From the Salem Statesman Journal, September 19 2009

Negotiating secretly, federal and state officials have failed to find agreement, a situation that could put the facility under federal control

Secret settlement negotiations between federal and state officials came close to a crucial agreement on Oregon State Hospital reforms, newly released records show.

But no deal materialized as the two sides locked horns during prolonged, still-unresolved negotiations.

Barring a settlement to conclude a 3-year-old U.S. Department of Justice investigation into patient care, Oregon’s main mental hospital remains on the hook for tough-minded federal scrutiny.

And the state continues to face the possibility of being sued by the feds for alleged violations of patients’ civil rights. Such a lawsuit could result in the 126-year-old hospital being placed under federal court control.

Prospects for a settlement remain veiled. State and federal officials privy to the negotiations declined to answer the Statesman Journal’s questions about the case.

The newspaper conducted its own review of the high-stakes, hidden negotiations by obtaining e-mails, faxes and letters exchanged by U.S. DOJ and Oregon officials since the hospital investigation began in June 2006. A review of the correspondence found:

-Federal and state lawyers have swapped various settlement proposals and counter-proposals aimed at reaching agreement on hospital reforms.

-The two sides quickly forged substantial agreement on most issues concerning patient care and safety, but negotiations bogged down on “procedural points.”

-Oregon officials have remained adamant that the state won’t agree to any settlement resulting in federal court oversight of the hospital, prompting federal concern about the state’s “intransigence.”

-Two lawyers have been at the fore of the settlement discussions. The key players are Micky Logan, Oregon’s senior assistant attorney general, and David Deutsch, senior trial attorney in the litigation section of the U.S. DOJ Civil Rights Division.

-Late last year, Deutsch made a pitch for a face-to-face meeting between federal lawyers and Oregon Gov. Ted Kulongoski. The governor nixed the invitation.

“We would very much like to reach an amicable resolution of our investigation short of contested litigation,” Deutsch wrote in a Nov. 12 letter to Logan. “We would appreciate an opportunity to explain our position directly to the governor. We suggest that our section’s leadership meet with Governor Kulongoski in December.”

Writing to Deutsch in late-December, Kelly Skye, Kulongoski’s general counsel, said the governor “appreciates your office’s request to meet with him, but respectfully declines the invitation.

“The governor has been kept well apprised of the details of the negotiations between your office and the Oregon team and he remains firm in his position that Oregon should not stipulate to a court judgment. The governor is pleased that the parties are in agreement on each of the substantive points related to patient care and safety, leaving only procedural points to resolve. He urges your office to continue to work directly with Oregon’s negotiation team.”

Oregon’s most recent settlement proposal was issued May 15.

Logan signaled the state’s willingness to enter into a four-year deal with the feds on hospital reforms. The U.S. DOJ had previously proposed a two-year timeframe.

“Given that the construction of a new OSH facilities will not be completed in two years, it is not realistic for OSH improvements to be completed in two years,” Logan wrote in a letter to Deutsch. “Oregon intends to continue to improve OSH and hopes to have one of the best psychiatric hospitals in the nation by 2013.”

Logan added that the state already has ushered in sweeping changes at the long-neglected mental hospital, including hiring hundreds of new employees, huge reductions in staff use of seclusion and restraints to control patients, and the creation of treatment malls designed to provide patients with better therapy.

“In short, Oregon has radically improved since November 2006,” Logan wrote, referring to the timing of U.S. DOJ’s first visit to the state hospital. “Given that both sides recognize that Oregon has made significant progress in addressing the concerns identified by the USDOJ, we believe that further progress will not be facilitated by the current offer from DOJ. With that in mind, Oregon urges the USDOJ to accept Oregon’s counter-proposal.”

It’s unclear whether federal lawyers responded to Oregon’s May proposal. No written record of a federal response was included in a batch of documents recently released to the Statesman Journal by the Oregon Department of Justice.

The newspaper requested written correspondence between federal and state officials under provisions of Oregon’s public records act.

