Can Howard Brown survive Jamal Edwards?
The controversial CEO is either the LGBT health center’s savior or its worst enemy—depending on whom you ask.
Two years ago, a financial crisis threatened to shutter Howard Brown Health Center, the Midwest’s largest LGBT health-care organization. Auditors found the Lakeview institution owed $1.1 million to the federal government and $1.7 million to Northwestern University. The problem: Howard Brown had been using federal grant funds allotted for the Multicenter AIDS Cohort Study, the nation’s longest study of HIV-positive men, to pay for other, operational costs. And the center was covering its tracks by falsely certifying the funds were used for allowed purposes.
In response to the auditors’ revelations, Jamal Edwards, then a partner at Kirkland & Ellis and Howard Brown’s pro bono legal counsel, advised the board “to immediately remove the CEO and the CFO,” according to former board member “Smith” (who requested anonymity and who, like all anonymous sources in this story, has been given a pseudonymous surname). Howard Brown soon found itself with a new head: Edwards, whose second-year anniversary as president and CEO falls on Friday 1.
According to Edwards and his supporters, he has overseen the dramatic, successful turnaround of a 38-year-old agency that last year received about 36,000 patient and client visits. But according to other current and former employees, Edwards has crushed morale, driving away both longtime staffers and some of his own hires. Is Edwards killing the patient in order to save it?
Former CEO Michael Cook and former CFO Mark Joslyn, who did not respond to requests for interviews, were forced out of Howard Brown in April 2010. A board committee, along with Edwards, conducted several interviews for a new director and offered the position to two internal candidates. Both turned it down. “We couldn’t give the job away,” Smith says. One person involved in the process tells me, “It was made very clear that the interim CEO would have absolutely no authority to do anything, that any and all decisions would have to go through Jamal first.” Of this, Edwards says, “That’s a conversation between myself and the board of directors. I’m not discussing it.”
Edwards, who had never been a CEO for a nonprofit or a health-care organization, submitted his résumé, Smith says. “He was not my first choice,” Smith adds, “but we had no time or money to go on a national search.” Another former board member, “Jones,” says the board intended to employ Edwards only as an interim CEO and later conduct a national search. But that objective never materialized. By mid-2011, all but one of the board members who’d hired Edwards had resigned.
Jay Paul Deratany, an attorney and a Howard Brown board member at the time of Edwards’s hiring, says of his fellow lawyer’s candidacy, “There’s a significant question as to whether or not an attorney who is advising a board of directors to terminate a CEO should then go on to become the CEO. That’s referred to as a direct conflict of interest.” Another attorney at Kirkland & Ellis led the Howard Brown review, which took conflict-of-interest rules into account. But Edwards tells me, “I was their general counsel. Of course I advised them what to do. But the decision is their decision.… If you can find proof that it’s a conflict of interest, then let me know. It’s not a conflict of interest.”
After Edwards became CEO, Jones says staffers complained about their new boss’s lack of experience. Smith now says of Edwards, “He doesn’t have the soft skills, the skills to respect and work with people. He might’ve known how to walk us out of the legal hot mess, but he has been devastating to the staff and operation.”
Five months after Edwards took on the CEO position for an annual salary of $265,000, Howard Brown announced a Lifeline Appeal to raise $500,000 in 50 days. Edwards says the agency reached $670,000 in 50 days.
A federal program has proved an even bigger moneymaker: 340B allows federally qualified health centers to buy and sell drugs (via participating pharmacies) at a reduced rate, bill private insurers at the regular rate and pocket the difference. “I implemented it,” Edwards says of Howard Brown’s 340B, which a Walgreens spokesperson confirms did not generate revenue for Howard Brown before November 2010. But a policy change that took effect two months prior to Edwards’s start also made the program more lucrative: Before then, a health center could take advantage of 340B at only one pharmacy; Howard Brown currently uses it at about 30 Walgreens stores.
In April of this year, days after Howard Brown reached a settlement with the federal government to pay back $715,000 of its debt by 2014 (debt negotiations with Northwestern are ongoing), the organization announced a fiscal-year 2011 net surplus of $1.2 million.