Family finds that helping others pays handsomely

Taxpayer-funded nonprofit paid six relatives $1.4 million last year

November 07, 2010|By Scott Calvert, The Baltimore Sun

Morris and Sandra Hill sit atop a corporate ladder fashioned from their own family tree.

The couple has helped build Baltimore Behavioral Health Inc. into a $17 million enterprise. Two of Sandra Hill's children have jobs paying six-figure salaries, and her son-in-law is the chief doctor.

The family, which holds six of eight seats on the nonprofit's board of directors, has enjoyed rising personal income while serving Baltimore's plentiful supply of drug abusers under a taxpayer-funded system intended to help those beset by psychiatric problems.

As BBH billings to Medicaid shot upward in recent years, so did family salaries. Last year, the six made a combined $1.4 million. All eight board members are paid.

Nonprofit experts say Baltimore Behavioral Health exemplifies bad practice for tax-exempt charities.

Daniel Kurtz, a partner at the New York law firm Skadden, Arps, Slate, Meagher & Flom, reviewed BBH's public tax filings at The Baltimore Sun's request. He noted that BBH does not have an independent board. While federal tax law does not require unpaid directors, Kurtz said having an independent board provides important oversight and is a "foundation stone for good governance" at nonprofits.

"There is nobody to whom they are accountable here, nobody," Kurtz said of BBH executives. "Because they are the board. Senior management and the board are the same. The principle of accountability is lacking."

Chuck McLean, vice president of research at Guidestar, a Virginia-based organization that tracks nonprofits, said: "This is a public entity, and when you don't have independent board members, the concern would be that the board members are not necessarily looking out for the best interests of the community that this organization is intended to serve.

"Overall," McLean said, "what is most disturbing to me is that they don't have audited financial statements."

Morris Hill prepares the returns, though he is not an accountant, and in tax filings BBH says it does not hire outside accountants to audit or review its books. McLean said that is "very unusual" practice for such a large nonprofit.

McLean described as "pretty extreme" the family's collective 84 percent pay raise from 2004 to 2009.

In October, investigators from the Office of Health Care Quality informed BBH that it is in violation of a state law passed in 2005 that governs the composition of boards at nonprofits that receive public mental health funds.

The law says no one can serve on the board of such an organization if an "immediate family member" works for that organization. In BBH's case, investigators concluded, the law applies to all six family members on its board. BBH has yet to respond to the state's notification. BBH did not respond to The Sun's written questions about its executive salaries or board makeup.

Here is a look at the key members of the organization:

Morris and Sandra Hill

The autumn of 1998 marked a low point for Morris and Sandra Hill. That October, the Baltimore couple filed for Chapter 7 personal bankruptcy, burdened by debts that included 20 credit card balances totaling more than $250,000.

Today, they have an array of assets: a Fells Point condominium bought four years ago for $675,000; a Virginia Beach condo that cost $519,000 in 2003; and a 45-foot yacht, the Argo, for which they paid $684,000 in 2007, according to property records.

Their fortunes have rebounded during a period of significant growth for BBH. Last year, husband and wife together made just over $500,000 as executives of the nonprofit. He is the president; she is vice president for clinical and medical services.

BBH's roots go back to the 1970s, when Sandra Hill, a registered nurse, worked among alcoholics in Baltimore. She "really wanted to make a difference," recalled the Rev. Richard Lawrence, pastor of St. Vincent de Paul Church. "She believed these guys could make it, and she believed she could be responsible for helping them do it."

Hill, now 72, went on to earn an executive master's degree in business at what was then Loyola College. She's licensed as an advanced practice nurse specializing in psychiatric care.

From its inception in 1997, Baltimore Behavioral Health was a family affair, with Morris Hill, now 76 and licensed in Virginia as a counselor, as president. His wife initially served as secretary-treasurer and chief clinical officer.

As early as 1998, the nonprofit company provided a healthy sum for the Hills. Sandra Hill was paid $13,000 as an executive, and BBH paid her company, Sandy Hill Associates, $71,000 under a contract to provide psychotherapy. BBH paid Morris Hill's company, Healthcare Management Services, $79,000 for "management/consulting/training."

Last year, BBH paid the Hills identical salaries of $252,992.

William andVictoria Hathaway

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