Last month, the state Department of Justice released hundreds of pages of communications records. Exchanges between state and federal officials ranged from haggling over sticking points in settlement proposals to ground rules for federal investigators’ visits to the state hospital to Salem driving directions for the federal guests.

The chain of correspondence occurred between June 2006, when the federal investigation began, through late-July of this year, when a team of federal investigators arrived in Salem for a fresh review of the psychiatric facility.

Since the recent visit, the feds haven’t publicly released any findings or statements concerning patient care and hospital conditions.

On Sept. 9, a spokesman for the U.S. Department of Justice denied the Statesman Journal’s latest request for an interview about the status of the federal investigation and settlement negotiations.

“Thanks for reaching out. We decline the request at this time,” agency spokesman Alejandro Miyar wrote in an e-mail to the newspaper. “Timing doesn’t match up in terms of what you want to write about and where we are here with our process. I’m very mindful of your role in this story and would like to revisit this when the time is appropriate. Not sure when that will be, but the attorneys are mindful, too.”

Officials with the Oregon Department of Justice and the state Department of Human Services also declined to discuss the case. The state hospital is part of DHS.

After conferring with the state Department of Justice, DHS officials declined to answer 10 written questions posed by the newspaper.

Among the inquiries that went unanswered:

-What unresolved issues stand in the way of a settlement?

-Are negotiations at a standstill? If not, what’s the best way to describe the current status?

-Is a settlement likely before the new hospital opens late next year?”

The state is moving forward with construction of a $280 million complex on the hospital campus in central Salem. Part of the new facility is scheduled to open late next year, and the entire 620-bed complex is projected to open by 2011.

10 unanswered questions

State Department of Justice and human services officials declined to answer 10 questions posed by the Statesman Journal concerning settlement negotiations with the U.S. Department of Justice — discussions aimed at resolving a three-year-old federal investigation of the Oregon State Hospital.

The unanswered questions:

1. What unresolved issues stand in the way of a settlement?

2. Are negotiations at a standstill? If not, what’s the best way to describe the status of negotiations?

3. Has U.S. DOJ countered Oregon’s May 15 settlement proposal?

4. What concessions or modifications, if any, has Oregon made since negotiations began?

5. Why did Gov. Kulongoski decline U.S. DOJ’s request to meet with the governor late last year?

6. Why does Oregon maintain that patient discharge planning and community placements should be excluded from the settlement process?

7. Is a settlement likely before the new hospital opens late next year?

8. Did U.S. DOJ provide Oregon with any exit interview comments following the latest on-site visit to OSH?

9. Will U.S. DOJ issue written findings concerning the latest review. If so, when?

10. What’s the next step in the settlement process?

File downloads (PDFs)

* June 14, 2006: U.S. Dept. of Justice letter to Gov. Kulongoski
* June 15, 2006: Gov Kulongoski’s letter to U.S. Dept. of Justice
* July 31, 2006: U.S. Dept. of Justice letter to Oregon Asst. Attorney General
* Aug 16, 2006: Oregon request to feds for reimbursement related to visit
* Oct. 27, 2006: Oregon letter to U.S. Dept. of Justice with ground rules for visit
* Jan. 9, 2008: U.S. Dept. of Justice letter to Gov. Kulongoski with findings
* April 15, 2008: Oregon letter to U.S. Dept. of Justice
* May 30, 2008: U.S. Dept. of Justice letter to Oregon
* July 17, 2008: U.S. Dept. of Justice letter to Oregon
* Oct. 17, 2008: U.S. Dept. of Justice letter to Oregon
* Nov. 12, 2008: U.S. Dept. of Justice letter to Oregon
* Nov. 17, 2008: Oregon letter to U.S. Dept. of Justice
* Dec. 22, 2008: U.S. Dept. of Justice letter to Oregon
* Dec. 26, 2008: Gov. Kulongoski’s letter to U.S. Dept. of Justice refusing meeting
* May 15, 2009: Oregon letter to U.S. Dept. of Justice
* July 17, 2009: Oregon letter to U.S. Dept. of Justice