The former CEO of Whidbey’s public hospital district gave a hospital administrator what amounts to a $250,000 loan to fund her criminal defense through what appears to have been a verbal agreement, recently filed court documents indicate.

WhidbeyHealth Medical Center, formerly Whidbey General Hospital, still hasn’t been reimbursed, though a Superior Court judge’s rulings in an appeal may clear the way for reimbursement through a special state fund for people who claim self-defense and are acquitted.

A hospital commissioner and the hospital’s chief financial officer recently filed documents clarifying how hospital officials decided to use public money to cover Chief Nursing Officer Linda Gipson’s defense in a gross misdemeanor criminal case.

Citing attorney-client privilege, the hospital previously refused to provide records about its decision to fund Gipson’s legal defense, in response to a public records request filed by the Whidbey News-Times.

Following an Island County District Court trial last summer, a jury found Gipson not guilty of assaulting a restrained mental health patient. Gipson and other medical experts testified that she used a correct and accepted technique of putting her hands on the unruly patient’s chin to redirect the patient’s attention.

Hospital officials and Gipson’s attorney were critical of the prosecutor’s decision to file charges against Gipson; on the other hand, the District Court judge found probable cause for the charge from information contained in a police report; the Island County Sheriff’s Office recommended the charge be filed, and several nurses testified against Gipson.

The bill for Gipson’s attorney and experts who testified in the unusually lengthy trial topped $250,000. It came out during a hearing that the hospital was footing the bill; hospital officials earlier refused to say whether the hospital was funding the defense.

Hospital Commissioner Ron Wallin explained at the time that the hospital was obligated to pay for an executive’s defense because of a resolution passed by the board.

A briefing filed July 15, however, states that the money was actually a loan. It was backed by a declaration from Wallin, who said he spoke with former CEO Tom Tomasino about the matter.

“There was a clear understanding among all involved that the funds advanced by the hospital would be repaid by Dr. Gipson, either from her own funds, if found guilty, or from funds reimbursed by the state if she were acquitted,” Andrew Schwarz, Gipson’s attorney, wrote.

Wallin did not return calls from the News-Times for further comment.

Ron Telles, current CFO of the hospital district, agreed the understanding was that the money would be repaid, though he wasn’t employed by the hospital at the time the decision was made.

“In addition, (Telles) adds that the funds are desperately needed by WGH and that he would recommend that the hospital pursue legal action against Dr. Gipson if the funds were not repaid after she was reimbursed by the state,” the attorney wrote.

Gipson also wrote that it was her unwavering intention to repay the funds from money reimbursed by the state.

Court documents don’t include evidence that any formal contract or paperwork was generated regarding the loan.

It was a decision made behind closed doors. Wallin wrote that Tomasino, and not the elected board, gave Gipson the loan.

Island County Prosecutor Greg Banks said the hospital’s agreement to either pay for Gipson’s legal bills or loan her the money is in violation of the state constitution. Article 8, section 8 specifically states that a public entity may not give or loan its money to an individual “except for the necessary support of the poor and infirm.”

Banks said he filed a public records request to find out if there were any written agreements regarding the loan.

Previously, Banks said he talked to the state Attorney General’s office and investigated the issue, but couldn’t find any other instance in state history in which a public body funded an individual’s criminal defense; it’s standard practice, however, for public agencies to handle civil litigation related to public employees’ jobs.

A spokesperson with the state Auditor’s Office said the hospital is due for an audit this fall and auditors will be looking into the issues.

Current hospital CEO Geri Forbes noted that the case “was a very unusual situation.”

“Although it’s impossible to predict the future, we certainly do not anticipate anything like this happening again. Since I was not present, I cannot speak to everything done by the previous administration, but I will fully support decisions made at the time,” Forbes said in an email statement. “As always, WhidbeyHealth is committed to safeguarding staff, workplace and patient safety.”

Details of the hospital’s loan to Gipson became an issue in court after the state Attorney General’s Office — at Banks’ request — appealed Island County District Court Judge Bill Hawkins’ ruling that Gipson’s criminal defense should be reimbursed from a state fund that’s supposed to reimburse people who are found not guilty by reason of self defense.

The Attorney General’s Office argued that Gipson shouldn’t get the money because the hospital actually picked up the tab; that Hawkins should have recused himself because his wife works for Gipson; and that the jury found Gipson’s actions were a lawful use of force, not self defense.

Island County Superior Court Judge Alan Hancock heard the appeal and has ruled in Gipson’s favor so far. Hancock determined that Hawkins did not abuse his discretion, noting that Hawkins said Gipson does not supervise his wife, does not review her work performance and that he had no conversations with his wife about the case. Hancock wrote that the a litigant asserting a violation of appearance of fairness doctrine must submit proof of actual or perceived bias, but none was offered.

Hancock ruled that the prosecutor waived any argument regarding whether the case was self defense by failing to object to the jury instruction regarding the issue.

Hancock did not rule on whether Gipson can be reimbursed for costs she did not incur, but asked for further evidence on the issue, which is why the hospital officials submitted the recent declarations.

Banks said he’s handling the arguments on the final issue for the Attorney General’s Office. He said he will ask for an extension to give the hospital time to fulfill his public records request.

“Since we still have not seen any credible evidence of how the hospital authorized the payments, or even how they made the payments, we are at a disadvantage in trying to argue the issue,” he said.

The deputy attorney general who handled the appeal said he has not decided yet whether to appeal Hancock’s decisions.