Levy ignored warnings to end relationship

Hospital chief apologizes for ‘worst mistake,’ but has no plans to resign

“I’ve been in public service about 40 years, and although I’ve made mistakes along the way, this is probably the worst one I’ve ever made,’’ said yesterday. “I’ve been in public service about 40 years, and although I’ve made mistakes along the way, this is probably the worst one I’ve ever made,’’ said yesterday.
By Liz Kowalczyk
Globe Staff / May 15, 2010

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Paul Levy, chief executive of Beth Israel Deaconess Medical Center, said yesterday that senior staff and hospital board members warned him for years about the pitfalls of his longtime close relationship with a female employee, but for reasons he does not fully understand he ignored their advice.

Levy, in his first interview about the controversy, said he made a “big mistake’’ by believing that he could hire and employ his “close personal friend’’ for years at the Harvard teaching hospital without upsetting other employees and potentially damaging the reputation of the institution.

He declined to detail the exact nature of the relationship with the woman, which began before Levy hired her in 2002, but said he was very sorry for his poor judgment and hoped to win back the trust of employees and patients.

He said he does not believe charitable funds were misspent, because the woman filled needed jobs, did good work, and was highly qualified even though she had no hospital experience when he hired her right out of graduate school. He said a severance of nearly $30,000, which was paid to the woman last year when she left the hospital, was in line with payments to other employees whose jobs were eliminated.

Despite public rebukes by the hospital’s board of directors and, now, a review by the attorney general’s office, Levy said he has not thought seriously about resigning — even though others have raised the possibility.

“I really love this place,’’ he said. “I’ve mainly thought about how much I’d like to stay here. We’re doing really good things for patients and families.’’

Levy, the married father of two daughters, said he did not want to discuss his family or the situation’s impact on them.

His comments about the relationship cap a tumultuous three weeks at the hospital, during which the board held four emergency meetings to discuss two anonymous letters it received accusing Levy of improper relationships with employees. The board last week fined Levy, who made about $800,000 last year, $50,000 for showing poor judgment in his relationship with one employee, his close friend.

On Thursday, after days of discussion with Attorney General Martha Coakley’s staff, which was concerned that the board was not transparent about its internal investigation, the board asked her office to conduct its own independent review. Her office, which has regulatory oversight over nonprofit hospitals, will examine whether charitable funds were misspent and whether the board properly investigated and handled the situation.

Yesterday, Levy was somber and apologetic during an hour-long interview in his office. He said he decided to speak with the media yesterday because the board had completed its review.

Levy, 59, said he met the woman when she was an undergraduate at MIT during the late 1990s. He became a mentor and thesis supervisor for her graduate studies in city planning and engineering at the school in 2001. When Levy was hired as chief executive of Beth Israel Deaconess in 2002, he brought in a team of people to help him turn around the financially struggling hospital, including his friend from MIT, who he said was “very thoughtful and educated.’’

She worked in various departments at the Boston hospital for nearly two years, including information technology and strategic planning, as an organizational, planning, and operations specialist, Levy said. During that time, she directly or indirectly reported to him.

Then Jeffrey Liebman, president of the hospital’s Needham campus, asked Levy if he could hire her as chief of staff and director of strategic planning, because she had skills such as familiarity with design and permitting issues that would be helpful as the hospital built a $30 million addition. Levy said he does not know whether the job was created for his friend.

“Throughout that period we maintained a very close friendship,’’ Levy said. He said he was not involved in setting her salary, which was about $100,000 when she left.

During the nearly eight years she worked at the hospital, Levy said, three board chairs, including Carl Sloane and Lois Silverman and current chairman Stephen Kay, and several senior managers told him rumors were circulating about the relationship and employees were upset.

Levy acknowledged that he spent a lot of time with the woman, eating meals, driving places, and traveling, and that their bond was visible to other staffers. Employees were concerned that she was receiving favorable treatment because of her special access to him, his colleagues warned, and that she might be reporting to him about events in other departments, influencing his opinions and decisions.

“The message was in essence, ‘You should do something about this,’ ’’ Levy said. “I am trying to figure out why I made this mistake . . . allowing that to continue all these years and being insensitive to the impact that would have.’’

At one point last fall, Levy said the warnings from senior colleagues intensified and it “finally sunk in.’’

“I realized for her good, my good, and the hospital’s good that she should no longer work here,’’ he said.

He said he, the woman, and Liebman met, and Liebman said he had considered eliminating her job because of budget constraints, so that’s what they mutually decided to do.

Levy, who is on the board that oversees MIT, said he heard about a job at the school, called the woman in charge of hiring for the position, and recommended his close friend for the job — something he said he would have done for any friend.

“I’ve been in public service about 40 years, and although I’ve made mistakes along the way, this is probably the worst one I’ve ever made,’’ he said, “because of the effect it’s had on people here at the hospital who have come to rely on me. . . . I know the hurt and disappointment is going to remain. Although what I did didn’t cause harm to a particular person, it cased harm to the institution. . . . This will take quite a while for people to get over. . . . I am hoping people can look past this personal infraction.’’

Liz Kowalczyk can be reached at

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