UNC Health Care board chair took frequent flights on state plane, failed to disclose state business tie

Updated: Nov. 7, 2019 at 7:18 PM EST
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CHAPEL HILL, N.C. (WBTV) – A WBTV investigation has uncovered frequent use of state airplanes by members of the UNC Health Care board, including its chairman, Charles Owen III. The investigation has also found Owen failed to disclose a contract between a company in which he is an equity investor and on whose board he sits that is funding research at the UNC School of Medicine.

The scrutiny over ethics disclosures by members of the UNC Health Care board and of state plane usage by the board and senior executives at the hospital system came following a previous WBTV investigation that found former UNC Health Care CEO Bill Roper—who left to become interim president of the UNC System—had failed, for years, to disclose his seats on and income from two corporate boards.

Under the State Government Ethics Act, elected officials, certain senior staff and appointees to state boards and commissions are required to fill out a statement of economic interest each year. As part of that form, filers are required to disclose any ties between businesses with which they are associated and any state government agency.

Specifically, the form asks filers to disclose the following:

“If you know that any company or business entity listed in 3.C or 3.C(1) above has any material business dealings or business contracts with the State of North Carolina, or is regulated by the State, provide a brief description of that business activity.”

A similar question is asked in a later part of the form.

Undisclosed state business

A review of Owen’s SEI filings show he checked “None or Not Known” in response to each of the questions, despite the ties between a company in which he is invested and UNC School of Medicine.

According to his SEI filings, Owen is an investor in and on the board of an Asheville-based company called Avadim. The company makes a product that helps fight skin bacteria and prevents or reduces infections.

The company’s CEO, Stephen Woody, touted collaborative research between Avadim and UNC in an interview with the Triangle Business Journal in 2016.

“With UNC, we are working on collaborative research studies in the area of wound care,” Woody said at the time.

A summary of the research study shows doctors at UNC were investigating additional applications for Avadim’s product. The study summary also shows the research was funded by Avadim.

But Owen failed to disclose the business relationship between the company in any of his SEI filings, a review by WBTV has found.

Owen did not respond to multiple detailed emails seeking an interview or comment and did not return a voicemail seeking comment for this story.

Previous: UNC System head, former UNC Health Care CEO didn’t disclose corporate board seats that paid millions on ethics forms

A spokesman for UNC Health Care, Phil Bridges, issued a statement that confirmed the company in which Owen is invested has a business relationship with UNC School of Medicine but claimed Owen is not required to disclose the relationship.

“Avadim has funded a clinical trial through the UNC School of Medicine which is part of the University of North Carolina at Chapel Hill, not UNC Health Care,” Bridges said. “This is an important distinction between the University and the health care system as they are not one and the same. Mr. Owen is a member of the UNC Health Care System Board of Directors.”

Bridges did not respond to a follow-up question from WBTV about why Owen did not disclose the business relationship, since UNC School of Medicine is a state agency. He did, however, accuse a WBTV reporter of misunderstanding the law.

Frequent travel on state airplanes

Owen, who lives in Asheville, in among a handful of UNC Health Care board members who commute to meetings using airplanes operated by UNC Air Operations.

UNC Air Operations was established to take medical specialists from Chapel Hill to hospitals and clinics throughout the state, with a goal of providing specialized care in a timely manner who patients who otherwise would have to travel to be seen by a specialist.

But a review of UNC Air Operations records show frequent travel on the state plane by members of the health care board and by the hospital system’s top executives, including to destinations that are between one and three hours by car.

Flight records from January 2019 to September 2019 show board members were flown to six board meetings this year, with one plane flying from Raleigh and making stops in Concord and Charlotte and a second plane flying from Raleigh to stops in Hickory and Asheville.

No other state board—including the UNC Board of Governors—enjoys the perk of private plane travel to board meetings.

Records show the flights cost roughly $8,000 per meeting and the hospital system spent $50,000 in the first nine months of the year shuttling board members to meetings.

In a statement, UNC Health Care spokesman Phil Bridges defended the use of state airplanes to fly board members in for one-day meetings.

“Specifically relating to board member utilization it should be stated that very often, it is actually much more cost effective to transport some of our Board members via plane,” Bridges said. “Unlike most state-wide boards, UNC Health Care holds its meetings in a three-quarter day instead of two full days, negating the need for hotels and other hard travel costs that are reimbursable as part of their volunteer service. Board member flight hours are much less than 10% of the total usage of the aircraft reported for administrative purposes.”

Bridges also said board members needed to use the planes because they are busy.

“Our board is comprised of unpaid volunteers with busy professional schedules who sometimes need the expedience of air transportation,” the statement said.

Why drive when you can fly?

The flight logs from UNC Air Operations also show senior executives at the hospital system taking planes to make trips that could be driven in under three hours.

The records show multiple trips flights to Goldsboro, which is a roughly 90-minute drive from Chapel Hill.

Records also show executives took frequent trips on the UNC airplanes between RDU and Hickory, near where UNC Health Care has a hospital in Lenoir, NC. That drive is roughly two and a half hours.

Records show hospital executives incurred roughly $66,000 flying UNC Air Operations airplanes between January 2019 and September 2019. Between the health care system’s executives and its board, flight records showed a total of nearly $117,000 in air travel in the first nine months of this year.

“Any flights attributable to UNC Health Care are paid for through non-state appropriated funds. UNC Health Care does not receive state general fund dollars,” Bridges’ statement said.

“We are a Health Care System that has 13 hospitals around the State from Hendersonville to Jacksonville,” the statement continued. “Our goal is to further the mission of UNC Health Care across the state while easing the burden of travel time, sometimes to attend meeting at multiple locations on the same day.”

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