In the Matter of the Complaint Against

BORINQUEN UNIVERSITY
Post Office Box S-4068 at
Old San Juan, Puerto Rico 00905

and

BORINQUEN UNIVERSITY at
Old San Juan, Puerto

P.S. Docket No. 6/14;

APPEARANCES:
Frank Carbo, Esq.
DeDiego 309 (P.D.A.) 22
Sancturce, Puerto Rico 00912
for Respondent

Thomas A. Ziebarth, Esq.
Law Department
U. S. Postal Service
Washington,DC 20260

POSTAL SERVICE DECISION

This proceeding is before the undersigned on appeal by Borinquen University, the Respondent herein, from an Initial Decision issued by Chief Administrative Law Judge William A. Duvall. That Initial Decision found that certain advertising representations alleged in paragraph 3 of the Complaint were in fact made by Respondent and are in fact materially false. Those representations were specifically that:

"(a) BORINQUEN UNIVERSITY has the physical facilities, faculty, finances, staff and curriculum necessary for the operation of a bona fide Medical School;

(b) BORINQUEN UNIVERSITY has, or will have a bona fide Medical School in operation offering a four-year American Medical Studies program with classes commencing in September 1977;

(c) The BORINQUEN UNIVERSITY Medical School is currently approved by the Department of Public Instruction of the Commonwealth of Puerto Rico;

(d) BORINQUEN UNIVERSITY Medical School will be operating with a provisional accreditation of the Council of Higher Education in Puerto Rico; and

(e) BORINQUEN UNIVERSITY Medical School has applied for accreditation and expects to receive a 'letter or reasonable assurance' (viz., a kind of provisional accreditation) during its first academic year from the Liaison Committee on Medical Education of the Association of American Medical Colleges and the American Medical Association."

Judge Duvall accordingly recommended the issuance of a mail stop order under the provisions of 39 United States Code § 3005.

Respondent has taken three basic exceptions to the Initial Decision. These are that:

"(1) The evidence presented does not substantiate the charges made against Respondent.

(2) Much of the quoted evidence in the Initial Decision is not true or is contradicted by the same person giving the testimony.

(3) Evidence of 'tapping' or 'bugging' by a Postal Inspector was mentioned without giving it the importance and/or meaning it really has, namely a violation of Respondent's civil rights, an abuse of power by complainant and proof that there is a conspiracy between the Liaison Committee and complainant, and more directly the Postal Inspector who filed the complaint, to stop Respondent from continuing its medical school program."

Respondent's argument under each exception contains subsidiary points of exception. Each will be taken up separately in treating with the exceptions.

EXCEPTION I

The first part of this exception is the contention that Respondent does not make the representation alleged in paragraph 3(a) of the Complaint ("BORINQUEN UNIVERSITY has the physical facilities, faculty, finances, staff and curriculum necessary for the operation of a bona fide Medical School"). It is to be noted that Complainant's Exhibit 4, which is an advertisement in the New York Times on April 17, 1977, is contained in the section entitled "Medical Schools." Also Complainant's Exhibit 6, the "Dear Applicant" letter used by Respondent, does indeed convey the impression that Borinquen University has the necessary essentials for the operation of a bona fide medical school. Moreover, from the thrust of the oral representations made by representatives of Respondent to prospective students, as reflected in the testimony of record and the size of the initial financial investment required of the prospective students, it is implicit that what is being held out is substantially more than bare hopes for the future. The second part of the first exception is the contention that Respondent does not make the representation alleged in paragraph 3(b) of the Complaint ("BORINQUEN UNIVERSITY has, or will have, a bona fide Medical School in operation offering a four-year American Medical Studies program with classes commencing in September 1977"). Respondent argues that if as a matter of fact one feels from the advertisements that in four years a complete American Studies program is promised and intended there might be a basis for the finding but the Complainant must wait four years to see if the promise is kept or not. On the contrary, however, it is clear from the exhibit Judge Duvall relies upon that the ordinary person would be led to believe exactly what is alleged. The third part of the exception is the contention that Respondent does not make the representation alleged in paragraph 3(c) of the Complaint ("The BORINQUEN UNIVERSITY Medical School is currently approved by the Department of Public Instruction of the Commonwealth of Puerto Rico"). The Dear Applicant letter, attached as an appendix to the Initial Decision, on the letterhead of Borinquen University makes the direct statement that "We are currently approved by the Department of Public Instruction of the Commonwealth of Puerto Rico." The principal subject matter of the letter is the medical school. The letter's added mention that Borinquen University is preparing a presentation to the American Medical Association and American Association of Medical Colleges to ask for accreditation further serves to emphasize the alleged representation which is broad enough in context to include the School of Medicine.

