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Deal Buys Quick Exit at Medical University

Posted on: Monday, 23 January 2006, 15:00 CST

By The Record, Hackensack, N.J.

Jan. 23--Governor Corzine has engineered the ouster of embattled medical school President John J. Petillo, who will get a $600,000 severance package after a little more than a year on the job.

The deal -- struck over the weekend -- was confirmed by an administration source on Sunday. Petillo will step down as president of the University of Medicine and Dentistry of New Jersey at the end of February.

"This was a bureaucracy gone awry," said state Sen. Loretta Weinberg, D-Teaneck.

The exit comes just 10 months after Petillo's lavish inaugural at the New Jersey Performing Arts Center in Newark. There he was praised by leaders of Corzine's own Democratic Party as the best man to lead the sprawling university composed of several schools, institutes, a hospital and affiliated health care services.

The presidency is one of the biggest public jobs in the state: UMDNJ has an annual budget of $1.6 billion. Petillo presided over a roller-coaster year at the school, which was the subject of federal and state probes of misspending and patronage. The university is now under the partial control of a federal monitor because of at least $4.9 million in alleged billing fraud at its University Hospital in Newark.

U.S. Attorney Christopher J. Christie, who brokered the monitor agreement, said there was no evidence of any wrongdoing on Petillo's part. But, while many of the problems at the university predated Petillo, his critics said he carried too much political baggage and was too slow in adopting reforms.

Corzine moved quickly in getting rid of Petillo, summoning him to Trenton for talks during the first week of his administration. The new governor circumvented UMDNJ's board of trustees to make the change. Trustees -- who ostensibly employ the president -- had not yet been apprised of the details of Petillo's departure on Sunday afternoon.

"The governor appreciates the fact that Dr. Petillo has been cooperative in achieving a new start for UMDNJ," said Anthony Coley, Corzine's spokesman. Petillo declined comment.

Cleaning up the mess at UMDNJ -- and the messy headlines it generates -- is a priority for the new governor, say those close to Corzine. The medical university has been a source of patronage over successive administrations -- both Republican and Democratic -- and has largely grown unchecked since its creation by the state Legislature 35 years ago.

"He [Petillo] inherited a culture that existed for decades down there," said former Gov. Richard J. Codey, president of the state Senate.

Weinberg said problems in UMDNJ's central administration often overshadowed the fine work done there in research, education and in providing health care for the state's poorest residents.

Weinberg praised Corzine for acting quickly. "This was a signal that he didn't let this fester," Weinberg said.

An interim successor to Petillo has not been named. Weinberg said she hoped UMDNJ would conduct a broad search for Petillo's permanent replacement.

"I hope this time 'nationwide' is taken literally," Weinberg said. Petillo, who was appointed to the UMDNJ board by former Gov. James E. McGreevey, was chosen as president after trustees spent $350,000 on a so-called nationwide search that wound up in their own back yard in 2003.

Petillo, 58, was the university's third president and the first who did not hold a medical degree. His doctorate is in counseling and personnel services. A former Catholic monsignor, Petillo was the chancellor of Seton Hall University during the 1980s. After leaving the priesthood he held a series of short-lived, albeit high-paying jobs, including president of Blue Cross/Blue Shield of New Jersey.

Those who have watched his long and varied career say he always manages to land on his feet.

Petillo's severance of $600,000 is equivalent to one year's pay. He had just completed the first year of a three-year contract, which was up for review in June.

UMDNJ has had a history of generous severance packages for its top executives. Sidney Mitchell, for instance, was guaranteed the equivalent of two years' pay -- $836,000 -- when he was moved aside as president of University Hospital during the Petillo administration. Mitchell is now president of Pascack Valley Hospital in Westwood.

Of late, efforts were made to rein in some of the spending at UMDNJ -- Petillo just last week moved to take away university cars from executives, including himself. And, late last year, millions of dollars in executive bonuses were suspended. Petillo had fought the move and later relented.

His critics said Petillo was a wily player who too often needed to be pushed into making reforms.

In June, Petillo agreed to resign from the board of directors of a private technical school that paid him between $25,000 and $50,000 in 2004 after the affiliation was revealed in the media. The resignation was finally announced by Lincoln Educational Services on Jan. 1. In the meantime, in July, records show Petillo purchased nearly $60,000 worth of stock in the company at an insider price.

Staffers at UMDNJ were left to wonder Sunday whether there would be more administrative housecleaning to come. Four people -- including the head of the legal department -- were forced to resign over the billing problem.

Meanwhile, Corzine's office is also looking for trustees to fill vacant spots on the university board. Weinberg said she is preparing legislation that would increase the board's membership and reconfigure the panel.

By Patricia Alex and Mitchel Maddux

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Copyright (c) 2006, The Record, Hackensack, N.J.

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Source: The Record - Hackensack, New Jersey

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