Board may make Levy repay hospital over lapse in judgment

By Liz Kowalczyk
Globe Staff / April 28, 2010

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The board of Beth Israel Deaconess Medical Center plans to impose financial penalties on chief executive Paul Levy for undisclosed lapses of judgment in a personal relationship with a female employee, according to two hospital sources.

The board, which held an emergency meeting Monday, discussed requiring Levy to repay the hospital for a severance package that was given to the woman when she left her job last year at Beth Israel Deaconess-Needham, as well as withholding bonus money from him this year, said the sources. They asked not to be identified because the situation is still unfolding.

Repayment of the severance was discussed because some board members were concerned that the woman might have left her job because of her relationship with Levy. It was unclear whether the board reached a conclusion on the issue.

The sources said the board has not yet decided on the size of the financial penalty, which is intended to make clear that the board takes Levy’s poor judgment seriously.

Hospital spokeswoman Judy Glasser said yesterday that “the board expects to finalize its actions shortly.’’

Levy could not be reached for comment yesterday.

In a written statement provided to the Globe Monday, board chairman Stephen B. Kay said: “Recently, a letter was sent anonymously to some of our board members, and it involved allegations about our CEO. Even though the letter was anonymous, the board felt it needed to conduct further inquiry and has done so.’’

He said Levy, 59, “did acknowledge lapses of judgment in a personal relationship, and the board is taking appropriate action.’’ Kay said the board was disappointed but stood behind the longtime chief executive.

At the board’s meeting Monday, according to sources, members also discussed the appropriateness of various jobs the woman held, including as a special assistant to Levy and a management job at the Harvard teaching hospital’s Needham campus, and whether favoritism was involved in her being given those jobs. It was unclear whether the board reached a conclusion.

Levy, who took over as chief executive of Beth Israel Deaconess in 2002, e-mailed a statement to hospital employees Monday in which he apologized “for any discredit this brings upon our hospital and the excellent work you do here.’’

Liz Kowalczyk can be reached at