A CRUMBLING FOUNDATION
When the patriarchs of two of Colorado's most powerful families joined forces over two years ago, it wasn't for another megamillion-dollar business deal, or a shared sinecure on a corporate board, or even one of those glittering charity events. It was disease that brought Chuck Stevinson and Bill Coors together.
The two men--whose families' combined wealth in car lots, factories and real estate soars into the hundreds of millions--found they both were intrigued by the deadly blips in the body's immune system that have puzzled physicians and scientists for more than a decade. Their interest was intensely personal.
Chuck Stevinson was the first to receive bad news. He was diagnosed with a rare cancer-related blood disease in the late 1970s; by 1987 his doctors gave him only months to live. Through a friend, he learned of a Yugoslavian physician practicing an unorthodox brand of medicine that paid especially close attention to the patient's own self-defense force, the immune system. Desperate, Stevinson contacted Rajko Medenica.
Stevinson became obsessed with the minutiae of his disease. But he also had a broader vision, and he was fascinated by the promise that Medenica's nontraditional treatments could hold for others. "It was like a third career for my father," says Scott Stevinson, one of his sons. Before the car-and-real-estate magnate died in February, he'd credited Medenica with prolonging his life by nearly a decade.
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Bill Coors had a long-standing professional interest in health-related issues; he started a wellness center at the Coors Brewery in Golden well before such preventive clinics were standard. But like Stevinson's, his passionate involvement with disease had become intimate. Three years ago, Coors discovered his eyes were losing their ability to see colors. Stevinson, a close friend and business colleague, referred Coors to Medenica. Coors says the doctor reversed the deterioration, and since then Medenica also has treated him for prostate problems. "I hold myself out" as an example of Medenica's genius, he says.
Intrigued by the idea of sharing their personal physician with the world, Stevinson and Coors decided to set up an organization that would permit Medenica to prove his medical miracles through rigorous research. Although Coors lent the family name to the project, it was clear from the beginning that it was a two-man endeavor--Bill Coors's and Chuck Stevinson's gift to science.
Through the Adolph Coors Foundation, the family's philanthropic arm, Bill Coors infused the newly formed Adolph Coors Medical Research Foundation with millions of dollars; tax records show the Coors family foundation gave more than $1 million in 1994 alone. Stevinson donated space in his family's Denver West complex outside of Golden and guided the medical foundation through its first months until he became too sick to continue.
By spring 1995, the Adolph Coors Medical Research Foundation appeared to be well on its way. In May it hired Medenica, promising to fund the doctor's research efforts into alternative treatments for immunological disorders. Bill Coors began negotiating with the AMC Cancer Research Center to buy one of its Lakewood buildings, a fully furnished twenty-bed hospital, where Medenica would treat patients and conduct his studies. For his part, Medenica showed his commitment by purchasing a $750,000, Spanish-style compound in the foothills.
Since this summer, however, the foundation has come apart at the seams. And recently it's unraveled at a spectacular rate.
The first stitch blew in August, when Medenica was arrested in Europe. Yet even before he was taken into custody by Interpol, accusations had surfaced in Medenica's South Carolina lab that the doctor was embellishing the AIDS research he'd done for the Coors foundation.
All but two of the foundation's seven boardmembers--its paid administrator and Bill Coors himself--have bailed out over the past few months. The reason, sources say, is that the executives were reluctant to become tangled in a financial scandal that threatens to consume the foundation.
Coors claims that in its short life, his foundation has made great strides, particularly in AIDS research. He also says that he is firmly committed to continuing it. But he concedes that for now the organization is out of money and on hold.
Certainly bad luck played a part in the disintegration of the Adolph Coors Medical Research Foundation. Yet sources also cite another reason: the reluctance--or the inability--of two savvy, successful businessmen in the twilight of their careers to apply their accumulated professional acumen to such a personal project.
"This was a brilliant screenplay," one source says. "But the casting directors did a lousy job."
