Three American Medical Association senior executives lost their jobs late last week over their involvement in the embarrassing Sunbeam Corp. endorsement deal.
Gone are Chief Operating Officer Kenneth E. Monroe, James F. Rappel, group vice president for business and management, and Larry Jellen, vice president of marketing.
No action was taken against Executive Vice President P. John Seward, M.D., who announced the pact along with Sunbeam Chairman Albert Dunlap in August.
Monroe signed the contract giving Sunbeam the right to put the AMA name and seal on its products, and Jellen initiated talks with the appliance maker. Rappel's role was not clear.
Lynn E. Jensen, group vice president for strategic management and development, was named acting COO.
The actions were decided during an arduous 12-hour emergency meeting in which the AMA board of trustees struggled to salvage the association's credibility.
"The responsible individuals failed to recognize the ethical implications of the Sunbeam transaction, and they failed to appreciate that the transaction was and is directly contrary to AMA policy," said AMA Chairman Thomas R. Reardon, M.D., in a written statement issued after the meeting.
"Above all the AMA reaffirms today for the profession, the public, the nation's policy leaders and our employees that our values are in order."
AMA executives also have expressed concern over the flap's impact on the AMA's lobbying clout in Washington (See story, p. 6).
The board suspended further endorsement deals until a "clear policy" is adopted and said it would no longer allow the AMA name or logo to be associated with a product without previous board approval.
Trustees and AMA attorneys met behind closed doors in a basement meeting room at a hotel near Chicago's O'Hare International Airport, leaving the room only occasionally and saying nothing to reporters. Seward left the hotel early in the day. He announced the Sunbeam deal Aug. 12 at the National Hardware Show in Chicago.
Reardon's statements did not indicate whether any staff members misled AMA personnel or the board about the nature of the deal, which gave the association royalties for putting its name and logo exclusively on Sunbeam products.
The board heard the results of an investigation of the decision to sign the Sunbeam contract from Chief Counsel Kirk Johnson.
But in a twist that raised further questions about AMA fund raising, Johnson himself had a hand in a proposed $2.5 million deal with drugmaker Hoffman-LaRoche to raise money for a fitness education campaign sponsored by the AMA and the U.S. Olympic Committee, according to published reports last week. The AMA planned to team its logo with that of the Olympic committee and then charge corporations that would add their names as co-sponsors.
Johnson's wife, former AMA staff member Wendy Borow Johnson, who was working for the communications firm Medicus Group International, reportedly would have profited from the deal, but it fell through.
The AMA's vice president of communications, Lewis Crampton, said the board might consider procedures that would give its ethics committee a greater role. He said an internal committee had been established to review procedures on "educational" programs last spring, but "we got educated pretty fast because of this Sunbeam thing."
The AMA has until this week to file a response to the lawsuit Sunbeam filed Sept. 6. Sunbeam sued to force the AMA to comply with the agreement, which gives the association a royalty based on gross sales of Sunbeam products (Sept. 15, p. 3). The agreement generated a barrage of criticism from consumer groups and doctors. The AMA publicly renounced the deal, and the board notified Sunbeam that it would not carry out the terms of the contract.