The fourth part of the first exception relates to the representation found in paragraph 3(d) of the Complaint ("BORINQUEN UNIVERSITY Medical School will be operating with a provisional accreditation of the Council of Higher Education in Puerto Rico"). Respondent's position here is that a license to operate is equivalent to provisional accreditation. Mr. Luis E. Gonzales Vales, the Executive Secretary of the Council on Higher Education of the Commonwealth of Puerto Rico, testified that Respondent never supplied the necessary documents to permit the Council to consider issuance of a license. Nor does the "grandfather" clause of Public Law 31, discussed at pages 30 and 31 of the Initial Decision, help Respondent because of its dubious applicability and also because a license is not tantamount to and does not imply accreditation which is a separate and distinct procedure (Tr. 46-47). This would appear to be especially true where the particular license was mandated by a "grandfather" clause and involved no independent review by the Council. In addition, as Judge Duvall pointed out at page 30 of the Initial Decision, the Executive Director of the Council testified that the Council does not grant provisional accreditation (Tr. 2-47). All of this requires rejection of Respondent's contention that takes issue with the conclusion of material falsity in its advertising claim that Borinquen University Medical School will be operating with a provisional accreditation of the Council of Higher Education in Puerto Rico.

The last part of Respondent's first exception is related to the representation alleged in paragraph 3(e) of the Compliant:

"BORINQUEN UNIVERSITY Medical School has applied for accreditation and expects to receive a 'letter of reasonable assurance' (viz., a kind of provisional accreditation) during its first academic year from the Liaison Committee on Medical Education of the Association of American Medical Colleges and the American Medical Association."

Respondent, on pages 8 through 10 of its appeal brief, cites certain portions of Dr. Schofield's deposition which it contends in effect support the truth of the representation. In so doing it elevates the consultation visit of the Liaison Committee on Medical Education of the Association of American Medical Colleges and the American Medical Association to more that it was in reality. Furthermore the expectation of receiving any "letter of reasonable assurance" from that group was completely unwarranted when the record is viewed as a whole. The Chief Administrative Law Judge's conclusion that the representation contained in 3(e) of the Compliant is materially false is fully supported by substantial evidence.

EXCEPTION II

Respondent's second exception is that "much of the quoted evidence in the Initial Decision is not true or is contradicted by the same person giving the testimony." Respondent's arguments on this Exception may be broken down to the following instances.

1) The finding at page 5 of the Initial Decision that reads: "Each State or Territory has its own medical licensure laws, but graduation with the M.D. degree from a medical school accredited by the Liaison Committee is a pre-requisite for direct licensure to practice medicine in the United states. (Schofield8Schofield deposition, page 25)." Respondent asks but what of the foreign medical school graduates who are admitted to practice? The quoted finding accurately reflects the referenced testimony. Respondent does not refer to any testimony regarding the licensure procedure for foreign medical school graduates. Complainant suggests that Dr. Schofield's words are "direct licensure" and there may be some indirect licensure for foreign medical school graduates. The entire matter is speculative and falls far short of attaching weight for purposes of either impeaching at this point Dr. Schofield's testimony or reversing Judge Duvall's finding based thereon.

2) The statement on page 7 of the Initial Decision that "In respect of Borinquen University's plans to operate entirely on a tuition cost basis, Dr. Schofield stated that of the 146 medical schools in the United States and Canada none is able to operate accredited programs solely on the basis of tuition income. (Schofield deposition, page 16)." Respondent points to further testimony of Dr. Schofield that "The budget that is indicated here shows an expenditure of $1,416,861.00. This, I assume is a proposed - it is stated to be a projected budget. Whether this will turn out to be the experience of the year, of course, I have no idea." (Emphasis supplied) This in no way detracts from the finding. The projected budget is not Dr. Schofield's idea but rather what Borinquen University presented to the Liaison Committee. Dr. Schofield testified that the Committee was told that the school would be operated on the basis of collection of tuition of $6,500 from approximately 125 students in September and a second unit of the same number later (Schofield Deposition, p. 15). He pointed out that full collection would produce $1,625,000, a higher figure than the $1,416,861 projected budget officials of Borinquen University handed him. Respondent further implies exception to the Initial Decision's acceptance of Dr. Schofield's testimony regarding the usual deposit required by medical schools and the usual charge for the Miller Analogies Test. However, Respondent refers to no proof to the contrary and affords no basis to reject this part of Dr. Schofield's testimony.