For a man so focused on disease, Bill Coors looks remarkably healthy. He has clear blue eyes and a long patrician face that, when he is distracted, can appear exhausted. He is tieless and wears a loosely buttoned blue oxford shirt and shoes whose soles are scraped raw. His Denver-facing office, all dark wood and brass fixtures, is flooded with sunlight. A glass bookshelf above and behind his executive-sized desk includes copies of The Living Bible and Toxic Terror.
Coors stands behind his doctor. "The man is the medical genius of all times," he says of Medenica. "It is absolutely incredible how far ahead he is in his thinking. Ten years from now, what this man has done will make him a hero."
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."
At the same time that Medenica's research was being called into question, auditors were beginning to look closely at the foundation's financial ledgers. The reason, according to court documents filed in Jefferson County, was a series of mysterious checks written between a company called Advantage Clinic and the Adolph Coors Medical Research Foundation.
Advantage Clinic was set up five years ago in Stevinson's Denver West office complex. The privately owned, for-profit company conducts standard medical lab work such as blood testing; it is controlled by the Stevinson family and a handful of local physicians. (Advantage is not connected with the now-defunct clinic Chuck Stevinson built for Medenica.)
Although it had no official link to the Adolph Coors Medical Research Foundation, Advantage and the foundation shared boardmembers. Henry Cleveland, who heads Sloans Lake Managed Care, and E.A. Smith, a pathologist at St. Anthony's Hospital, sat on both boards.
Advantage and the foundation also shared several paid administrators. Donald Smith headed Advantage from January through July of this year, when he quit. He remains president of the Adolph Coors Medical Research Foundation. His wife, Patricia Reykdal, was Advantage's chief operating officer and also did some work for the research foundation.
Two months ago Advantage's owners filed suit against Donald Smith and his wife in Jefferson County District Court. Their lawsuit claims that Smith took more than $300,000 from Advantage. He allegedly used some of the money to pay alimony to an ex-wife and to place other relatives on the payroll.
The lawsuit also alleges that there was an unexplained flow of funds between Advantage and the Adolph Coors Medical Research Foundation. The checks, signed by Smith, were for small enough amounts--less than $2,500--that they did not require a co-signature under company policy.
Smith has denied any wrongdoing and is fighting back against what he claims is an effort to discredit him with Bill Coors. In one legal filing, Smith's attorney charges that "Advantage and its officers, directors and shareholders have made numerous slanderous comments to members of the Coors family and other members of the community relating to their unsubstantiated allegations of improper conduct." (Smith did not return phone calls from Westword.)
"We're just trying to get things cleaned up," Scott Stevinson says of Advantage's financial audit and the resulting suit.
Bill Coors says he has no knowledge of any money being transferred from Advantage to the Adolph Coors Medical Research Foundation. Nevertheless, he has ordered an audit of the foundation. In the meantime, he says, he will continue to support the foundation's president.
"As far as Don Smith is concerned, I think he's one of the most remarkable men I've ever met," Coors says. "I'm behind him 100 percent."
The foundation's other boardmembers apparently felt differently. Most have quit the board in recent months, and sources suggest they resigned in order to avoid association with the foundering foundation and its increasingly messy money matters.
Dr. Henry Cleveland, who resigned from the board this past summer, disputes that; he says he left simply because he was too busy. "I resigned because I was working so damned hard here," he says. Other boardmembers who recently stepped down--pathologist E.A. Smith and oncology nurse Deborah Nelson--did not return calls from Westword.
E.A. Smith's son Steven, the lawyer who helped obtain the foundation's nonprofit status, also sat on its board. "I was excited doing it," he says. "The goals were pretty decent--to provide a nonprofit foundation concerned with AIDS and other diseases that didn't rely on the government for support. This could be a faster channel for getting things done."
But in August Steven Smith, too, left the board. He declines to say why, stressing that it is a time he doesn't want to think about anymore. "It's been such a turbulent period that I feel I want to do anything I can to put it behind me," he says. "I just want to lead my life now."
Bill Coors acknowledges that the multiple resignations are "a problem...All I know is that I received a lot of letters of resignation without any explanation in them." But he admits it's possible the boardmembers quit because of the foundation's financial turmoil.
The numerous departures have left only Coors and Donald Smith running the research foundation. Still, Coors sees the setbacks as temporary. "The foundation is sort of in a hiatus, in a state of reorganization," he says.
