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 Part 6: Last dance Sunday, January 24, 1999
On a crisp fall night two years ago, a glittering party was held at the Priory Inn on the North Side. There was music and dancing and much merriment, all for a good cause: to raise money for Allegheny General Hospital’s medical research programs. It was AGH’s annual "Auxiliary Ball’’ and Sherif Abdelhak, its president, was there, accompanied by his wife Marlynn. They made a handsome if somewhat unlikely pair as they spun around the dance floor: Marlynn, with her sunny Midwestern good looks, towering over her courtly husband. While never much of a social animal, Abdelhak always seemed to relish these events, seizing the microphone to announce some new project or promotion to delight the crowd. On this night, however, another side of Abdelhak would emerge. After Mary Warde, the ball’s chairwoman and wife of Dr. Donal Warde, found herself having difficulty speaking over some giddy members of the audience, Abdelhak, resplendent in black tie, strode toward the podium. Then, he leaned into the microphone and in a rough voice said: "SHUT UP." Some people were shocked. But close associates regarded it as a typical flash of temperament from the man who, in the past 10 years, had transformed Allegheny General from a prosperous but staid hospital into the Allegheny Health, Education and Research Foundation, the largest health system in the state, and one with national ambitions. Elegant and well-spoken, sometimes touchingly emotional, the Egyptian-born Abdelhak could become brutal and uncouth if he sensed things were slipping out of control. And in 1996, things were slipping out of control at Allegheny — though few other people knew it. It’s not even clear if Abdelhak himself realized that this festive charity ball, honoring the hospital’s legion of volunteers, would be one of the last he would preside over as Allegheny’s chief. How much of a role did this man’s volatile personality play in the fall of one of Pittsburgh’s most beloved institutions? Was Sherif Abdelhak a brilliant visionary who became a victim of a health care market gone haywire and a board of trustees not willing to stick out a rough patch? Or was he a man with delusions of grandeur, who simply didn’t know when to stop spending money, even when there was none left to spend, a man who could never admit to making a wrong decision and wouldn’t know how to ask for help if he did? Since June, when he was fired just as AHERF was plunging into bankruptcy, Abdelhak, 52, has firmly removed himself from Pittsburgh’s public life. He repeatedly refused requests to be interviewed for this story. Mystery has always been a big part of Abdelhak’s persona, either from genuine reticence or calculation, say many of the dozens of people interviewed for this profile. A few considered themselves to be close associates, even close friends, of Abdelhak’s at one time or another. But none of them could answer this question: "Who is this man, and how could he have done such a thing?" Far from home Of Abdelhak’s early life in Egypt, not much is known, except what he chose to tell his associates: that his family, once wealthy, fell on hard times during the country’s 14-year transition into socialism under Gamal Abdel Nasser; that his father was the director of Alexandria’s railroad system and was divorced from his mother, with whom Abdelhak lived as a teen-ager in Cairo. Life was difficult and uncertain; Abdelhak saw friends and relatives led away in the middle of the night under Nasser’s autocratic rule, never to be seen again.
In 1968, Abdelhak graduated from the American University of Cairo — a school favored by the sons and daughters of the country’s elite — with a degree in economics and political science. He excelled in sports. Small, wiry, and extremely competitive, he raced horses, and would later say he had been a soccer star in Egypt — no small achievement in a soccer-obsessed country. After college, Abdelhak seemed — only temporarily — without direction; there was a 15-month stint as a purchasing trainee at the Gulf of Suez Petroleum Co., followed by 14 months as vice president and general manager of the Salt & Pepper Catering Co. in Cairo. And then he was gone from Egypt, never to return. Two years after graduation, Abdelhak took off for the United States — with his new wife, Mervat, also an AUC graduate. He had definitely married up in the world. His wife was from a family of some wealth and social status — but she was a Coptic Christian. "It was so romantic," says one old family friend. "He risked everything to marry