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Published April 08, 2013, 08:43 AM

University suspends donor talks amid Sanford deal

ST. PAUL, Minn. (AP) — The University of Minnesota will suspend talks with donors linked to a proposal that would give a South Dakota-based company control over Fairview Health Services, officials announced during a public hearing Sunday.

ST. PAUL, Minn. (AP) — The University of Minnesota will suspend talks with donors linked to a proposal that would give a South Dakota-based company control over Fairview Health Services, officials announced during a public hearing Sunday.

Sanford Health of Sioux Falls, S.D., has proposed acquiring Fairview Health Services, which owns the University of Minnesota Medical Center. Minnesota Attorney General Lori Swanson, who has expressed concern that putting one of the state's largest hospital systems in the hands of an outside company is not in the best interest of Minnesotans, pressed for information during a public hearing on the issue Sunday at the state Capitol, according to the St. Paul Pioneer Press.

In response to Swanson's questioning, the newspaper reported, university general counsel Mark Rotenberg told Swanson the university had placed a moratorium on any fundraising discussions that could raise a conflict-of-interest question until merger talks are complete.

The Star Tribune reported that the university noted that any moratorium would cover potential gifts from T. Denny Sanford, a wealthy university alumnus who has been courted for donations to the Gophers' athletic fund.

Sanford launched Sanford Health in 2007 with a $400 million donation, the Star Tribune reported.

Rotenberg said the new policy will assure Minnesotans that any acquisition talks won't be tainted by potential conflicts involving any "gifts for football or athletics or anything else," according to the Star Tribune.

Swanson welcomed the moratorium. She said Minnesota taxpayers have a major stake in the future of the university's medical franchise and in Fairview, which has grown largely due to its tax-exempt status as a nonprofit.

Swanson said her job is to protect Minnesota's investments, according to the Star Tribune, and make sure the assets are not inappropriately siphoned off to an out-of-state company.

According to the Pioneer Press, she questioned whether there has been an inappropriate commingling of merger talks with university efforts to raise money for its athletic department, either from Sanford Health or Sanford.

The Pioneer Press said the attorney general pointed to a recent email from a Sanford Health official to university President Eric Kaler that was largely focused on the merger but in closing briefly mentioned fundraising efforts for university athletics.

"Sports and athletic donations have nothing to do with the merger of a hospital system," Swanson said of the email. "It doesn't look good."

The Star Tribune was the first to report about the email Sunday.

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