In the end, the hospital was closed.
The gates were locked and splashed with red graffiti. The sophisticated medical equipment purchased by American taxpayers was transferred to a consortium of Middle Eastern businessmen.
The X-ray labs built with monthly checks from Americans who wanted to heal crippled children–those changed hands in the time it takes to sign a $6 million deal.
Children with congenital bone disorders were handed over to clinics they couldn’t afford or local physicians who lacked the expertise to repair their twisted limbs, West Bank physicians say.
The white walls of the Mount of David Crippled Children’s Hospital still rise atop the bluff that looks down over this ancient city, but no longer as a symbol of American goodwill. The empty building is a remnant of crushed dreams.
“Whenever I pass that hospital I don’t want to look at it even, because it causes me great pain and sorrow,” said Dr. Sameer Zananiri, who was a surgeon there from 1977 until 1995. “You ask me why it had to be closed. We don’t have any idea,” Zananiri said. “There are some mysteries in that subject.”
The Kansas City, Mo.-based charity that built this hospital raised money to run it with a heart-stirring television commercial that showed a hobbled Arab girl limping through dusty streets while the children around her ran and skipped.
“Now, for only $12 a month, through Children International, you can give the gift of healing to a crippled child,” said the commercial that aired in the 1990s. “Call now to sponsor a crippled child for only $12 a month.”
The annual reports sent by Children International to the sponsors who called its 800-number only add to the questions about where the money went. The charity’s reports and tax filings did not tell sponsors that the hospital was shut in 1995 then sold 18 months later, nor did they spell out how the $6 million sale proceeds were used.
There is only a note in the fine print of the report for 1995, the tumultuous year when the hospital was closed. It said:
“Holy Land activities were reduced and the Hospital activities were suspended pending an evaluation of the children’s charitable programs in that region.”
Another story lies between those lines.
Financial returns clashed with religious values when Children International pondered whether it should close the hospital’s doors or continue funding the facility. Palestinian officials and international aid groups scrambled to keep the hospital open to strengthen the West Bank’s overburdened and archaic health-care system. But in Kansas City, tough business decisions were made.
Children International President James R. Cook declined to comment on the hospital or the organization’s operations. In letters to U.S. government officials, charity executives expressed anguish over the hospital’s closure and said they reached the decision only after reckoning the best way to help the most Palestinians.
“It is a painful and difficult decision,” then-Chief Executive Officer Joseph Gripkey wrote to the Arabic-language Al-Sanaye magazine in January 1995. “Many children will remain crippled, and that is sadly true whether our hospital is open or not.”
Gleaming facilities
For decades those children and their families flocked to this ancient hill where Children International operated a 3-acre complex of clinics and dorms that it called the Holy Land Christian Mission.
Designed by American architects and built in 1982, the $5.4 million hospital was financed in part with $2.2 million in U.S. government grants and a special $1.6 million emergency appeal to sponsors, U.S. Agency for International Development records show.
Here, in the blue-tiled operating theaters gleaming with the latest American technology, thousands of youngsters were freed of their deformities.
In addition to the free, state-of-the-art hospital, Children International ran a small orphanage and rented local homes that it used as classrooms and dormitories. The buildings overlooking Manger Street were laced with crosses and religious insignias. At night, a star of lightbulbs shone above the highest roof.
But some who lived and worked there saw the expansive complex in a different light.
Former Bethlehem Mayor Elias Freij spreads an aerial photograph of Mt. David across his desk and runs a finger over the land he helped Children International’s founder, Rev. Ralph Baney, acquire so many decades ago.
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Touring the Midwest in a trailer, Baney was raising more than $1 million a year by 1965 with a “person-to-person” fundraising appeal that foreshadowed current techniques of child sponsorship.
But Baney’s complex mixture of high ideals, moral lapses and self-righteousness instilled the mission with a reputation that lasted long beyond his tenure.
Court records filed in Kansas City and Washington, D.C., during the 1970s, for example, show that Baney gave lavish perquisites to members of his family, offered one surgeon $21,000 if he could persuade a woman to drop a wrongful death lawsuit against the mission and lost the charity’s tax-exempt status from 1967 through 1971 because he used donations to buy Tennessee stallions and a luxury yacht. Eventually, he was forced to resign from the charity. He died in 1989.