her. A Muslim converting to Christianity — well, you risk death doing that. Of course he had to leave." Did he? It’s not clear that he faced any such penalty, but Abdelhak never fully explained the reasons for his departure, even to longtime associates. Did he fall in with the wrong political crowd? Did he leave to escape military service? What Abdelhak has made clear, however, is that he cannot go home again. Climbing the ladder In 1971, Abdelhak set out from home for the Texas oilfields in search of work, but he stopped in Pittsburgh for a brief visit with some of his wife’s relatives. He saw a classified advertisement for a job at AGH’s food service department, applied, and was hired as a purchasing and control coordinator in the hospital’s dietetics division, buying food, silverware, dishwashing soap — whatever it took to provide meals for the institution’s patients, staff and visitors. Thus began his climb from rags to riches, a story that has evolved into legend at AGH. "I had 10 promotions in 11 years and never asked for one," he proudly told an interviewer in 1988. It was typical overstatement from a man whose drive to succeed became quickly apparent. "I remember the first time I saw him he was working with these big containers of lettuce, standing to see if they were big enough to go through the door," recalls one former colleague. "He didn’t really register, but then, I started seeing him pop up in the oddest places. He was just everywhere, it seemed." In 1973, less than two years after his arrival at AGH, Abdelhak had been made purchasing agent for the entire hospital. For someone with ambition, it was a perfect opportunity: Abdelhak became the man doctors and nurses went to see when they needed that scarce hypodermic unit or EKG monitor. "He was a fixer," recalls a former hospital administrator. " ‘My pleasure,’ he would always say when you asked him for assistance. And he would get you whatever you needed. He became very popular that way." After two years in that role, he was made Assistant Director of Nursing for Administration in 1975. Ostensibly, his job was to serve as a business manager, but other former nursing supervisors saw him more as a foot soldier in the ongoing battle between management and nurses — on management’s side. "He’d spy on us. He’d pretend to be my friend, then he’d go and tell the managers everything I’d said. I found out the hard way I couldn’t trust him," says one former nursing supervisor who asked not to be named. Others recall a man who was the first to volunteer to do the dirty job, or stay late, or go out of his way to help colleagues in a bind. As a new assistant director of nursing in the late 1970s, Norma Gentile recalls having difficulty drawing up staffers’ vacation and work schedules. "I couldn’t get any supervisors to help me calculate [the] formulas. I went to Sherif [by then promoted to associate nursing supervisor] and he did. That was the kind of person he was." Not only did he work long hours, he also went to school. In 1976 Abdelhak received his MBA from the Katz School of Business at the University of Pittsburgh, attending classes on weekends. Even with that punishing schedule, his ascent continued; by decade’s end Abdelhak was a hospital vice president. But almost as suddenly, his career stalled when the hospital’s president, Lad Grapski, was forced out over a scandal involving his part- ownership in an on-site pharmacy; Grapski was replaced by John Westerman, a smooth-talking academic from Minnesota who politely told Abdelhak, by then the acting chief operating officer, that he should go elsewhere for more seasoning. It must have been devastating to be so casually dismissed after such a spectacular rise. At a company retreat in December 1982, Abdelhak told colleagues he was leaving to take a post as CEO at Canonsburg General Hospital, some 16 miles south of Pittsburgh. And, colleagues recall, he had tears in his eyes. In the wilderness In the Western Pennsylvania health care pantheon, Canonsburg wasn’t exactly a major player. But Abdelhak quickly saw its potential. The market in northern Washington County was growing, and Canonsburg was building a new facility. The hospital’s director had left after a falling-out with the board of trustees. The board was looking for someone who would shake things up, or, in the words of a doctor who worked there then, "give Washington Hospital fits." Abdelhak’s three-year tenure got mixed reviews. At the height of the recession in the early 1980s, he came up with a plan to provide free health care for laid-off workers. Another Abdelhak brainstorm, which attracted