Before its recent troubles, he adds, the foundation was on the cusp of great discoveries. "It's too early to make any claims of what we've accomplished through the foundation," Coors continues. "But we have developed certain protocols that will allow people with HIV disease to live out their lives without full-blown AIDS."
Unfortunately, Coors concludes, the foundation now will be forced to concentrate on more mundane things, such as raising money and hoping that Medenica gets out of prison soon.
First, however, the foundation could have to clear the air with the Internal Revenue Service.
One responsibility of a nonprofit organization is to ensure that its officers don't benefit financially beyond their agreed-upon salaries. An IRS spokesman says that if Donald Smith were to have enriched himself from the Adolph Coors Medical Research Foundation, the foundation could be charged with violating tax laws. Yet even if the allegations against Smith are unfounded, the tax agency may have a quibble with the foundation's tax-exempt status.
The Adolph Coors Medical Research Foundation received its designation as a tax-exempt organization by calling itself a hospital. This is not unusual; research foundations frequently achieve tax-exempt status by becoming affiliated with a hospital. But the Coors foundation never was.
Not for lack of trying, either. The foundation first attempted to forge a connection with Mercy Medical Center, but that plan fell apart when Mercy went out of business last spring. Next, Coors says, the foundation signed an agreement with Hilton Head Hospital, where Medenica had admitted patients from his South Carolina clinic. But a hospital administrator denies that Hilton Head ever had a relationship with the Adolph Coors Medical Research Foundation; moreover, this past summer the hospital severed all ties with Medenica himself.
If the Adolph Coors Medical Research Foundation is going to raise any more money, it must find a hospital that will support its research. That could be tricky: With Medenica and Hankensen gone, only a part-time researcher remains affiliated with the foundation. His name is Dr. Kenneth Alonso. And like Medenica, he comes with a past.
A pathologist and former chief medical examiner for the state of Georgia, Kenneth Alonso first gained prominence in 1990 when an AIDS patient he and a colleague had been treating reported that he was cured. Alonso had used a $35,000 technique called hyperthermia, in which the patient's blood is heated to feverish levels in the hopes of killing attacking viruses.
Because of restrictions on human trials in the U.S., Alonso performed some of his hyperthermia research in Mexico. In mid-1990, two months after the AIDS patient claimed he was cured, another of Alonso's patients died in that country. He was the third person the doctor had ever treated with the hyperthermia therapy.
A subsequent National Institutes of Health report on Alonso's treatments was scathing. The original AIDS patient who declared a miracle, the NIH found, didn't have AIDS at all, but rather cat-scratch fever. "There appears to be no clinical, immunological or virological support" for using hyperthermia to treat AIDS, or for even conducting further research on people, the report concluded.
It wasn't the last time Alonso had a run-in with medical authorities, either. Early this year the Georgia State Board of Medical Examiners concluded that in six separate cases, Alonso's treatment of cancer patients was "unethical and dangerous." The board suspended his medical license for six months, ordered him to pay a $10,000 fine and prohibited him from ever treating cancer patients again unless he becomes a board-certified oncologist.
Alonso has been covering at Medenica's South Carolina clinic since the Yugoslavian doctor was arrested in Europe. And Coors confirms that Alonso has conducted some research for his foundation. He also says he's aware of Alonso's controversial past.
"Raising the body's temperature up to 106 degrees for an hour is going to have its deleterious effects," Coors says. "So he's had some casualties, so to speak."
But operating on the edge of traditional medicine is what the Adolph Coors Medical Research Foundation was designed to do, and Coors says he is confident his foundation soon will be pushing the boundaries of immunological treatment once again, even though he concedes it's unlikely the family foundation will continue pouring money into the project.
"I don't control the family," he says. "What might go on under the name Adolph Coors doesn't mean that everybody in the family endorses it, or that everybody supports it. The Adolph Coors Medical Research Foundation is my doing, and strictly my doing. The foundation is me; it is not the Coors family.
"Everything has happened that shouldn't have happened," he concludes. "But we're just stalled. Give us a couple months. We'll be back.
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