A CRUMBLING FOUNDATION

THE DOCTOR'S IN JAIL AND MOST BOARDMEMBERS HAVE QUIT--BUT BILL COORS VOWS TO PRESS ON.

It was clear from the start that the starring role at the foundation would go to Rajko Medenica. "You couldn't have written a more complex character out of a screenwriter's head," says Steven Smith, a young lawyer who was hired to help secure the new foundation's nonprofit tax status.

Born in Yugoslavia, Medenica was educated in Belgium and Switzerland. He rose to such prominence that he reportedly was asked to treat Marshal Josip Broz Tito and, later, the Yugoslavian leader's daughter. Thanks in part to his high-profile clientele, he soon gained a reputation as a sort of miracle worker who could successfully snuff even the most incurable cancers.

Medenica immigrated to the United States in 1985. With the help of the former governor of South Carolina, whose daughter he reportedly cured, he established a clinic in the resort community of Hilton Head. There he treated upscale patients, including Muhammad Ali and Chuck Stevinson.

Stevinson quickly became the doctor's most generous supporter. Three years ago, before he and Bill Coors started talking about forming their own foundation, Stevinson began building Medenica a clinic in the Denver West office complex, setting aside 60,000 square feet for what he hoped would become a state-of-the-art medical facility. (It closed soon after Stevinson's death.)

Despite the support of well-connected patients such as Stevinson, Medenica had plenty of enemies. Many of them were traditional oncologists who distrusted Medenica's eagerness to mix and match treatments and diseases. Though technically an oncologist, Medenica claims to have cured cases of multiple sclerosis and successfully treated AIDS.

At Hilton Head in particular, Medenica came under close scrutiny. In 1993 a Hilton Head Hospital review committee made up of several medical specialists examined Medenica's work and concluded that his treatment "represents an unregulated, scientifically undisciplined application of medical technology mixed with charisma, unrealistic optimism, pseudo-scientific protocol, and excellent basic nursing care."

And at least one jury concurred. This past spring Medenica was ordered to pay $14 million to settle a 1993 medical-negligence lawsuit. The suit, brought by a South Carolina breast-cancer patient, charged that Medenica used a drug that weakened her so much she was incapable of receiving chemotherapy treatments. The cancer subsequently spread to her lungs and liver.

Then in August of this year, Medenica's political past caught up with him.
After Tito's death in 1980, Yugoslavian investigators discovered a paperwork gap: The Communist government had made payments to a Rajko Medenica in Switzerland, but there was no record of whom the doctor had treated. Medenica claimed it was because Tito, afraid that word of his ill health would diminish confidence in his regime, used an assumed name when he traveled to Switzerland for his treatments. Despite his explanation, in 1983 the doctor was convicted of defrauding the people of Yugoslavia.

The following year Medenica was imprisoned in Switzerland on the same fraud charges. He was soon released, but a Swiss court convicted him again in 1989 (the alleged frauds had occurred at Medenica's Switzerland clinic) and pressed to have him extradited.

Stevinson fought his doctor's extradition by filing a "friendly" lawsuit against Medenica that same year. In it he claimed that if Medenica and his medical expertise were to leave the country, Stevinson's own life would be in jeopardy. The legal ploy worked: A South Carolina judge ordered Medenica not to leave the United States.

By the time he decided to visit Austria this past summer to see his daughter perform a piano concert, Medenica had avoided extradition for six years. But Interpol matched Medenica to his past. He was detained in Munich and deported to Switzerland.

Since then, Medenica has suffered at least one heart attack. He has spent the past three months in either a Swiss prison or its hospital. His supporters say they are hopeful Medenica will be released on parole as early as February.

After Medenica's arrest, the foundation's research slowed to a near standstill. And it stopped altogether last month when Richard Hankensen, the foundation's only full-time medical staffer, quit.

Reached in Louisiana, where he is an adjunct professor at Tulane University and attempting to build an oncology practice, Hankensen declines to discuss the foundation. But sources close to him say Hankensen first became disillusioned with the foundation after several of his research proposals were turned down. His disillusionment became complete, they add, after he discovered that Medenica's research for Coors may not have been all it appeared to be.

What Hankensen reportedly discovered, these sources say, is that Medenica's research work was embellished and, in some cases, shoddily compiled. "It's called `dry-labbing,'" says one medical source familiar with the doctor's papers. "He'd inflate the number of patients he was studying and increase the length of time he was following them. And he'd always be fiddling with the treatments, so that any scientific study of it was impossible."

For example, the source says, in one foundation-funded AIDS study, Medenica reported following 25 AIDS patients. Yet a medical audit of the study turned up only three. "It just couldn't confirm 22 of the 25 patients," he says.

"Medenica really did have some extraordinary results in specific cancer treatments, mostly melanomas," the source continues. "But he just wanted to be larger than life, I guess. He just wouldn't do the research by the rules and follow through with it."

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