While Attorney General Josh Stein and his office have declined to comment on the letter, it was likely sent in response to several appointments made by both New Hanover County and Novant Health’s Coastal Region Board to the New Hanover Community Endowment over the last year — appoints that have disproportionately added more White men to the Endowment’s board.
Lack of diversity isn’t just an issue of optics, it’s a potential violation of the legal agreement that allowed Novant to purchase the county-owned New Hanover Regional Medical Center and which created the Endowment with over a billion dollars in sale proceeds. The initial board, announced in 2020, had 11 members, six of whom were White men. As part of his legal review and approval of that agreement, completed in early 2021, Stein added a requirement for a more diverse board, including two additional members.
As part of efforts to ensure that the Endowment would be a private organization, free from public meetings and records laws requiring transparency, Novant was given the initial majority of appointments — six compared to the county’s five. The two additional seats required by Stein are now appointed internally by the Endowment board itself.
As Stein noted in his letter, “specifically, the Community Endowment's Bylaws were amended to include a requirement that the Board, whose members are appointed by the County and Novant, reflect ‘[diversity that fairly and equitably ensure[s] gender, racial, and ethnicity considerations as well as lived experiences reflecting different rates of educational attainment, economic prosperity, and social mobility.’” [Note: You can find the full letter, below.]
Late last year, a party-line move by the county’s Republican commissioners effectively removed founding members Hannah Gage and Dr. Virginia Adams — the latter being the county’s only appointee of color — despite the recommendation of Endowment Board Chair Bill Cameron, a Novant appointee, who requested that they be kept on. Gage and Adams were replaced with Woody White and Pat Kusek, both former Republican commissioners who supported both the hospital sale and the creation of the Endowment; both are White.
Earlier this year, Novant replaced Michele Holbrook, who resigned unexpectedly with little explanation beyond “personal commitments,” with former NHRMC president Jack Barto. The appointment wasn't formally announced by the Endowment until after it received media inquiries.
Together, these appointments have increased the number of White men on the 13-member board to eight.
Concern over these appointments, along with a rash of abrupt leadership departures — including CEO William Buster, Kusek, and Holbrook — and the Endowment’s scope, transparency, and more, led to the creation of Heal Our People’s Endowment by former Wilmington mayor and Democratic State Senator Harper Peterson. In April, the group sent a letter to Stein, outlining their concerns and asking the Attorney General’s office to address them.
While serving in the State Senate, Peterson was highly critical of the hospital sale process — and his current organization evolved from Save Our Hospital, which opposed a sale. He’s recently turned to pushing Stein to take a stronger hand in overseeing the Endowment.
Earlier this month, Heal Our People’s Endowment again wrote to Stein — just a week before Stein wrote his ‘reminder’ to Novant and New Hanover County. [Note: You can find Heal Our People’s Endowment’s letter, below.]
While the timing lines up, there’s little other evidence the organization was the impetus for Stein’s letter; Stein declined to comment and Peterson told WHQR he hasn't heard back from Stein in the three months since Heal Our People’s Endowment first reached out.
Stein’s letter and responses
Stein’s letter was sent on Friday, June 21 by Deputy Attorney General Sarah Boyce to legal counsel for the New Hanover County Board of Commissioners and Novant. While the letter does reference the requirements of Stein’s approval of the sale, the tone is moderate, stopping short of admonishment for any specific appointment.
“Please allow me to remind you of your client’s obligation to appoint Board members who reflect New Hanover County’s diverse population,” Stein wrote.
The letter makes no mention of what, if any, potential legal action Stein and his office could take. While Stein’s office did express “serious concerns,” regarding the appointment of White and Kusek, and has on several other occasions noted it is continuing to follow the issue, it has repeatedly declined to comment on possible legal recourses.
Most of the county commissioners did not respond to a request for comment sent Thursday afternoon. Commissioner Dane Scalise directed WHQR to his email response to Boyce.
“The New Hanover County Commission fully abides by its obligations under the law. Indeed, Mr. Stein does not accuse anyone of failing to do so in his letter. As such, it is hard to read this ‘reminder letter’ as anything other than political gamesmanship, which is regrettable and should be avoided in the future,” Scalise wrote.
In an oblique statement, a Novant spokesperson said only that Stein’s letter had been shared with the local board.
“We’ve shared the attorney general’s letter with the coastal region board. It is this volunteer-led group that is tasked by endowment bylaws to select six of 13 endowment board members,” the spokesperson said.
WHQR asked if that board had any comment, but Novant did not respond.
During a recent public meeting held by the Endowment, Cameron addressed an audience question about diversity, noting that the Endowment board only appoints two members — both of whom, currently, are women of color — and said it "would be nice" if concerned parties contacted the county and Novant about their combined 11 appointments.
Peterson said that while Stein, a Democrat, is facing Republican Mark Robinson in a tough and time-consuming race for North Carolina Governor, there are still unaddressed concerns about the Endowment.
Peterson added that he approved of Stein’s letter to Novant and New Hanover County, but hoped Stein would take additional action, including a public audience with county residents.
Peterson’s statement in full:
Without context (the sudden and surprising resignations and questionable reappointments of Board members) we still welcome, as a first step, the AG’s “reminder” letter to the County and Novant that their “obligation is to appoint Board members who reflect New Hanover County’s diverse population.”
We believe there are many more serious concerns (attachment)germane to the management structure and performance of the Endowment Board that need immediate attention and have repeatedly asked the AG, per his statutory responsibility, based on “cy pres” doctrine and state charitable trust law, to intervene.
We have reached out to AG Stein, through personal contact and formal requests, and have heard nothing back in over three months.
At the very least an audience with citizens to hear their concerns would be welcome.
We understand that he is engaged in a competitive political race, but his first priority must be to the citizens he has sworn to protect as long as he is our Attorney General.