national news coverage, was the hospital’s "satisfaction guaranteed" program, in which patients would be given refunds for the cost of meals and other amenities not to their liking (excluding, of course, medical care). And already, Abdelhak’s penchant for acquisition was beginning to show He baffled board members when he talked of buying Fort Pitt Bridge Works, an 85-year-old steel fabricating facility that had shut down in late 1981 after a string of losses. Fort Pitt employees and local officials were still trying to interest new buyers, and Abdelhak thought it had potential as an investment for the hospital. The board nixed that one, but, undeterred, Abdelhak came up with a different plan: taking control of West Allegheny Hospital, an osteopathic facility in Oakdale. The hospital was nearly $5 million in debt, but Abdelhak thought it was undervalued and that he could turn it around. With two hospitals, then, he would fulfill the board’s mandate to make Canonsburg a competitor in a growing market. "Vertical integration" was the new buzzword in hospital circles, with big hospitals buying smaller ones, combining operations to achieve economies of scale, so that money could be then directed towards more medical research and education — and more prestige. But for West Allegheny, it wasn’t meant to be. With its 90 beds and negligible patient population (in 1986 it averaged 14 patients), it continued to bleed red ink. "Abdelhak’s ego was such that he figured he could turn around what everyone else thought was a disaster," said a former Canonsburg executive. "You’d be in a meeting and you’d sort of say, ‘How are we going to do this?’ the answer would be always something like, ‘Don’t worry,’ or ‘You don’t understand.’ " But in a quirky twist of fate, Canonsburg’s West Allegheny troubles would soon be solved. Back home at AGH One night in 1986, Mildred Fincke’s telephone rang. "Millie," a deep voice said, "I want you to come home." Fincke, then vice president of patient services at the Medical Center in Beaver, was puzzled. "I’m sorry, but I am home," she told the caller. "Who is this?" "Why, don’t you recognize my voice, Millie? This is Sherif. I want you to be my vice president of nursing at Allegheny General Hospital." Abdelhak could perhaps be forgiven the lapse into sentiment, for he had just achieved his life’s dream: the presidency of AGH. Westerman just hadn’t moved quickly enough to make the hospital into the grand medical research and teaching facility the board had envisioned. Surprisingly, his biggest backer was not board Chairman William Penn Snyder III, who had become something of a mentor, but the medical staff, who remembered how well Abdelhak had managed the move to AGH’s new hospital building. He was a nuts-and-bolts kind of guy, they told the board, a much-needed insider, a doer, not a thinker — and, most importantly, someone who listened and cared about what the medical staff thought. At his first meeting with top officials in April, 1986, an emotional Abdelhak described how "thrilled" he was to be back home. He would stay until the end of his career, he vowed. Right away, Abdelhak appeared to be making all the right business moves at AGH. He announced new productivity measures that required departments to document the cost of care for every adjusted discharge, ordering that it not exceed the general inflation rate for all goods and services in the same year. And if employees met "quality targets" — absolute accuracy on tissue samples, for example — they received bonuses from a fund consisting of money saved from cutting costs. Abdelhak also exhorted his marketing people to find the "hot" — read lucrative — new areas in health care. Luckily for his former associates at Canonsburg, Abdelhak saw dollar signs in none other than West Allegheny Hospital. He bought the money-losing facility in late 1986 and turned it into a neuropsychiatric center — which seemed a smart business move at the time, since mental health services were still being paid for under the old-fee-for-service system. That soon changed. The Allegheny Neuropsychiatric Institute, however, never did turn a profit and was dismantled in the mid-1990s; the building was eventually sold and is now a sub-acute care facility owned by Vencor, a non-profit chain. Today, the West Allegheny episode seems oddly predictive of Abdelhak’s later financial troubles — some fast footwork to cover up a questionable business decision. But it hardly slowed Abdelhak down. Within a year-and-a-half of his return, Allegheny Health Services Inc., AGH’s parent company, would grow from 700-beds to 2,100 beds; the