Before he left, Baney hired Dr. Ahmad Zuaiter as his chief surgeon in 1970, in the midst of an employee strike. The scion of a prominent Palestinian family, Zuaiter proved a brilliant acquisition. Given honorary titles by the British orthopedic hospitals where he worked after graduating from Cairo University, Zuaiter performed the Middle East’s first total hip replacement in 1972 and developed a crescent incision named the “Z Operation” that corrected some clubfoot deformities with a single operation, rather than the usual two or more.
Family business
Zuaiter didn’t come to the hospital alone. His brother Bassem was made mission administrator and a third Zuaiter brother ran a for-profit pharmaceutical supply company that provided the hospital with medicines and other necessities–a practice that aroused questions of favoritism among the staff. Two other brothers were given medical training at the facility.
It is “our culture here to employ relatives,” Bassem Zuaiter said in an interview. “We are doing our business as the Zuaiter family in Mt. David hospital, proper, strong, with all regulations and official papers needed and required by law.”
Children International compensated Zuaiter and his brother Bassem in ways that were not disclosed to sponsors and U.S. government authorities, records and interviews show.
Internal charity payroll records indicate Zuaiter was paid roughly $230,000 for the year of 1992, and Bassem Zuaiter was paid about $51,000.
Tax laws require charities to report all payments to their officers and top-earning employees and contractors. Bernard Pope, the charity’s treasurer until his April 1993 resignation, said he could not explain why Dr. Zuaiter’s compensation was not listed on the charity tax forms.
As part of his regular mission duties, a charity-paid engineer attended to Dr. Zuaiter’s private house, repairing the boiler and washing machine, Dr. Zuaiter said. “Everything was done by Mr. Gripkey’s instruction, not me,” he said. “There is nothing that is done not approved by Kansas City.”
The mission also paid the rent on a private clinic Zuaiter ran from a storefront across the street from the hospital, rent receipts and lease papers show. From there he referred some children to the mission hospital, where they would receive free treatment.
In Bethlehem, frictions developed between the mission and some of its neighbors.
Children International rented more than a dozen buildings from local families, paying small amounts under local laws that make leases difficult for landlords to break. To remove the mission from a non-descript house he owned with a partner, Bethlehem attorney Elias Zraikat said he was forced to pay the mission $50,000. His official receipt, dated Oct. 14, 1995, shows the money was “on account of donation.”
But that very day, mission officials filed papers terminating the lease and giving Zraikat and his partner the keys of their property. “It wasn’t a donation, it was blackmail,” Zraikat said in an interview.
Bassem Zuaiter said the $50,000 payment was a gift and the charity never extorted “key money” from any of its landlords.
Others complained as well. Among them was a Pennsylvania engineer who in January 1996 notified U.S. Rep. Curt Weldon
(R-Pa.) that mission officials had demanded “key money” to vacate a Bethlehem apartment the engineer’s brother-in-law had rented to the mission at a fraction of
the market rate “because he felt he was helping sick and needy children.”
Rosy picture
As they applied for federal funds in the fall of 1994, Children International officials painted a rosy picture of the hospital’s finances.
“We have met the annual hospital budget of $3,224,075 without a deficit, as in previous years,” charity officials reported to the U.S. Agency for International Development in September 1994, as part of their successful effort to secure a grant of more than $200,000.
But other records and interviews show charity officials were at the time quietly preparing to close the hospital, and they would later assert that it had been operating at a deficit for years.
Dr. Zuaiter said in an interview that he learned the hospital would have to be closed in August 1994, about a month before the report to the USAID.
A January 1995 State Department cable said charity officials had been considering closing the hospital “for three years.”
The official announcement was made on a Wednesday morning three days after Christmas 1994. Dr. Zuaiter assembled his staff and told them the hospital would close by the end of May, and Gripkey notified Palestinian officials that day.
The charity’s collections from donors had been dropping every year, “while our expenses have not,” Gripkey explained in his letter to Palestinian officials.
Gripkey wrote that the hospital’s closing would enable Children International to continue its other Holy Land activities: the orphanage, emergency relief and Widow’s Aid.
The day Gripkey’s letter arrived, Palestinian Authority President Yasser Arafat dispatched Jerusalem doctor Nabil Al-Jabari to find a way to keep the hospital open. Al-Jabari immediately faxed Gripkey, saying he wanted to meet and discuss how “we might overcome the problems so the hospital can carry on functioning.”
A few days later, the Palestinian Authority’s minister of health, Dr. Riyad Za’noun, wrote to Gripkey, saying the Palestinian government and people “stretch out their hands to you . . . to rescue the hospital to overcome the deficit in its budget.”