3) The statement on page 8 of the Initial Decision that "There is a status for medical schools known as 'provisional' accreditation, which is the first step leading to professional accreditation." The statement is in obvious reference to Dr. Schofield's deposition and the process of accreditation by the Liaison Committee on Medical Education of the Association of American Medical Colleges. this appears to be a carryover of a typographical error in the transcript of Dr. Schofield's deposition where on page 26 the word "professional" appears in his reference to the formal accreditation procedures, a copy of which was attached to his affidavit as Exhibit "C" entitled "Procedures Leading to Provisional Accreditation of New Medical Schools." Judge Duvall's description is otherwise sufficient.

4) The finding on page 9 that "*** a 'letter of reasonable assurance,' which is a legal determination sufficient to satisfy the requirements of statutes under which Federal funds may be transferred to the newly-formed medical school. (Schofield deposition, pages 26, 27)." Respondent simply says that the testimony is not true and suggests that surely there are other requirements. This is totally insufficient to set aside the finding.

5) The finding on page 9 that one of the objectives of Borinquen University is full accreditation of the Liaison Committee and this cannot be obtained until the first graduating class, "is incorrect." However Judge Duvall's finding must be read in context. It is that "This statement is incorrect because 'provisional accreditation' has usually been granted about twelve months before the enrollment of the first student." This is consistent with Dr. Schofield's testimony. It is clear that Judge Duvall is not denying that full accreditation is a goal of the University. In fact, as Complainant points out in its Reply Brief, that is not an issue in the case.

6) The finding on page 10, based on Dr. Schofield's deposition, that " Abond fide medical school is one which has a reasonable likelihood of being accredited by the Liaison Committee." This is what Dr. Schofield testified (Schofield Deposition, page 33). Respondent again refers to foreign medical schools and suggests that they are "bona fide" schools although not accreditated by the Liaison Committee. The short answer to that is Borinquen University does not advertise itself as a foreign medical school. Rather, its advertising specifically references its "American Medical Studies Program" and to accreditation by the Liaison Committee.

7) The finding on page 10 of the Initial Decision, again taken from the Schofield affidavit, that the Universidad Internacional Eugenio Maria de Hostas and Universidad del Caribe, Escuela de Medicina and the Catholic University of Puerto Rico "have 'provisional' accreditation." Complainant has conceded, and a reading of the transcript confirms, that this is incorrect. It is also immaterial as it has no effect on the status of Borinquen University.

8) The finding on page 12 that Mr. David Shanker "was told that the University was going to seek a 'letter of reasonable assurance.'" Respondent takes issue with the finding on the basis that David Shanker's deposition later indicates he was uncertain whether he was told directly or his father was told and then told him. That detail is immaterial.

9) The finding on page 14 that the cross examination of Dr. Sidney Shanker, David Shanker's father, "served to buttress" the testimony he had given on direct examination. The deficiencies which Respondent contends exist in Dr. Shanker's cross examination are, upon review, either non-existent or immaterial. One aspect of Respondent's exception to this testimony is the broadside attack based on the fact that Dr. Shanker was not present during his son's interview with Respondent's officials (S. Shanker Deposition, Tr. 4).

10) The finding on page 17 that Dr. Harry Elbaum, a dentist, "never sent the $6,500 tuition fee because his suspicions and doubts were aroused about the school by (1) Mr. Haggerty's quick acceptance of the qualifications of another applicant whose papers Dr. Elbaum had taken with him, (2) by the remarks of Postal Inspector Pack, and (3) by the remarks of the man who had picked him up and given him a lift to the school that morning. (Elbaum deposition, transcript pages 30-31, and Exhibit 9)." The finding accurately reflects the testimony. It appears however that the citation to Exhibit 9 should be instead to Exhibit 10.

11) The failure of the Initial Decision to find at page 17 in reference to the deposition taken from Mr. Norman Phillips, and at page 19 in reference to the deposition taken from Dr. Saul H. Phillips that Postal Inspector Pack asked each to give their depositions. Respondent, by simply referring to the omission without reference to the record or argument therein implies that the procedure, which Complainant's Reply Brief defends, was improper. There is, however, no showing or indication to that effect.

12) All of the testimony of Dr. Enrique Perez-Santiago on pages 19 through 21 of the Initial Decision. I assume that this is what Respondent takes exception to since its appeal brief states only that "Dr. Enrique Perez-Santiago as a witness (page 17, line 3 of the Initial Decision) was object to as irrelevant." The reference to page 17, line 3 of the Initial Decision is in error, the reference being obviously intended to be to page 17, line 3 of the transcript of the hearing where the objection was raised. As indicated in the further pages of the transcript of the hearing that objection was argued but not sustained. There is no showing that the testimony was improperly admitted as it appears clearly relevant.

