Finder's fees. Legitimate activity or ethical quagmire?
In the last decade, healthcare organizations have adopted business methods that have proved effective in other industries. In Catholic, community-based healthcare, however, some of these borrowed mechanisms, such as the "brokering" of facilities for a fee, seem inappropriate. Any corporate officer who benefits financially by brokering the sale of his or her corporation to another may be creating a problem in any of the following legal areas: fiduciary responsibilities and the "business judgment rule," conflict of interest, the corporate opportunity doctrine, private benefit or private inurement. If, in anticipation of a circumstance or transaction, a senior corporate executive or officer dedicates time, energy, and corporate resources to the development of her or his personal benefit without first providing for the corporate interests, she or he probably raises the issue of the corporate opportunity doctrine. The Internal Revenue Code of 1986 provides that an organization which qualifies as a public charity is one in which "no part of the net earnings . . . inures to the benefit of any private shareholder or individual." The Internal Revenue Service has made it clear that a finding of prohibited inurement or private benefit will place an organization's tax-exempt status at risk.
D003132:Commerce; D003220:Conflict, Psychological; D004989:Ethics; D004991:Ethics, Institutional; D006268:Health Facilities / Q000331:legislation & jurisprudence*; D006273:Health Facility Merger / Q000331:legislation & jurisprudence*; D006788:Hospitals, Voluntary / Q000331:legislation & jurisprudence*; D007882:Legislation, Hospital; D014481:United States