workforce from 4,000 to 10,000, and its operating budget from $200 million to $500 million. And on Dec. 17, 1987, Allegheny finally became the proud owner of a medical school — the struggling Medical College of Pennsylvania in Philadelphia. No expense was spared. Abdelhak went after the best people, hiring surgeons and researchers from Harvard, Emory, University of Pennsylvania and other prestigious institutions; at one point, he even tried to woo pioneer AIDS researcher Robert Gallo and his 125-person staff from the National Institutes of Health. Gallo declined the offer. Locally, he hired people like Millie Fincke, who had started her career at AGH in 1947 and went on to become a pioneer in the field of emergency trauma nursing. "Whatever it takes," he told Fincke, when she asked for money to revitalize the hospital’s troubled nursing program. Abdelhak was practically unstoppable. One former colleague recalls his appearance in the late 1980s before the local Health Systems Agency, which has since been abolished but was once used to approve or disapprove hospitals’ expansion plans. "Sherif stood there, in front of all these heavyweight agency types and told them — he didn’t ask, he told them — that Allegheny was going to embark on some ambitious transplant program and then held his hand in the air, with his thumb and index finger together, and said it would add zero dollars in costs to the system and they just nodded, in awe of this guy. No one challenged him." Lavish living, divorce, scandal Once he gained a foothold in Philadelphia, one of Sherif’s first acts was to order the purchase of a private jet so he and other executives could commute back and forth. After some research, a subordinate told him it was too expensive, way above the cost of flying commercially. How about a cheaper turboprop? Abdelhak cut him off. Turboprops are too noisy and uncomfortable, he said. The subordinate then expressed concern about the public relations ramifications of a not-for-profit buying a "corporate" jet. "I can still remember the look on his face when I said that,’’ said the subordinate who asked not to be identified by name. "He just exploded. He told me I was arrogant, that I couldn’t talk to him that way. He said I didn’t know what I was talking about and threw me out of his office." Abdelhak got his jet. Its door could barely accommodate a stretcher, but he ordered that the hospital’s "Life Flight" emblem be attached to the aircraft, so he could tell the board that the purchase was for air ambulance operations, and only for corporate use between emergencies. The emblem was never affixed to the jet and the board never questioned whether the purchase was cost effective. It was just one more perk in Abdelhak’s newly luxurious lifestyle. He had always loved horses. Shortly after becoming CEO, he became the owner of five prize Egyptian Arabians, with an estimated average worth of $200,000 each. It would be a short-lived hobby. After the 1986 tax laws changed, horse-breeding, like other passive investments were eliminated as tax shelters. Abdelhak sold his Arabians and turned to less-speculative thoroughbred racing. To some, his expensive tastes seem, in retrospect, symbolic of all of Allegheny’s troubles, a clear warning sign of things to come. His appetites appeared to extend beyond horses; in 1988, an apparently chaotic personal life spilled out into the open. At the end of a company retreat for the medical staff Abdelhak stood up and walked toward the stage, muttering something about "shocking" people. "He stood there and announced to us that he was separating from his wife, that things hadn’t worked out between them, and that he was on his own. And then he said that from time to time we might be seeing him with two different women, because he needed escorts to attend certain meetings," recalls one who was present. Then Abdelhak sat down to stunned silence. One of the women he was talking about was in the room, but few people knew it. She was Marlynn Singleton, the hospital’s blonde, effervescent director of public relations, a former KDKA-TV weekend anchor and Miss Ohio/USA. But within a few months, it was abundantly clear that she was involved with him — and pregnant. It also became clear that Mervat Abdelhak wouldn’t give up her husband without a fight. She was an accomplished woman, with a doctorate in information science, and was a top ranking official at the University of Pittsburgh’s department of health records and administration. She also had another son and didn’t want a divorce. Despite the public scandal, support for Abdelhak from Allegheny’s board of trustees