After weeks of speculation and rumors floating in the Chicago LGBTQ community, Howard Brown Health Center (HBHC) finally confirmed that the reasons for the departure of CEO Michael Cook and CFO Mark Joslyn had to do with allegations of mishandling funds involving the Multi-Center AIDS Cohort Study (MACS) grant. As announced last week, the National Institutes of Health (NIH) , which administers the grant, discovered the discrepancies. HBHC also announced that Jamal Edwards, currently a partner in the law firm of Kirkland and Ellis, will take over as CEO June 1. Windy City Times spoke separately to Edwards and to Paul Fairchild, the interim chief operating officer.
Towards a timeline
Both Edwards and Fairchild indicated that they were still not able to give full details of what transpired at HBHC. When asked for details about “management changes” that the agency claims to have instituted, Edwards said that, for instance, they were “following recommendations on internal controls that they were in the process of implementing, such as the appointment and creation of a compliance committee that would take any issues directly to the board.” He also said that he would not be able to make too many changes until he officially became CEO in June.
What was the timeline of events? When did things begin to unravel and when did Howard Brown begin to act upon the information? Who knew what was going on and when did they speak up? Edwards responded that such information was “confidential and privileged.” He did say that the board received a letter from NIH in October 2009, stating that it had found discrepancies. While NIH is conducting a review of MACS” proper protocol, the board has hired an outside auditor to conduct a review. That confidential review will be given to NIH and will be discussed publicly, assuming NIH approves.
According to Edwards, the board decided that the lead status on the MACS grant would be transferred to Northwestern University April 1: “It was in the best interest of Howard Brown and the grant to ensure that there was no mishandling of funds. Northwestern had requested to be the lead agency in the past; we have a very strong partnership with them.” Fairchild said that, “the only difference is now Northwestern will manage the payment of subcontractors, versus us paying the subcontractors. Northwestern will invoice for the work.” That, according to him, “was necessary because the grant had come due; it’s renewed every five years. We were not comfortable that we were in compliance with NIH regulations.”
If the board had not decided to transfer the lead status to Northwestern, would NIH still have insisted on the transfer taking place? Both men said they could not speculate on what NIH would or would not have done. Edwards said that NIH “understood that the transfer is in the best interest of MACS, to protect the ongoing research. The scientific integrity of Howard is still excellent. None of that is compromised.” Both men insisted that the transfer did not involve a huge loss of money. Edwards also said that the MACS grant represents over $3 million a year, of which “a substantial amount of that goes to Northwestern, a substantial amount goes to Howard Brown.” As for potential loss of status, Edwards said that Howard Brown is still doing the exact same work and the agency is “as important to NIH and Northwestern as before. I”ve spoken to researchers at NIH—they still respect Howard Brown as a community-based organization doing great work.”
Edwards as outsider/insider
The appointment of Edwards as CEO is bound to raise some questions because he comes to the position after having served as Howard Brown’s primary outside counsel. Does this represent a conflict of interest? Edwards said that he and his partners at Kirkland and Ellis “did not have any access or information [ about the mishandling of funds ] to put us on notice.” He went on, “My firm brought the issue to the board’s attention. We have always been candid with Howard Brown.” From his official biography, all indications are that Edwards has some experience with being on the boards of non-profits but has little actual work experience in the industry. He has been immediate past president/chairman of the board on the board of the AIDS Legal Council of Chicago and is currently the vice chair of Vital Bridges. But what direct experience does he feel he brings to the position of CEO of Howard Brown?
Edwards’ response was, “I bring integrity. I have counseled the board. The number one thing I bring is the integrity of being an accomplished lawyer. I’ve been a vice president and president in non-profits and worked in several for-profits. I know how to ask and to seek counseling guidance for a non-profit. Ultimately, I work in the best interest of Howard Brown.” About whether he was simply part of the same culture that may have resulted in the current scandal, he responded, “I’m not part of the culture of the past. I’m a part of the culture of integrity at Howard Brown.” He also said that it was not unusual for boards to hire their outside counsel, naming Coca-Cola, Home Depot and WellPoint as having done so: “When something goes wrong, it’s not unusual for a board to hire the lawyer who helped fix things.”
What to tell, when and to whom
Edwards and Fairchild spoke of the concerns that might emerge with donors. Fairchild confirmed that he had organized a meeting with Howard Brown’s “major donors.” He would not name them but said the purpose of the meeting was to bring them up to date and answer questions. According to Fairchild, “People were relieved to talk with us. Everyone was graceful.” Edwards said that “they should know that the board has done everything it can—all the steps were taken voluntarily, we are facing challenges which are under control. The staff has worked very hard and Howard Brown will continue to survive.”
But what would they want people in the community to know? Edwards responded, “We plan to continue to reach out—we hope people understand that we have been doing everything in the best interest of Howard Brown. We cannot speak as openly as we would like; we want to protect the organization by following the proper protocol.” He added that “Howard Brown is still strong, its research and programs are strong. The community should continue to support Howard Brown.” Fairchild also said the community should know about the Howard Brown staff, saying, “they have worked hard in providing the vital services of Howard Brown.” He added, “Without Howard Brown, people will die.” Fairchild went on to say that, “We don’t intend to go anywhere. The work continues.” Addressing rumors that the agency was cutting services, he denied that was the case, “there is a waiting list for people who are uninsured, but that has nothing to do with any of this.”
As for the rumors that a previous relationship between board chair Steven Phelps and Cook may have compromised matters, Fairchild said he was “not going to comment on any of that.” Edwards responded, “I don”t have any personal knowledge about that. That question should be addressed to those with personal knowledge. I have no reason to think that personal knowledge compromised the board.”
While these responses address some of the questions that have emerged in recent weeks, there are still many remaining and the speculation that surrounds the agency is likely to continue for some time. On the one hand, the board of Howard Brown, like that of so many non-profits, is largely answerable to its “major donors,” who appear to have received as close an account as possible before the community at large received one. On the other hand, board members and the agency are also part of a community that consists of people and patients who may not be donors but who still seek transparency from an organization that depends on the good will of those it was formed to serve.
In the coming weeks, Windy City Times will continue to follow this story.