor donor intent with respect to Cancer Center funds,” Weinstein wrote. “We will continue to ensure that our donors’ funds are used as our donors intend, and in compliance with applicable legal and accounting requirements.”

Donovan’s letter said his determination “does not mean that D-H handled its temporarily restricted funds accounts perfectly,” saying names of temporarily restricted fund accounts were confusing and included pools of funds with somewhat different purpose restrictions.

He said various accounts also never should have been allowed to accumulate year after year.

Donovan said “donor intent depends on documentation, and the documentation available here points to broad categories of support for NCCC.”

Donovan said his review didn’t find restrictive language such as “x% of the gift will be allocated to NCCC’s permanent endowment” or “the gift will be used only for activities outside of NCCC’s normal operations as determined by NCCC’s director.”

Donovan also wrote that his determination wasn’t meant to conclude that no individual donors could have been misled in contributing to NCCC, including to The Prouty.

“Our review looked at publicly available written material,” Donovan said. “If D-H provided a potential donor with specific written information to the effect that some or all of the funds would be set aside for a period of time, or for a more specific purpose, then that donor has a right to request that the purpose of the gift be carried out.”

Israel in his lawsuit alleged that less than a month after discussing the situation with his superiors in 2015, he was stripped of his authority and responsibilities for the clinical care of patients at the cancer center, which led to his resignation.

D-H previously said Israel voluntarily agreed to retire as the cancer center’s director on Sept. 30, 2016.

According to court documents filed by D-H, Israel signed an agreement in January 2016 that would pay him more than $1 million over three years.

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