HOSPITAL MAY HAVE VIOLATED MAILING RULES IN CAMPAIGN FOR TOBACCO FUNDS.

Byline: Joseph Giordono Staff Writer

VENTURA - Sponsors of a ballot initiative that would divert $250 million in tobacco settlement funds from Ventura County to local private hospitals might have violated mailing rules governing nonprofit agencies, officials said Wednesday.

According to a letter from the U.S. Postal Service to the executive director of Community Memorial Hospital, representatives of the Citizens' Committee To Safeguard the Tobacco Settlement for Healthcare have 15 days to submit a written justification for their use of the hospital's nonprofit mailing rates.

The campaign sent out 170,182 letters at nonprofit standard mail rates in early April, urging county voters to support the proposed ballot measure.

The Postal Service review, prompted by a request from county supervisors, found reason to question the relationship between the Citizens' Committee and Community Memorial.

``It appears that CCSTSH is a separate organization from the Community Memorial Hospital, which would make it ineligible to use the hospital's authorization to mail at nonprofit rates,'' the letter said.

But attorneys for Community Memorial said the nonprofit mailing is a ``nonissue'' because the campaign and the hospital are the same entity and share taxpayer identification numbers. They are named separately only for campaign finance disclosure purposes, they said.

``We do not know what information the county gave the Postal Service, but we are viewing this letter as just a request for information,'' Community Memorial attorney Steve Lucas said. ``We will certainly respond as soon as possible.''

Supervisor John Flynn said he was satisfied with the preliminary Postal Service ruling and that the possible violation reflects poorly on the initiative campaign.

``If they are in violation of Postal Service rules, it is just one indication in my view of their total violation in many areas, including trying to fool the people with this initiative,'' Flynn said. ``I do not think the people will be fooled.''

If the Postal Service is not satisfied with the explanation it receives, the ballot campaign would be forced to repay the difference between the nonprofit rate and the next highest rate.

If further violations occur, Community Memorial could eventually be stripped of its nonprofit mailing status, said Sheri Fatoul of the Postal Service.

Officials said the rate for nonprofit agencies would be 12-14 cents per letter, less than half the standard rate.

The Postal Service letter comes just a day after the initiative was officially approved for the November ballot and on the heels of accusations by Community Memorial that county supervisors were illegally campaigning against the initiative.

Supporters of the measure say it is the only way to ensure that the entire settlement is spent on health care. The county says it would put public money in private hands.