It is a “perfect storm” of corporate governance enforcement. The U.S. Department of Justice has brought a case under the False Claims Act against Christi Sulzbach, the former general counsel of Tenet Healthcare Corp., seeking millions of dollars based upon her actions as chief compliance officer. The case offers an enlightening — and frightening — look at the cumulative impact of some important trends in corporate enforcement in the past two decades. The question is whether this is sensible targeting or government overreaching.
At the heart of the case is Tenet itself, a poster child for both the pros and cons of the 1990s acquisition fever in health care. Tenet was formed in 1995 by a merger of two other health care giants, NME and AMH. It touted its ability to cut costs and increase revenues. By 1999, it owned and operated some 130 hospitals in 18 states. Sulzbach rode that wave: In 1999, she was promoted to GC; in 2002, the year before she left, her compensation was well more than $1 million.
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