Tuesday, May 6, 2008

Double Shot of Carlyle


While viewing a story on the Carlyle Group's establishing a Quality Committee for huge long term care provider, ManorCare, an annoying pop up invited me to complete a short survey on the use of the website. It came from Nielsen, another Carlyle affiliate.

After declining their invitation, I found one of the three member committee overseeing quality is Gail Wilenskey, a former board member of ManorCare and head of Medicare/Medicaid under Bush 41. Her vote was necessary for Carlyle to close the transaction. Given the political heat generated by the sale, Gail's influence likely facilitated the current Bush administration's pre-Christmas approval of the deal.

Gail also made out like a bandit from the sale. Her ManorCare stock holdings comprised 27,205 shares and her gross proceeds from Carlye were $1.4 million dollars. This hardly makes Ms. Wilensky the impartial quality assessor needed by long term care patients and their families.

For a list of Gail's other holdings, UnitedHealth Group, Gentiva, Cephalon, SRA International and Quest Diagnostics, check out the SEC's Edgar website. On December 12th, Gail flipped her UnitedHealth stock options for a huge gain. Her 25,000 shares cost an average of $11 a share. She sold them for $57.40, grossing $1,165,000.

Carlyle's check came on December 26th, making the holiday season a banner financial one for Gail. In two weeks time, she garnered $2.565 million. That won't make the news, much less a Nielsen survey in today's world. But ManorCare does have a quality committee.

Don't you feel better knowing the private equity underwriter (PEU)that couldn't rescue hospital patients from one of its twenty one LifeCare facilities in the Katrina disaster, now owns five hundred long term care facilities? Was Gail aware of this fact when she voted for buyout or when she agreed to serve on HCR ManorCare's Independent Advisory Committee on Quality, a three-person panel convened to provide recommendations and advice to the ManorCare Board of Directors?