Za’noun proposed a meeting with U.S. diplomats, offered to marshal the aid of friendly countries and suggested remedies such as reducing treatment costs, accepting payments from government health programs and private insurers or even charging small fees for services.
Gripkey responded the next day–Friday, Jan. 13–with a three-page letter explaining that he appreciated the offer of support, “but you need to know that there just is no practical alternative to closing the hospital.”
“If we have to tell donors that it is no longer a free charitable hospital, but a hospital that accepts fees for services, insurance payments and other sources of revenue, the charitable contributions will stop.”
A few weeks later, in February 1995, the Kansas City Star reported that the hospital had been seized by Palestinian officials. The Palestinians “told employees of Children International to clear out of the organization’s Holy Land Christian Mission,” the story said.
“It’s like taking 8 acres in downtown Dallas,” Gripkey told the newspaper.
Legal disputes
Another account is given in State Department cables and files from the Agency for International Development.
One State Department cable shows Palestinian officials contacted U.S. diplomats with allegations that “Children International had been negotiating with a buyer interested in converting the building into a hotel, which meant the hospital would be closed completely, rather than turned over to another organization interested in continuing the operation.”
Children International had “no right to sell the hospital, pocket the money and simply walk away,” Bethlehem Mayor Freij argued, according to a January 1995 cable.
On Jan. 14, the Palestinian Cabinet passed a resolution revoking Children International’s authority to run a charity within the West Bank and appointed an interim committee to run the hospital. Palestinian officials said the action was prompted by evidence that the charity was selling off mission assets without government permission, in violation of Palestinian law–a legal interpretation mission officials vigorously disputed.
Before the closure, Children International had sold off two separate parcels of land to local developers, earning as much as $1 million or more from the sales, according to Palestinian attorneys, landowners and officials with knowledge of the deals. The sale dates and prices are not itemized in mission reports.
When he heard about the Cabinet’s decree, Gripkey ordered Dr. Zuaiter to close the hospital and dismiss all the employees, according to a State Department cable. Zuaiter released 32 employees on Jan. 15 and made arrangements to dismiss the rest as soon as he could give them severance pay, one cable shows.
Hospital employees say they arrived for work on Jan. 16 to find the doors padlocked from within by Children International.
“The black day, as I say, was Monday,” head secretary Nawal Zeidan said. “The hospital was not closed by the Palestinian Authority, but by Kansas City.”
“We went Monday to resume our work and found the hospital doors locked the night before by big locks and nobody was allowed to go in,” recalled chief anesthesiologist Dr. Fouad Alfi, who worked at the hospital for 21 years. The patients had been evacuated.
U.S. diplomats worried “that Gripkey’s sudden closing of the hospital . . . will be regarded as his acting in bad faith,” a Jan. 17, 1995, U.S. consulate memo said.
There was cause for worry. That day, Palestinian officials did seize the hospital, putting its assets and operations in the hands of a committee of curators.
The seizure was followed by blustery letters in which mission and Palestinian officials each depicted themselves as servants of disabled children. Gripkey persuaded the State Department to champion the cause of his American charity, correspondence shows, and after a month of legal and political maneuvering, Palestinian officials in February 1995 signed papers returning the hospital. Children International began the arduous process of trying to sell it.
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A sale to a hotel or office developer might have generated quick profits, Gripkey stressed in 1996 letters asking federal officials to waive the government’s interest in the equipment, but he had tried to sell to a religious group that would continue the hospital’s operations, since that would protect the trust of the donors who every year give money to Children International.
Over the 15 months that Children International negotiated with potential buyers, officials from two major charities said they came close to buying the hospital and keeping it open as a free facility for the poor. But they said Children International broke off negotiations in the final hour in favor of the for-profit Middle Eastern consortium.
HOPE Worldwide Ltd., a Pennsylvania charity funded largely by the International Churches of Christ evangelical movement, was prepared to offer $6 million for the hospital, Executive Vice President Patricia Gempel said. But Children International told HOPE the deal had been clinched already by the for-profit Jordanian consortium that closed the deal for the same price a few months later, in May, Gempel said.
“We looked at Children International’s books, and Children International was doing a good job,” Gempel said. “Joseph Gripkey put a lot of hard work into that place. But I think he got tired of fighting the battle.”
After the Bethlehem opportunity closed, HOPE turned to managing the 80-bed Sihanouk Hospital in Phnom Penh, Cambodia, offering the type of free services it would have provided in Bethlehem: an orthopedic surgical unit with an emergency ward, diagnostic labs, an intensive care unit and clinics.
