Five years later, Flying Hospital is financial flop

Charity group's humanitarian project becomes a movie prop

January 16, 2002|By Bill Sizemore | Bill Sizemore,KNIGHT RIDDER/TRIBUNE

NORFOLK, Va. - Just 5 1/2 years after Pat Robertson unveiled his $25 million hospital plane with a send-off speech by George H.W. Bush, it sits unused in the Arizona desert, at risk of being permanently grounded.

The Flying Hospital Inc., the charity that bought the plane a year ago from Robertson's organization, has defaulted without ever making a payment. Ownership of the plane has reverted to Operation Blessing, Robertson's group, which has not decided what to do with it.

The plane, a former airliner that Robertson bought and converted for humanitarian medical missions overseas, has not been used for that purpose in more than a year. Its only use this year was as a prop in the filming of Ali, the movie about boxing great Muhammad Ali. "If it makes the final cut, I guess the last hurrah of the Flying Hospital is to be in a major motion picture," said Jeff Ruffolo, the plane's former publicist.

Ruffolo is among a number of former employees and vendors who are owed nearly $200,000 by the charity that bought the plane last year. The group poured $1.5 million into the project but has now turned off the spigot, according to Stuart M. Warren, a Los Angeles lawyer and board member of the Flying Hospital Inc.

"I am sorry, but the Flying Hospital has no money available to pay you anything," Warren wrote Ruffolo in a Dec. 3 letter.

Ruffolo, a free-lance public relations executive based in Southern California, says he is owed $14,500.

`A disaster'

"They are in the position now of trying to extricate themselves from this morass that they got themselves into," Ruffolo said. "It was a consistent financial drain, a disaster. The thing ran on empty."

Almost from the time it was launched, the plane has been a source of financial difficulties and internal rancor.

Robertson, the Virginia Beach-based religious broadcaster, bought the Lockheed L-1011 wide-body jet in the fall of 1994. He raised money for its conversion on The 700 Club, the daily news/talk show produced by his Christian Broadcasting Network.

At its May 1996 unveiling at Dulles International Airport, former President Bush praised Operation Blessing as one of a "thousand points of light" - the phrase he used during his presidency to describe the importance of private-sector altruism. But nine months later, the plane was at the center of a major blowup in Robertson's organization.

Dr. Paul R. Williams, Operation Blessing's chief medical officer, wanted to perform medical missions in remote areas of the world where the huge airplane couldn't go. Robertson insisted that the Flying Hospital remain the group's focal point. In February 1997, Williams and his entire 10-member core medical team were dismissed and replaced with volunteers.

In the spring of 1999, the plane was a catalyst for internal strife at another overseas medical charity, Norfolk-based Operation Smile.

In a joint venture with Operation Blessing, volunteer surgeons visited 18 countries in nine weeks, doing facial surgeries on disfigured children. But only 215 of the 5,000 surgeries were done on the plane, which functioned primarily to attract publicity.

A $9 million mission

The mission cost nearly $9 million and created a rift on the Operation Smile board, some of whose members considered it more about media hype than medical care. Over the coming months, half the board quit, several major financial backers pulled out and the organization's revenues plummeted by half.

By late 2000, ground down by four years of oppressive maintenance costs, Operation Blessing was anxious to unload the Flying Hospital.

Just to keep the plane parked in the desert in flight-ready condition cost $3.5 million to $4 million a year, according to Robert W. Fanning, Operation Blessing's vice president and chief operating officer. A medical mission cost an average of $500,000 on top of that.

CBN, which provided the Flying Hospital's operating funds, reported spending $8.3 million on the plane in its fiscal 2000 tax return. That represented 4.5 percent of CBN's $184.5 million budget.

Then the Robertson group found what seemed the perfect buyer: a charity that would assume the burden of ownership but allow Operation Blessing to continue using the plane for two medical missions a year.

The sale price: $2 million, less than one-twelfth of Robertson's initial investment, to be paid over four years.

The Flying Hospital Inc., a nonprofit entity based in Newport News, Va., pledged to seek secular humanitarian and corporate sponsors for the plane. Walter M. Frehe, a Las Vegas aviation executive, was named president and chief executive officer.

The money man of the group was said to be Roderick Thomson, chairman of the board. Thomson is a managing director of Draper Fisher Jurvetson ePlanet Ventures, a global venture capital firm specializing in information technology start-ups. It has offices in Silicon Valley, London, Tel Aviv, Singapore, Hong Kong and Tokyo.

Thomson, "according to our reports, had extremely deep pockets," Fanning said.

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