never appeared to falter. In 1989, they created a company, Jellico Inc., that would own his $938,000 Sewickley house and he would make lease payments on it. The reason, according to Nancy Wynstra, Allegheny’s former senior counsel, and others, was to keep him in Pittsburgh after Abdelhak said he’d received job offers in New York and elsewhere. Mervat Abdelhak, however, charged in court that Jellico, Inc. was a ploy by Abdelhak and the board to protect his assets from her divorce lawyers. Wynstra says there was no collusion by the board. After the divorce was finalized, records were sealed. Mervat Abdelhak declined to talk to the Post-Gazette about her ex-husband for this article, citing a legal non-disclosure agreement as well as concern for sons. Rich and famous As Abdelhak consolidated his position at Allegheny in the 1990s, his taste for grandeur and power intensifie; in the process, he alienated former allies and new associates. Employees buzzed about the frequent trips to Europe and the Cayman Islands where AHERF’s offshore insurance company was located, about the houses in Sewickley and Florida, about the racehorses that Abdelhak owned. Doctors at AGH, who had been big supporters, complained when he took control of two physican run organizations — an imaging corporation and a surgical center — even though, according to the doctors, there was no evidence of financial mismanagement. "He said it was to prevent self-referrals, but he just wanted the money. And he wanted doctors to be without any levers. Personal control became the issue for him." said a doctor who asked not to be identified by name. In 1990, he insisted that Marlynn Singleton be admitted to the Medical College of Pennsylvania — even though she had not taken standardized medical exams or submitted a complete application. That too caused a controversy, and, according to Margaret Levy, then dean of students, Singleton’s presence there almost led to the school’s lack of accreditation. Singleton ultimately remained in school at the insistence of Levy, who said she was doing well in classes. Singleton received her M.D. in 1995. And in 1993, he had staffers shaking their heads after what was supposed to be a welcome speech at the newly acquired Hahnemann University Hospital medical school in Philadelphia. "He gave a very good presentation," recalls one who was present. "He talked a lot about Allegheny and what its goals were, the values of the system and so on, and by the end of the meeting, everyone was feeling pretty good. "But then, out of the blue, he pointed his finger at the audience and said, ‘Let me end by saying one thing. Don’t cross me, or you will live to regret it.’ " Was it just an unguarded moment, or a real sign of stress from the enormous task of combining operations in Philadelphia and Pittsburgh into one vast health care system? As Allegheny’s roots deepened in the eastern part of the state, Abdelhak had begun to deal with new groups of employees who had no emotional ties or loyalty to the institution he had worked for most of his life. That lack of connection, associates say, frustrated and irritated him. At a meeting in the mid-1990s at a Philadelphia restaurant with physicians whose practices had just been purchased by Allegheny, Abdelhak dismissed questions asking for specifics. "All he said was, ‘If you are loyal to me, I carry you on my back,’ " recalls Dr. Joseph Brezin, who chaired the department of medicine at Allegheny University Hospital, Hahnemann. Doctors snickered at that answer, but the notion that debt defines all relationships was central to Abdelhak’s thinking. He never understood why, for example, after paying doctors so much for their practices they continued to send their patients to other hospitals. Hadn’t he given them ample reason to be loyal to him? In many quarters, he had. Besides money, Abdelhak’s reverence for the average working man or woman at AGH was almost mystical. Allegheny wasn’t just in charge of thousands of employees, it was "blessed" with them. His eloquence could be thrilling. "I just remember feeling so attracted by his sensitivity to what patients were experiencing in a very complex health system," recalls Gloria Donnelly, who was wooed away from LaSalle University by Abdelhak in 1996 to become the dean of nursing at the Allegheny University of the Health Sciences. "He said something that I thought was remarkably insightful, about how complicated it is these days for patients to get in and out of the hospital," Donnelly recalled. "He talked about how we sap a patient’s strength and the family’s strength by inundating them with all