Similarly, Dr. Pietro Conti, a director of the multimillion dollar Italian charity that runs the San Raffaele Hospital in Milan, said Children International broke off discussions with his group in the first months of 1996. “We don’t know why,” Conti said. “Everything stopped.”
Jordan-based Medlabs-Palestine consortium purchased the hospital on May 27, 1996, Gripkey said. By August 1996, Children International had “banked the $6 million sale price in Kansas City,” a diplomatic cable said, although some aspects of the deal remained unresolved because the new owners had trouble getting their license from Palestinian officials who wanted the hospital to offer free services.
Medlabs executives plan to create a for-profit hospital that would specialize in cardiac surgeries and other complicated procedures.
Gripkey said in the telephone interview that the San Raffaele foundation could have come up with the money to purchase the hospital–“They’re a huge organization”–but he said HOPE Worldwide “didn’t have any money.”
Either could have taken over the facility, Gripkey said, “if they would have come to the table with the right amount of money.”
In letters seeking to marshal U.S. government support against the Palestinian seizure, Gripkey had emphasized that the hospital’s equipment belonged not to Children International but the U.S. government, which had provided the hospital with roughly $5 million in grants.
USAID, an arm of the State Department, had financed everything from bedpans to electrocardiograph systems. A $60,000 state-of-the-art anesthesia dispenser was delivered to the hospital just days before it closed, according to federal records and interviews with Dr. Zuaiter and other hospital officials.
But Children International later requested “the necessary deviation from the relevant grants,” and asked USAID officials to waive the government’s interest in the equipment so it could be transferred to the Middle Eastern buyers, federal records show.
Employees said the U.S. taxpayer-financed anesthesiology machine was turned over while still packed in its crate.
Gripkey declined to answer questions about the hospital or its finances, but he said in a telephone interview that it would be absurd to suggest that Children International kept procuring taxpayer-financed medical equipment in order to boost the value of the hospital before the sale.
“Some pissant $60,000 machine on a multimillion-dollar complex–give me a break,” he said. “You have some facts but not much truth and that’s a problem.”
Mission in action
After the hospital was sold in 1996, a skeletal staff of five remained to dispense alms, handing out plastic bags of groceries and hundred-shekel bills to Palestinians.
Asked if a visitor could see the mission in operation on a typical day, Bassem Zuaiter’s voice took on a magnanimous boom and thick, British accent.
“Righty!” he said. “Right-o! Of course.”
Two days later, at the appointed hour of 10:30 a.m., the mission’s courtyard was thronged by nearly 100 elderly women in long, black dresses with bright stitching on their chests and white scarves covering their hair.
Crowding the mission door and holding out their Palestinian identity cards, they formed a sea of impatience, a folkloric postcard run amok.
Sixty-year-old Hadijeh Mohammed, who had been waiting since 8 a.m., said she had never been to the charity before, but when she heard from neighbors the mission was passing out plastic bags of groceries, she walked an hour from a nearby refugee camp.
Her neighbor, Farizeh Attiyeh, 85, said she had come to the
mission for Widows Aid assistance once before, about two months ago, and was told that workers would investigate her case to determine if she really needed help. No one ever got back to her. Attiyeh had also heard from neighbors that food would be passed out on this day and had chanced the $1 fare for a shuttle van to the mission headquarters.
Only four of 21 women interviewed said they received monthly handouts of groceries. Bahiyeh Abdallah, 68, said she has been coming for seven years and the 100 shekels she gets every month is her only income. The Israeli cash is worth about $30.
During July, mission records showed, 178 women were given bundles of food and cash, an average of about six a day.
Asked for more detail on the program, mission assistant Dia’ Qash’am scrolled slowly through her computerized list of the 3,121 people who received baskets between May 1 and Aug. 26, 1997.
Not all of them were widows.
The mission gave 54 grocery bags to the Beit Jala Police, 44 to the Beit Sahour Police and another 38 to the T’qo police, the computer showed. Other Palestinian police departments got a total of 214 baskets.
“They are in need,” Bassem Zuaiter explained with a shrug. “They are citizens. We are not differentiating by position.”
The Bethlehem recorder of deeds got five baskets. “He has a big family and children,” Bassem said. “He is a supporter of his parents.”
“Most people are not widows,” Zuaiter acknowledged. “The others are needy people.”