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Exclusive: Nursing Home Sought Help From Lobbyist Friend Of Governor

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HOLLYWOOD (CBSMiami) – State officials intended to permanently shut down the now infamous The Rehabilitation Center at Hollywood Hills in 2014, when a lobbyist with deep ties to Governor Rick Scott interceded on behalf of the man who wanted to take it over, CBS4 News has learned.

The role of one of the Governor's friends lobbying state officials on behalf of Dr. Jack Michel so Michel could obtain the license for the Hollywood Hills nursing home has not been previously reported.

The nursing home is now drawing intense scrutiny following the deaths of more than a dozen residents after its air conditioning system lost power during Hurricane Irma.

A spokeswoman for Governor Scott said he played no role in the licensing process. An attorney for Michel said the lobbyist, Bill Rubin, "performed routine lobbying efforts in connection with assisting us with the AHCA regulatory process required for licensure."

There is nothing wrong or improper with employing lobbyists, especially in complex cases. Nevertheless, this case reveals the nature of how business is often done in Tallahassee where political connections are the currency of the realm.

In 2014, Michel wanted to buy the nursing home, whose owner at the time, Karen Kallen-Zury, had just been convicted of Medicare fraud and was sentenced to 25 years in prison.

Creditors were moving in prompting the facility and adjacent psychiatric hospital to file for bankruptcy protection.

Michel saw the bankruptcy proceedings as an opportunity to buy the nursing home cheap. In order for the deal to be worthwhile, however, the nursing home and hospital needed to hold onto their state licenses.

Unfortunately for Michel, the state's Agency for Healthcare Administration (AHCA), was set to revoke both licenses, filing two complaints against the nursing home and hospital on February 14, 2014.

Michel sought an audience with then AHCA Secretary Elizabeth Dudek, but his lobbyist at the time was unable to arrange the meeting. So Michel turned to someone with more clout. In April 2014, he hired Bill Rubin, founder of the Rubin Group. Rubin is powerful player in Tallahassee whose ties to Governor Rick Scott are well known.

Rubin had no trouble arranging a meeting between Michel and Dudek, the AHCA Secretary.

And by October 2014, Dudek signed an order reversing AHCA's decision to revoke the license thereby clearing the way for the licenses to be transferred to Michel, who paid $25 million for the nursing home and hospital.

State records show that between April 2014 and September 2015, Rubin's firm was paid between $100,000 and $160,000 by one of Michel's companies. Rubin stopped working for Michel and the nursing home in 2015 when the nursing home sale was finalized.

Political leaders have questioned whether Michel should have been granted a license given the fact that Michel and two former business partners paid $15.4 million to the federal government to settle fraud claims. There was no admission of guilt in the settlement and Michel has always maintained he did nothing wrong.

The decision to hire Rubin as a lobbyist was a simple one, according to Julie Allison, an attorney representing Michel and Larkin Community Hospital, Inc. "Our Tallahassee lobbyist at the time did not have AHCA contacts," Allison noted. "He suggested that we hire Bill Rubin."

She added that "Rubin was recommended as someone who could help us set up introductory meetings at AHCA due to his background working in the hospital industry."

Rubin, who did not return calls seeking comment, represents HCA, the hospital chain once owned by Scott.

Recent news reports have tried to portray Michel and Scott being close. A spokeswoman for the Governor said he does not remember ever meeting Michel.

Allison said Michel recalls only meeting the Governor once, saying: "There is no formal relationship. Again, the Governor was at a hospital event and Jack was one of the hospital attendees."

Sources familiar with the process told CBS4 News that Michel had to commission a study to prove there was a need for additional nursing home beds.

"We believe the decision was made based on an extensive analysis that we commissioned, at the request of AHCA," Allison wrote. "We also demonstrated our ability to fulfill AHCA's license requirements to the satisfaction of AHCA. We went through the rigorous licensing process that all licensees have to go through."

For its part, given the deaths at the nursing home in September, the state is once again trying to permanently revoke the nursing home's license. The nursing home, which is currently closed, is fighting the state. A hearing on the matter is scheduled for January.

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