New documentary causes stir at Georgia hospital

A film placed —for the moment — out of harm’s way
5:01 pm July 12, 2009, by Jim Galloway

Georgia is on the verge of its very own Michael Moore moment. The question is whether that moment will be allowed to happen…

In September 2003, fax machines owned by Albany’s business and political elite began spitting out a series of anonymous newsletters that detailed the inner workings of the nonprofit Phoebe Putney Health System — southwest Georgia’s largest hospital group.

Based on publicly available documents, the “Phoebe Factoids” described the hospital system’s generous executive salary structure, extensive political and business connections, and its financial holdings, which included a Cayman Islands account.

Two locals, accountant Charles Rehberg and surgeon John Bagnato, ultimately copped to the faxes. The pair said they wanted to shed light on a hospital system that wasn’t fulfilling its charitable obligations as a tax-exempt entity.

Ex-FBI agents were sent to confront Rehberg. Phoebe Putney filed a civil suit against both whistle-blowers, alleging defamation, fraud and racketeering. Then the fax-senders were indicted and booked on criminal charges of harassment, aggravated assault and burglary.

Two years into their ordeal, a film crew from Chicago began following Rehberg and Bagnato, who by then had passed their information on to famed Mississippi litigator Richard Scruggs. The Albany Two became the catalyst for a series of lawsuits filed against 50 hospital systems across the country.

The 55-minute documentary “Do No Harm” premiered this May at an Arkansas film festival. Screenings in Chicago and Washington D.C. have also occurred.

The film could have significant political impact in Georgia.

Thirty-five minutes into its story, “Do No Harm” uses video from WALB-TV, Albany’s NBC affiliate, to introduce Ken Hodges, then the district attorney for Dougherty County.

Hodges is now a formidable Democratic candidate for attorney general — the former chairman of the Prosecuting Attorneys’ Council of Georgia.

But in 2004, Hodges was a bloodhound on the scent of the fax-senders. His office used grand jury subpoenas to obtain phone records that led back to Rehberg and Bagnato.

The district attorney passed the information to Phoebe Putney, permitting the hospital system to file its civil suit.

“Yes, I did tell Phoebe Putney who was sending the faxes, just as I would tell any victim who the perpetrator of a crime was,” Hodges said in a phone interview last week. “It would be immoral for me not to.”

But after his role was publicized, Hodges recused himself from the criminal prosecution of the fax-senders. Hodges is now a member of the Baudino Law Group in Atlanta, which does a portion of Phoebe Putney’s legal work.

Hodges said he has seen parts of “Do No Harm.”

“I would hate to call it a documentary. I would call it a propaganda piece,” he said. “… It does not accurately portray the subject matter it intends to cover.”

Hodges said it will only take a brief talk with voters to convince them that he acted properly. A statewide campaign is one likely venue for that conversation. A courtroom remains a possibility.

Criminal charges were ultimately dropped against the fax-senders, as was the Phoebe Putney civil suit. A countersuit against the hospital system — false imprisonment was one of the allegations by the whistle-blowers — was settled out of court.

The only stray legal thread is a federal lawsuit Rehberg filed against Hodges and others in which the Albany accountant claims Hodges went after him as “a political favor” to Phoebe Putney.

A U.S. district judge has refused Hodges’ argument that his public office gave him immunity. The ruling is on appeal.

Hodges is being represented by Attorney General Thurbert Baker, whose decision to run for governor led to the open seat that Hodges is now pursuing.

More shoes have dropped in the past few days.

“Do No Harm” was to be shown for the first time in Atlanta last week. But the screening was shut down Thursday when film director/producer Rebecca Schanberg received a cease-and-desist letter from Raycom Media of Montgomery, which owns WALB-TV.

The documentary “has a lot of our news stories and reporters’ stories all through the thing, and [they] never had received a release to use any of that,” said Jim Wilcox, WALB’s general manager.

Sensitive to talk that might arise, Wilcox volunteered that Phoebe Putney has not spent any advertising dollars with the TV station “for years now.” Schanberg accepts that.

“We hope to resolve it amicably,” she said.

There’s more. On Friday, Georgia Watch, the group that was to sponsor the film screening, was also hit with a cease-and-desist letter.

This one was from Phoebe Putney, which objected to the use of the word “corruption” by Georgia Watch when the group promoted “Do No Harm” on its Web site.

Phoebe Putney has never done anything illegal or unethical, hospital attorney Lin Wood wrote in the cease-and-desist letter to Georgia Watch. “Furthermore, your organization is well aware of the unreliable and biased sources relied upon in connection with the so-called documentary,” he wrote.

Wood has demanded a retraction by 5 p.m. Monday. “Govern yourself accordingly,” he wrote.

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