In scathing language, UPMC amends counter-lawsuit against city of Pittsburgh, Mayor Ravenstahl

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If Pittsburgh Mayor Luke Ravenstahl's lawsuit challenging UPMC's tax status was a lunge at the giant's wallet, the health care system's response filed Thursday was a figurative scalpel to his eye.

Procedurally, UPMC was just amending its earlier complaint, which alleged that the city of Pittsburgh's challenge to UPMC's tax-exempt status was unconstitutional. Tactically, UPMC's filing seemed to be much more: an effort to link the challenge to both the federal probe involving the mayor and to a union-backed public relations campaign against the health care system.

"The mayor, to deflect public attention, needed a headline," UPMC's complaint alleged. "One way the mayor chose to carry out his strategy to deflect public attention and endear himself with those adverse to UPMC -- who could provide post-public office employment and benefits -- was to immediately reverse the course of longstanding cooperative dialogue with UPMC, and execute a plan to damage it and its supported organizations, and attack."

"I don't see it. I don't understand it and I don't see it," said Ronald Barber, one of the attorneys retained by the city for its court fight with UPMC. "This [city's] lawsuit was filed for proper reasons, to obtain an adjudication of UPMC's status."

UPMC's filing "certainly is interesting, and it's colorful," Mr. Barber continued. "I don't think that a plaintiff's motives are all that important if the plaintiff has a good claim."

UPMC has alleged that there's no merit to the mayor's March lawsuit alleging that the holding company of the hospitals that together constitute the largest employers in the city should pay tens of millions of dollars in payroll taxes because it no longer behaves like a nonprofit. UPMC had the case transferred from state court to federal court, then filed a countersuit claiming that its due process and equal protection rights were being violated by the city's effort.

UPMC on Thursday added as a defendant in the countersuit Fair Share Pittsburgh, which is a project backed by SEIU Healthcare Pennsylvania that has, in a heavy advertising campaign, taken a stance similar to the mayor's on the tax exemption. Also added as defendants were two "John Does" -- as-yet unidentified alleged co-conspirators that UPMC claims will link the city and Fair Share Pittsburgh. John Does can be people or institutions, and the complaint suggested that they may be associated with SEIU and insurer Highmark.

Both the Fair Share Pittsburgh effort and the city's challenge to UPMC's tax-exempt status include echoes of SEIU's and Highmark's positions, the complaint alleged.

SEIU representatives could not be reached for comment. A Highmark spokesman declined comment.

"I don't know anything about that," said Mr. Barber, when asked whether the city's challenge was tied to Fair Share Pittsburgh, SEIU or Highmark.

The complaint saved its most scathing language for the mayor.

It described him as "the potential subject of the federal investigation." The FBI, IRS and U.S. attorney's office have been involved in a probe of city dealings that so far has resulted in the indictment of former police Chief Nate Harper and has come to include grand jury appearances by the mayor's secretary and two of his bodyguards. Federal agents also have obtained documents related to the mayor's home renovations and have sought to interview his ex-wife, who declined.

The complaint said the mayor joined what it called a "propaganda campaign to distract from the public perception that he had committed misdeeds while in office, and to secure future benefits from those who stood to benefit from a well-publicized attack on UPMC.

"By making this allegation [challenging UPMC's tax exemption], the Mayor took a public position that he knew would endear him to a party that was also publicly attacking UPMC around this same time," the complaint continued, "with the expectation that those opposed to UPMC would ultimately repay him for any efforts to damage UPMC while he remained in office."

The complaint noted that the March news conference announcing the lawsuit, and a subsequent interview with a national news outlet explaining it, are among the very few public appearances by Mr. Ravenstahl since his March 1 announcement that he would not run for re-election. "The sole exception to the Mayor's near complete absence from public view has been his continued participation in the unlawful scheme against UPMC," according to the complaint.

"We're not in a position at this point to address any of the allegations," city solicitor Dan Regan said. "I expect that any of the allegations, any of the claims, will be addressed in our responsive pleadings."

In a news release, UPMC spokesman Paul Wood compared the city's challenge to "the IRS's assault on the Tea Party and Nixon's targeting of his political enemies."

According to the complaint, "Any cautionary tales from American history, however, have been wasted on this mayor."

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Rich Lord: rlord@post-gazette.com, 412-263-1542 and on Twitter: @richelord.


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