Emails explain clash between Huntsmans and the U. over Huntsman Cancer Institute CEO’s firing

Records show drafting of a new memo of understanding on HCI’s leadership, funding and operational direction played a key role in Mary Beckerle’s abrupt termination, ensuing controversy

(Trent Nelson | The Salt Lake Tribune) Huntsman Cancer Institute in Salt Lake City, Friday May 12, 2017.

Just hours before Huntsman Cancer Institute CEO Mary Beckerle was abruptly fired in April, she emailed a University of Utah Health Sciences official to underscore her worries that administrators were not living up to a financial agreement struck with the Huntsman family.

“I remain concerned that the process being followed is not consistent with the operating agreement for the [Huntsman] cancer hospital,” Beckerle wrote in an April 17 email about capital expenditures. “With your help, I hope we can address this going forward.”

At about 3 p.m. that same day, Beckerle opened an email from U. President David Pershing; Vivian Lee, then-U. Health Sciences senior vice president; and H. David Burton, U. Board of Trustees chairman. Her termination letter was attached.

“I am very sorry to have to send this to you electronically,” Pershing wrote in the body of the email, “but I understand you are out of town.”

That letter stated the decision to let her go had been made with the full backing of Pershing and the board’s senior leadership. But that didn’t end the matter. Beckerle’s unexpected termination sparked a roiling controversy on the U. campus and beyond, with protests from cancer institute faculty and often caustic remarks from key members of the wealthy Huntsman family, including Jon Huntsman Sr., the institute’s founder and primary backer. Just a week later, Pershing backtracked and reinstated the institute CEO.

Soon after Beckerle’s return, Lee resigned from her three leadership roles in health sciences and Pershing announced he would step down as U. president when his successor is selected. Searches for both Lee’s and Pershing’s replacements are now underway.

Francisco Kjolseth | The Salt Lake Tribune Vivian Lee, CEO of the University of Utah Health Care emerges from a university board of trustees closed executive session following discussions over the recent firing of Dr. Mary Beckerle, the CEO and director of the Huntsman Cancer Institute. A decision on her possible reinstatement is expected later in the day on Tuesday, April 25, 2017.

U. officials have remained mum about the reasons behind Beckerle’s dismissal and subsequent reinstatement, but emails obtained Friday by The Salt Lake Tribune — through a series of open-records requests — appear to shed light on the issues behind the high-profile controversy.

At the time, the Huntsmans and top U. officials were in the process of developing a new memorandum of understanding (MOU), one that would govern relationships among the U., the institute and the Huntsman Cancer Foundation, a fundraising arm controlled by the family. The pact was to replace the latest of seven past agreements since the institute’s founding in 1995, guiding issues ranging from the design of the cancer hospital in Salt Lake City to who interacts with donors.

The MOU being negotiated at the time of Beckerle’s dismissal aimed to address, among other things, the chain of command between Beckerle and the U. president, who had hiring and firing power and the revenue-sharing between the U. and the foundation. On that last issue, judging from emails, a rift began to develop.

One email sent by Charles Saltzman, chairman of the U. Department of Orthopaedics,
to Pershing and Lee on April 23 — just before Beckerle’s reinstatement — details the reasons faculty members in the School of Medicine were given for the firing.

Faculty members were told “that the reason for doing so was to head off the imminent threat of a new MOU from HCI that you could not under any circumstances support because it would radically damage the university,” Saltzman wrote. He noted that no other details were given.

The strong feelings articulated in Saltzman’s email were apparently unknown to key members of the Huntsman family, who said they believed negotiations were going as planned and that Pershing had loosely agreed to the majority of their draft provisions.

Peter Huntsman, foundation CEO, said he was surprised by Beckerle’s ouster because Pershing had planned a trip to Houston to continue negotiations in person. Emails show the two were discussing the scheduling of that meeting less than a week before Beckerle’s termination.

“I would like to take you up on your offer of getting together next week after your return [from Europe] if possible,” Pershing wrote Huntsman on April 11. “I would be glad to come to Houston unless you just happen to be coming to Utah for some other reason.”

The day before, Beckerle received an email detailing changes to her schedule. Lee had cancelled a one-on-one meeting with Beckerle for the third time, the email read, and it had not yet been rescheduled.

Pershing never showed in Houston that next week, Huntsman previously said. Instead, he fired Beckerle.

The morning of April 18, the day after Beckerle was fired, Huntsman emailed Pershing asking if they could speak: “I really want to try to avert a damaging and unnecessary conflict that is about to erupt.”

Pershing agreed to such a discussion, though it’s not clear what was said. Then on April 22, Huntsman emailed Pershing again: “We have entered the battle I hoped we could have averted.”

Huntsman Sr., Peter’s father, went after U. administrators, calling for the ouster of Lee and Pershing. Peter Huntsman’s email had a more conciliatory tone.

“Regardless of what you may think, I really do hope we can have an amicable resolution,” Huntsman wrote. “I have no desire to see you leave and hope we can re-engage and build the institute we both want.”

Peter Huntsman later said in May the foundation believed the U. “has not fulfilled its funding obligations that were agreed to some years ago” — a problem Beckerle appeared to reference in her April email.

Huntsman and Beckerle did not immediately respond Friday to a request for comment on the newly released emails.

Francisco Kjolseth | The Salt Lake Tribune Karen Huntsman, left, joins Mary Beckerle, acclaimed researcher at Hunstman Cancer Institute after she was unexpectedly fired from her post as CEO and director of the Institute. In an email sent Monday afternoon, Vivian Lee, senior Vice President of Health Sciences at the University of Utah announced the departure without reason.

Under the current MOU, signed in December 2014 and not scheduled to expire for 10 years, the U. pays for the operational expenses of the institute — a commitment that cannot drop below $13.5 million. That funding was previously the responsibility of the foundation.

Currently, the cancer hospital keeps 25 percent of its profits. It sends another 25 percent to the university’s health sciences department, and the remaining 50 percent goes to the cancer’s research institute.

At the time of Beckerle’s firing, the Huntsmans wanted the former health sciences share to be sent to the institute for three years because they felt the U. had not lived up to its funding agreement. Starting in 2020, it would once again be sent to university hospitals and clinics.

In his April 23 email, Saltzman addressed the negotiations that apparently had Pershing and Lee so upset, saying he was “concerned, if true, that the MOU would seriously jeopardize the clinical and academic mission of the School of Medicine for many years to come.”

Saltzman asked that all departments heads in the medical school “immediately” be involved in the discussion. “We feel strongly that the success of the HCI cannot come at the expense of the School of Medicine,” he said, adding that they respected many of Beckerle‘s contributions and welcomed collaboration with her.

“Given the grave implications that you indicated on Monday,” Saltzman wrote, ”and the rapidly evolving situation, we need to understand these issues as quickly as possible, and before any new agreement/MOU is entered into with HCI.”

Pershing responded that same day, saying no major decisions would be made without input from medical school department heads.

“In the coming weeks we will be working on a new MOU with the goal of improving the working relationship and also putting some of your current concerns to rest,” he wrote.

Negotiations on the agreement — which included a commitment from the Huntsmans to provide $120 million in new funding for the institute over the next eight years, adding to $130 million already promised — were halted amidst the turmoil swirling around Beckerle’s firing. But when she was reinstated, the Huntsmans and the U. restarted negotiations. Chris Nelson, U. spokesman, said Friday he could not comment on the newly released emails or the negotiations on a new agreement because those talks were ongoing.

Editor’s note: Paul Huntsman, the son of Jon Huntsman Sr. and brother of Peter Huntsman, is the owner and publisher of The Salt Lake Tribune.