A state probe into a potential conflict of interest and spending issues at the nonprofit supporting Cook County’s hospital system has closed after no violations were found, though internal strife that launched that investigation has led to roughly half the board’s members leaving over the past year.
Attorney General Kwame Raoul’s office said in a statement it told the Cook County Health Foundation in September it “would not be seeking further information” into allegations of “serious governance issues,” including a potential conflict of interest violation. That effectively closed the book on its investigation.
Of the nine board members who left the foundation in 2024, some had gone public with their concerns that the organization was spending its limited donor dollars to pursue new responsibilities beyond the foundation’s capacity and without proper board sign-off. That money should have instead gone to directly support CCH’s mission to give county residents universal access to healthcare regardless of their ability to pay, they argued.
Those board members ordered up an outside audit from the law firm Riley Safer Holmes & Cancila. Months later and in the middle of the attorney general’s probe, they said those recommendations were not taken up and tried to oust the foundation’s executive director, Sylvia Zaldivar.
“We tried to work with the board and resolve the issues that were raised in the Riley Safer report and internally as a board. Those issues and concerns were not addressed and as a result, myself and others resigned,” attorney William Quinlan, one of those board members, told the Tribune late last month.
Board member Danielle Stilz left the board the same time as Quinlan. She said in her resignation letter that there was leadership resistance to “fully cooperate with the Attorney General’s investigation,” or to remedy the conflict of interest the Riley Safer report highlighted.
Quinlan and Stilz helped spearhead the unsuccessful effort to oust Zaldivar with two other board members in August, according to communications reviewed by the Tribune. An outside attorney for the foundation said the vote — five in favor, one against, and five not voting — was improper because it was conducted electronically. Quinlan noted several other resolutions had been voted on by email over the previous year. He and Stilz resigned soon after, around the same time as two other board members who signed onto the resolution calling for Zaldivar’s firing.
Joseph Flanagan, the board chair, wrote in a frustrated response to Quinlan’s resignation that Quinlan made several unfounded allegations. “Had the Board wished to change Executive Directors it would have done so, but there was no need to do that,” he wrote. “Our leadership carefully manages the Foundation and carefully cares for taxpayer funds while making full disclosure to the Board.”
“Most of those who resigned from our Board did so because of the disruption of Board meetings,” Flanagan wrote. “We expect that many will now rejoin.”
Records suggest one member returned to the board.
In an email to the Tribune, Zaldivar said the board “adopted new bylaws in 2024 following recommendations from legal counsel. These updates are in effect and reflect strengthened governance practices.” But Zaldivar did not elaborate on what had changed.
Last spring, the Illinois attorney general’s Charitable Trust Bureau launched a probe of the foundation following Tribune reporting about potential conflicts of interest, unauthorized spending and missing board input on a potential major revamp of the nonprofit.
Foundation leaders and the head of Cook County Health explored, but abruptly scrapped, an idea to grow beyond CCHF’s historic mission as a modest fundraising entity into a much larger and more complex manager of grants or clinical trials.
The health foundation was founded 15 years ago to support the mission of the county’s public hospitals and clinics. Its annual revenue ranged from $400,000 to $1.7 million in recent years, according to federal filings. The foundation has also received taxpayer funds to administer the Provident Scholarship program, which provides up to $20,000 to medical students and up to $10,000 to other health care students “who are from, and dedicated to serving, underrepresented communities in Cook County.”
CCH’s then-CEO Israel Rocha Jr. and the foundation began discussions in 2023 to expand that role. The foundation paid about $80,000 to two outside law firms to help negotiate a “master services agreement” that would guide future partnerships with the health system.
A group of board members concerned about transparency around those negotiations and potential violations of so-called Shakman rules against political hiring commissioned the Riley Safer review. Their January 2024 report flagged a conflict of interest involving a law firm tied to a board member, “serious failures” to follow corporate governance practices, and trouble tracking down what services another firm provided.
Zaldivar supported the expansion and denied any impropriety, saying last year that the Riley Safer report contained inaccuracies: The board was kept informed throughout negotiations, the conflict was disclosed, and the other outside law firms’ work was necessary and valuable. Foundation leadership was otherwise already aware and addressing governance issues the Riley Safer report raised, she said.
In late April last year, following the Tribune’s report, the AG requested a raft of information from the foundation, including conflict-of-interest policies and statements by officers, information about contracts and payments to law firms, and an explanation about why Riley Safer was hired. The foundation hired two more attorneys to rework its bylaws and to respond to AG requests, internal board communications obtained by the Tribune show. One of those attorneys, retired Cook County Circuit Judge Thomas Mulroy, is now a board member.
In response to an open records request for notices, oversight or enforcement actions, the AG’s office shared only its initial inquiry. It said that “staff from the office’s Charitable Trust Bureau informed the CCHF in a September 2024 phone conversation that the office would not be seeking further information.”
“I can only hope the AG closed the investigation ensuring all those (reforms) were there, and if they didn’t, I’d be very disappointed,” Quinlan said.
What Stilz said should have been straightforward efforts to update bylaws in a small committee became frustrating and unnecessarily costly. The cost for one of the attorneys who helped on bylaws was $17,000 for June alone, she said, on top of the roughly $80,000 for outside attorneys help on the master services agreement. A general “environment of dysfunction and confusion” contributed to her exit, too, she said. Zaldivar did not dispute that figure.
The foundation announced a new board chair, Verlon Johnson, earlier this year, after the end of Flanagan’s term. He still serves as emeritus chair. Zaldivar said the foundation will award $1 million in Provident scholarships this month.
