Report: Hadassah covered up its failing finances

An investigation by Army Radio raised concern that Jerusalem’s Hadassah Medical Organization, which operates two major hospitals in the capital, attempted to hide the extent of its 2014 financial crisis from the public, its donors and creditors.

Hadassah’s NIS 1.5 billion ($370 million) deficit that year violated its corporate guidelines and Israel’s NGO laws, and threatened to collapse the hospital, accountants warned that September, according to the report.

Hadassah Medical Organization’s economic crisis “raises serious doubts as to whether the hospital can continue to operate,” they wrote in a September 30, 2104, letter intended for the state’s NGO registrar’s office.

According to Army Radio’s investigation, the hospital intentionally kept the accountants’ recommendations from the NGO registrar, and only handed them over when the governmental oversight agency received numerous complaints that the letter was not made available on its website.

The chair of the Hadassah Medical Organization Board of Directors, Erez Meltzer, told the radio station its conclusions were “inaccurate” and that the hospital was not in danger of shutting down.

The accountants’ concerns, he said in comments echoed by the Hadassah Women’s Zionist Organization of America, which owns and fundraises for the medical organization, reflected the lack of a permanent CEO for the organization, a position that has since been filled.

Meltzer said the hospital turned over the recommendation to the registrar right away, and the Hadassah Medical Organization was not responsible if the registrar failed to make the document available to the public.

Since 2008, the hospital — which last year was granted a stay of protection from its creditors, even as it continues to operate at a deficit — has been mired in an economic crisis.

Meanwhile, the financial magazine Calcalist reported Tuesday that State Comptroller Yosef Shapira will recommend the state investigate the women’s organization on suspicion of financial irregularities related to withdrawals of funds from the medical organization in the 1990s.

Hadassah said in response that the claims against the organization were “fallacious,” were published with the intention of “harming the hospital and Hadassah” and “referred to events that allegedly transpired 25 years ago.”

In a statement, the group added that it was “bizarre that the state comptroller hadn’t contacted the Hadassah women’s organization or the hospitals. Had he contacted [us] he would have learned that Hadassah… had conducted itself lawfully.”