I. Remarks by SEIU President Andrew Stern to invited
participants of the AFL-CIO Pension Conference on 3/18/97
(portions concerning Columbia/HCA Healthcare Corporation):
Just two days ago the New Columbia Shareholder Committee,
which was recently initiated by the SEIU Master Trust, filed a
preliminary proxy statement with the Securities and Exchange
Commission to nominate two independent candidates for election to
the board of directors of Columbia/HCA Corporation. The
candidates are Steven Wallman, a former member of the Securities
and Exchange Commission, and Howard Newman, the former head of
the Medicare and Medicaid programs. This candidacy has already
received support from some major institutional shareholders.
Columbia/HCA is the largest for profit hospital company in
the world and was until early last year the darling of short-term
investors on Wall Street. Then several agencies of the federal
government launched a widespread Medicare and Medicaid fraud
investigation against Columbia/HCA and its share price dropped 30
percent. The current board of directors is the same board which
exposed this company and its shareholders to such financial risk.
These independent candidates give shareholders an
opportunity to vote for highly-qualified directors independent of
management, rather than settling for the current board's
hand-picked candidates. In light of the ongoing fraud
investigation of the Company, we believe board independence is
crucial to restoring the Company's relations with shareholders,
regulators and consumers and to rebuilding shareholder value.
Active management means also being willing to go to court to
defend our rights as investors in the case of disloyal and
reckless management. The board and officers of Columbia/ HCA are
another case in point.
SEIU's National Pension Fund has joined forces with the New
York State Common Fund and ten other large public pension funds
to file a derivative lawsuit against Columbia directors and
officers for criminal fraud, mismanagement and insider trading.
Carl McCall, the Comptroller of New York State and the sole
trustee of the New York Common Fund, stated that the government
investigation "exposed a serious breakdown in corporate
governance and internal control at Columbia/HCA."
II. Materials distributed at meeting:
A. Disclosure Statement with Reference to the Candidacies
of Steven Wallman and Howard Newman for Election to Board of
Directors of Columbia/HCA Healthcare Corporation
The participants in this solicitation will be the New
Columbia Shareholder Committee, Newman, Wallman, the SEIU Master
Trust (a trust for pension funds jointly administered by SEIU
officials and employers of SEIU members), and the Service
Employees International Union ("SEIU"). The Committee was formed
by the Trust and SEIU for the purposes of this solicitation and
welcomes additional members. The Trust now owns about 47,200
shares of the Company's common stock for SEIU National Industry
Pension Fund and other funds. In the past two years, the Trust
has had more than 60 transactions in company stock, having owned
121,200 shares as of 12/31/95. The SEIU National Industry
Pension Fund is one of the plaintiffs in the pending derivative
suit against current and former officers and directors of the
Company seeking a recovery for the Company. Other plaintiffs
include more than 10 public pension systems, including New York
State Common Retirement Fund and five New York City Employee
funds. The SEIU Master Trust has proposed a shareholder
resolution to give equal access to the Company's proxy card and
proxy statement for all duly-nominated candidates for director.
SEIU will bear the costs of this solicitation, which are
estimated at $30,000, which may include use of a professional
solicitor, and include the provision of counsel to the
candidates. It will not seek reimbursement from the Company. In
addition, its regular staff will solicit proxies, for which they
will receive no added compensation. The persons named in the
proxy card are SEIU President Andrew L. Stern and SEIU Assistant
Research Director Steve Askin. Proxies will be sought by mail,
fax, telephone and personal interview. Neither Newman nor
Wallman have worked for or received any compensation from any
other participant. SEIU has agreed to indemnify them from
expenses and claims arising from this solicitation. They have no
agreements or other arrangements with anyone about their conduct
as director if elected, nor about future transactions involving
the Company, nor regarding future employment by the Company. None
of the participants have any understandings or arrangements with
anyone with respect to the Company's securities. Newman and
Wallman do not own Company stock and have not had any
transactions in the Company's stock or with Company. Local
unions affiliated with SEIU represents about 1000 Company
employees. The Company reported as of 12/96 it had about 285,000
employees and 13 hospitals with some union representation. SEIU
locals regularly engage in negotiations over contracts at
different facilities and currently are doing so for the Company's
Los Robles facility (about 350 employees) and recently negotiated
a successor agreement at the Metrowest facility. SEIU is
currently engaged in an organizing effort at the Company's
Sunrise hospital in Las Vegas. None of these facilities are on
strike. Newman's business address: 4 Washington Square North,
Room 33, New York University, New York NY 10003. Wallman's
business address: 9332 Ramey Lane, Great Falls VA 22066-2025.
B. REPRINT OF WALL STREET JOURNAL
March 17, 1998
Former SEC Member,
Health Expert to Seek
Columbia Board Seats
Copyright (c) 1998, Dow Jones & Company, Inc.
Dow Jones Newswires
NEW YORK -- A former member of the Securities and Exchange
Commission and a public-policy professor who once headed the
Health Care Financing Administration are running as independent
candidates for the board of Columbia/HCA Healthcare Corp.,
according to a preliminary proxy statement filed with the SEC.
The two candidates, Steven M.H. Wallman and Howard N.
Newman, are being supported by the SEIU National Industry Pension
Fund, one of a dozen institutional shareholders that are
plaintiffs in a pending lawsuit against present and former
Columbia officers and directors. The suit alleges the defendants
caused or ignored actions that led to Columbia being exposed to
financial risks associated with the current investigations into
alleged Medicare and Medicaid fraud at the company.
Mr. Wallman, 44 years old, was an SEC commissioner from July
1994 to September 1997. He is currently a senior fellow at the
Brookings Institution.
Mr. Newman, 62, is a professor in the health-policy and
management program at New York University's Robert F. Wagner
Graduate School of Public Service, where he served as dean from
1988 to 1994. He was administrator of the HCFA in 1980-81.
Columbia holds its annual shareholders meeting May 14 in
Nashville, Tenn.
