Jeffrey Kraut North Shore-LIJ

After William Rudin's giant scheme to take over St. Vincent's Hospital real estate properties has triggered an investigation by prosecutors, the Rudin Family went to great lengths to make sure that its luxury condominium conversion plan would be fast-tracked, pulling out all the stops.

But new information came to light this week : one top official of the North Shore-LIJ hospital system, Jeffrey Kraut, is chair of the committee, which will recommend or deny North Shore-LIJ's application for a Department of Health license to operate a controversial stand-alone Emergency Department.

The so-called ''Emergency Department'' is a consolation prize to the community of the Lower West Side of Manhattan after the loss of a full-service hospital and Level 1 trauma center when St. Vincent's Hospital closed on April 30, 2010. Thus far, Mr. Kraut's actions has not been referred to the Attorney General's office, which oversees the ethics of the State's executive agencies, such as the Department of Health.

Mr. Kraut's conflict of interest in having influence over his own company's financial contracts and government licenses provide fresh evidence about the lack of integrity in the Rudin condo version plan.

In order to build its luxury condos, the Rudin Family encouraged North Shore-LIJ's application for the stand-alone Emergency Department. Because the Rudin condo conversion plan depends on the approval of North Shore-LIJ's application before the Department of Health, community members question Mr. Kraut's influence on other members of the Committee on Establishment and Project Review Meeting and Public Hearing, which will determine the outcome of North Shore-LIJ's permit application.

The information about Mr. Kraut's conflict of interest is another negative blight on the Rudin Family, who have also tried astroturfing, lobbying, and distribution of propaganda by mail. The Rudin Family has also been criticised for opposing freedom of information requests that might be useful in investigations.

Separately, the Department of Health has been criticised for its inaction in saving other hospitals from closure, and for the absence of any investigation or prosecution of individuals, who were involved in the hospital closure crisis. In the time that Christine Quinn has been Speaker of the New York City Council, at least eight city hospitals have closed. In 2010, North General Hospital in Harlem declared bankruptcy and St. Vincent's Hospital in the West Village shut down after shady backroom meetings. In 2009, two hospitals in Queens – St. John's Queens Hospital in Elmhurst and Mary Immaculate Hospital in Jamaica – went bankrupt. In 2008, Cabrini Medical Center in Manhattan, Parkway Hospital in Queens, and Victory Memorial Hospital in Bay Ridge closed. And in 2007, St. Vincent's Midtown in Manhattan was closed. Separately, one other hospital in Brooklyn, Long Island College Hospital, was recently saved : it had been on the brink of closing, and the only way the hospital was saved was by merging it with SUNY Downstate. (And all this is not counting the bankruptcy filing made by Peninsula Hospital Center of Queens.)

St. Vincent's Rudin Inquest

Manhattan District Attorney is investigating St. Vincent's ''go-for-broke plan'' that has supposedly enriched the Rudin Managedment Company, which has been waiting in the wings for the hospital to flatline.

St. Vincent's Hospital is under investigation by the Manhattan DA's office for allegations that the Rudin Management Company has been planning a real estate harvesting/luxury condo conversion plan of the shuttered hospital.

St. Vincent's closed on April 30, 2010, after it laid off many of its employees. Many employees later learned that the hospital was not paying into the state's unemployment fund, so those who were laid off were not eligible for unemployment benefits.

Ever since it closed, the impacted community of the Lower West Side of Manhattan has been calling for investigations into what lead to the hospital's sudden closure. The hospital failed to file a closure plan, as it was required to do, with the New York State Department of Health.

From an article in The New York Post :

Going broke allowed the hospital to get an OK from the state Health Department to sell to the Rudin family, which is building luxury housing on the site. Without bankruptcy, state officials would not have been permitted the hospital to shut down, the sources said.

"This was a well-thought-out plan," said Tom Shanahan, a lawyer for a group of former St. Vincent doctors and nurses suing St. Vincent's. "They wanted out and had to justify it to the state. They were running it into the ground."

DA Cy Vance's team is looking into whether vendors double-billed for services, gave kickbacks for contracts and hired relatives of hospital employees, sources said.