By Tony Plohetski
Austin American-Statesman (Texas)
Copyright 2007 The Austin American-Statesman
All Rights Reserved
The relationship between a top Austin-Travis County Emergency Medical Services official and a company that has sold medical equipment to EMS is being reviewed by the Travis County attorney’s office.
EMS Medical Director Dr. Ed Racht in 2003 agreed to advise San Antonio-based Vidacare Corp. as the company developed a device that allows paramedics to inject medicine into a patient’s bones when veins have collapsed. The company also sold Racht 25,000 shares of its stock for $25, according to Vidacare officials and a memo by City Attorney David Smith.
Austin paramedics helped the company test the equipment — Austin was one of many test sites, the company says — and Austin-Travis County EMS eventually purchased 38 of the devices for about $107,000.
City officials said they are satisfied Racht followed state laws and city ethics codes, which prohibit government workers from participating in contract decisions if they have a $5,000 interest in a company.
Vidacare is not publicly traded, so its stock value is not public record. Company officials said Racht’s stock is probably worth about $500.
Assistant City Manager Mike McDonald said he is unsure what prompted questions about Racht’s relationship with Vidacare. He said city officials have asked the county attorney’s office to review the matter “just to have someone from the outside take a look at it.”
County Attorney David Escamilla said he has received a packet from the city about Racht’s relationship with the company but is in the preliminary stages of his review.
Racht said he told his bosses at EMS and the city’s ethics officer that he had stock in the company before the contract with Vidacare was signed. He said he didn’t participate in deliberations about whether the city should buy the company’s device, although he approved an order for the equipment — such orders require a doctor’s signature — after an EMS committee recommended its purchase.
According to a June 2004 e-mail Racht sent to David Gruell, Austin’s assistant director for professional standards, who retired in January, Racht revealed his relationship with Vidacare and said he wanted to avoid “even an inkling of impropriety” when EMS started considering the Vidacare equipment.
He also copied EMS Director Richard Herrington in the e-mail.
In a recent e-mail to the city, Gruell recalled his conversations with Racht at the time.
“Dr. Racht maintained a professional distance from this project until the decision was finalized,” Gruell wrote. “He was not involved and did not influence the decision we passed onto the department director.”
“We checked through everything and were comfortable with what we found,” McDonald said.
Racht said he never intended to get rich from the Vidacare stock.
He said that as a Vidacare medical adviser, he talked to company officials about when the equipment should be used and how.
Racht, a national expert in the paramedic industry who earns about $210,000 a year, said questions about his ethics have hit hard.
“I honestly felt like I was doing — and still do — everything appropriately and legally,” Racht said. “I was very up front with people and talked to them about it. There was no under the table, no secret, no wink-wink.”
Dr. Larry Miller, Vidacare’s founder and chief medical officer, said he asked Racht to serve on the company’s advisory board because “Ed is a well-known, well-respected EMS director.”
“I never asked Ed to use” the product, he said. “I never expected him to use it. I never asked him to endorse it.”
Miller said the equipment was tested by EMS departments in other Texas cities, including Dallas and San Antonio. He said Vidacare has sold more than 100,000 of the devices worldwide.