sorts of unnecessary personnel. And then he turned to me and said, as dean of nursing, you need to look at its function and how critical it is to patient care, and you need to reclaim what is yours." But as the Philadelphia connection became more complex, there was less and less time for that kind of personal interaction. "I’d run past him on the airport tarmac, and he’d say, ‘Millie, I miss you,’ and I’d say I’d miss him too. But there was never time to talk," recalls Fincke. Certainly, by the end of 1996, some storm clouds were gathering. That year, the division overseeing the institution’s medical practices had lost $40 million. All the things Abdelhak had promised Donnelly — $1 million for pilot research programs — came to naught. But she soon started receiving memos, all hammering at the same theme. "It was always, work harder, work smarter, be more productive...We were getting nothing back but blame," she says. Brezin says he knew Allegheny’s days in Philadelphia were numbered at that 1996 meeting with the physicians, when he pressed Abdelhak for more details, "I asked him, What is your plan to manage these practices, and his answer said it all. He stood there and told me, ‘You can’t stop a freight train going 70 miles an hour.’ " Epilogue When did Abdelhak realize he had overreached? It’s not clear he ever did. But many believe something must have dawned on him during recuperation from abdominal surgery in the fall of 1997. "When he came back, he was a changed man," says one close associate. "I think during that period he had time to think, and really look at the numbers, and it was then he realized that it wasn’t working." Not long afterward, on October 13, 1997, the first major series of Philadelphia layoffs occurred. Abdelhak said it was "the worst day" of his life. Still, he was far from admitting defeat. As 1997’s bad financial news worsened in 1998, he continued to insist — at least publicly — that the system could weather the storm. And he increasingly blamed others for Allegheny’s financial woes. Bad decisions by subordinates had been made while he was in his sickbed. Had he been there, he raged, he would have made the right moves. All during the spring of 1998, there were weekly meetings to try to stem the flow of red ink. He told close associates that progress was being made; but in May, several members of Allegheny’s medical staff told a panicky Snyder that they would contact the news media if Abdelhak wasn’t removed. On Sunday afternoon of Memorial Day weekend, Abdhelhak was called at home by Snyder, who lived nearby and asked that they meet. And then, Snyder fired him. It was a total shock. "He was stunned. He had no inkling this was going to happen," says a close friend. But even that wasn’t the end — not yet. The very next day,May 25, Abdelhak appeared in his office. He seemed shell-shocked, but for the next two weeks he behaved as though he were still CEO, traveling to Philadelphia, meeting with Snyder and members of the board. "It was a very strange time," recalls an associate. "I think he was trying to work something out. He must have believed that even if this was the signal, that, OK, you’re not going to be able to remain here for the next five years, something could be arranged so there would be a graceful exit later in the year, with maybe a party to mark his departure." But at the end of the day on June 5, Abdelhak walked out of his offices at Fifth Avenue Place Downtown, without fanfare. It would be for the last time as CEO. Today, seven months later, Abdelhak is in seclusion, spending his time, friends say, brooding over what he perceives as a grave injustice done to him, unable to believe that he was being held responsible for AHERF’s financial demise. Firing him was a mistake, he tells them; if he had just had more time... Now, he has plenty of time. Abdelhak spends his days puttering in his new house in a less-expensive neighborhood of Sewickley, or running errands to the local Giant Eagle, or coaching his sons’ soccer team, or fending off repeated phone calls from reporters who seek comment every time a new revelation surfaces about AHERF’s troubles. "I am a private person now, and I am trying to make a private life for myself," he says courteously to a reporter who telephones him. Last fall, during a chance encounter at the Home Depot in North Fayette, with a shopping cart full of wooden boards, Abdelhak was asked if he was helping contractors renovate his new house. Abdelhak shrugged. He was doing a few things. "It helps to pass the time," he said, with a faint smile.
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