13) The failure to give recognition to Dr. Viola Wiegand's testimony that there is a staff and that there are facilities and that classes have started. Respondent is in error in stating that the Initial Decision fails to recognize such testimony. The Initial Decision at pages 33 and 34 specifically relates this testimony. To the extent the exception may be intended rather to relate to the effect given to this testimony in reaching ultimate conclusions it is also without merit.

14) The inference to be drawn from the findings on pages 35 and 36 of the Initial decision that Dr. Cole's interest in purchasing Whitestone Hospital was generated by Mr. Di Paola. The record affords a basis for concluding that Dr. Cole was part of a group contemplating the purchase of Whitestone Hospital prior to the time Mr. Di Paola discussed with him the advantages of a tie-in with Borinquen University (Tr. 3-55). Complainant's Reply Brief seems to concede the point. The Initial Decision is accordingly modified to eliminate any inference that Dr. Cole's group of prospective purchasers was formed after his discussion with Mr. Di Paola. I consider the change insufficient, however, to alter the decision in any material respect. As Complainant's Reply Brief points out, the more important aspect of the Whitestone Hospital connection is the testimony that Whitestone Hospital has no facilities for teaching and that no application with Respondent has ever been discussed by the present administration of the hospital (Tr. 3-41-49).

15) The finding on page 36 of the Initial Decision that "The agreement which is Respondent's Exhibit 2, specifically discusses the possibility of the purchase, or the leasing, of that building by the Haggerty Brothers, Dr. Muriente and Mr. Frank Carbo." Respondent contends that there is no showing in the record that either Dr. Muriente or Mr. Carbo were parties to the agreement. The Initial Decision does not say these individuals are parties to the agreement. It says that the agreement, which is Exhibit 2, between BEC Associates as agent and the owner of the Metro Building in Hato Rey, Puerto Rico, specifically discusses the possibility of the purchase or leasing of that building by the Haggerty Brothers, Dr. Muriente and Mr. Frank Carbo. That this is true is quite apparent since the agreement provides in pertinent part that

"1. the Haggerty Brothers, Dr. Jose Muriente, Lcdo. Frank Carbo, Borinquen University, their subsidiaries, successors or assigns are the sole and exclusive CLIENTS of BEC ASSOCIATES and any and all business derived from these CLIENTS will entitle BEC ASSOCIATES to their commission for services."

EXCEPTION III

Respondent's third Exception is that:

"EVIDENCE OF TAPPING OR BUGGING BY A POSTAL INSPECTOR WAS MENTIONED WITHOUT GIVING IT THE IMPORTANCE AND/OR MEANING IT REALLY HAS, NAMELY A VIOLATION OF CIVIL RIGHTS, AN ABUSE OF POWER BY COMPLAINANT AND PROOF THAT THERE IS A CONSPIRACY BETWEEN THE LIAISON COMMITTEE AND COMPLAINANT, AND MORE DIRECTLY THE POSTAL INSPECTOR WHO FILED THE COMPLAINT, TO STOP RESPONDENT FROM CONTINUING ITS MEDICAL SCHOOL PROGRAM."

Respondent makes much of the fact that Inspector Colgate who was present during an interview of Dr. Schofield by Inspector Pack, had less than full recollection of what transpired. However, Inspector Colgate explained that she wasn't fully familiar with the case at the time of the interview and did not pay much attention (Tr. 2-27). Connected with the conclusion of lack of credibility Respondent would have drawn from such testimony is the further conclusion of impropriety in the cooperation of Dr. Schofield with the postal inspectors. The record is insufficient to support either conclusion. Respondent also refers to the fact that a mail cover was placed on Respondent's mail and that Inspector Colgate carried a transmitter on her person during her interview as a prospective student the Borinquen University personnel. While contending that these actions establish a conspiracy and constitute an abuse of power and violation of civil rights. Respondent gives no support for these conclusions.

On the contrary, "mail covers," which do not involve the opening of mail, are specifically authorized by Postal Regulations in situations where there is a reason to believe that the subject or subjects are engaged in an activity in violation of any postal statute" § 233.251(a) Postal Service Manual. There has been no showing that the procedures incident to properly instituting a mail cover in the subject case were not followed. Nor does Respondent offer any authority to back up its implied exception to the use by Inspector Colgate of a transmitter. That the use of such transmitters may be permitted is evident from 18 USC § 2511(2)(c) and cases such as United States v. White, 401 U.S. 745 (1971).

CONCLUSIONS

Respondent's Exceptions are disallowed and the Initial Decision is hereby affirmed. Accordingly a remedial order is being issued under the provisions of 39 United States Code § 3005.

02/01/78

Lussier, Edward F.