[TAPE 1, SIDE A]

[START OF TAPE 1, SIDE A]

KATHLEEN KEARNS:

Today is Wednesday, September 11, 2002. This is Kathleen Kearns speaking, and I'm with Mr. Frank Daniels Jr. Could you please just say your name and I'll make sure the pickup's alright.

FRANK DANIELS JR.:

Frank Daniels Jr. On the anniversary of 9/11.

KATHLEEN KEARNS:

Yes, sad day. Have you done anything to observe the day?

FRANK DANIELS JR.:

I have not participated in any of it. I haven't watched any of it on TV. I read some of the stuff in the paper. But that's the past, and while I'm crazy about history, I don't need to be reminded of all the individuals who had all sorts of misery. So I haven't wanted to. I haven't wanted to participate. So I haven't.

KATHLEEN KEARNS:

I haven't had my television on.

FRANK DANIELS JR.:

Well, you don't watch TV anyway.

KATHLEEN KEARNS:

[Laughter] Not much, not much. Before we get into talking about Wake Med, could you give me just a real brief capsule summary of your newspaper career?

FRANK DANIELS JR.:

Let's see. I went to work when I was 14. It was a family-owned newspaper. I worked in the summer as an office boy. Then later, when I got out of the service, I went to work at the paper in '56, and I worked from '56. And then in '71, I became publisher, and in '96 I retired. And we sold the paper in '95. I had always planned to leave the paper when I was 65, and so I did. Made everybody else leave, I thought it was only fair to make myself leave. So I did.

KATHLEEN KEARNS:

So your dad was publisher at the time you first started working there?

FRANK DANIELS JR.:

He was. He was publisher and my uncle was editor. Actually my father was general manager and my uncle was editor. It didn't have a publisher.

KATHLEEN KEARNS:

Your uncle's name?

FRANK DANIELS JR.:

Jonathan Daniels. And Jonathan retired in '68, and Claude Sitton came in as editor, and I think I became associate publisher.

KATHLEEN KEARNS:

In what year?

FRANK DANIELS JR.:

'68.

KATHLEEN KEARNS:

Was Claude Sitton any relation?

FRANK DANIELS JR.:

No, he came from The New York Times. He'd worked at The New York Times as a reporter and as a national editor, and he was looking to move from New York and to move from The New York Times. So he came as editor, and in '68 I became associate publisher and then co-publisher and then publisher in '71.

KATHLEEN KEARNS:

OK. And you remained publisher until '96?

FRANK DANIELS JR.:

[Affirmative sound.]

KATHLEEN KEARNS:

All right. So when you came on in '56, what was your role then?

FRANK DANIELS JR.:

'56 I was selling advertising. Before that I worked in circulation, before I went in the service. Then I came back and sold advertising. Then I worked in the accounting department, and then I became acting circulation manager. The circulation manager died unexpectedly, and I worked as acting circulation manager for about three or four months. And then we found a circulation manager, and I guess I was business manager at that time. And I went back to being business manager.

KATHLEEN KEARNS:

Who were the reporters and editors who covered Wake Med? [Phone ringing] [Recorder is turned off and then back on.] I was asking what reporters and what editors were basically responsible for covering Wake Memorial? As many as you recall.

FRANK DANIELS JR.:

Gosh, I don't remember. I don't remember. I guess if you named some, I would remember who they were, but I really don't remember any.

KATHLEEN KEARNS:

OK. I wish I'd thought to bring some of the clippings

---

Page 3

that some of the reporters [wrote]. Was Mr. Sitton, once he came in '68, did he have overall editorial responsibility for covering the hospital?

FRANK DANIELS JR.:

He did. He had responsibility for both the editorial page and the news side. The managing editor was a man named Bob Brooks, and Bob Brooks was really the guy who ran the news operation. So Sitton was responsible for the news operation, the editorial page, and the photo operation. There was a head photographer who reported to him. And then the managing editor had all the news functions, and the managing editor reported to Sitton. And then there was an associate editor responsible for the editorial page, and they reported to Sitton.

KATHLEEN KEARNS:

Was Bob Brooks—you said he was managing editor?

FRANK DANIELS JR.:

He was managing editor.

KATHLEEN KEARNS:

Was he managing editor even before Mr. Sitton came?

FRANK DANIELS JR.:

Yes. Mmm—I don't know whether he was actually managing editor or assistant managing editor, because Woodrow Price was there for a while. Woodrow Price was the managing editor, and Sam Reagan was—his legal title was executive news editor, but he dropped the "news" and he served as executive editor. Because Uncle Jonathan really didn't get that involved in the news operation. And then Uncle Jonathan was gone a lot for a couple of years. So when Sitton came, Reagan changed jobs and Reagan left about six months to a year later and actually went to Southern Pines and bought the newspaper down there. Which, interestingly enough, I subsequently bought from his estate.

KATHLEEN KEARNS:

Do you still have that?

FRANK DANIELS JR.:

Yes. My nephew runs it.

KATHLEEN KEARNS:

Interesting. One of the things I've been trying to reconstruct is the passage of the bond issue in 1955 for the funding of the hospital. Do you remember that period, much of anything about that?

FRANK DANIELS JR.:

No, because, see, I was in the service. I got out of

---

Page 4

college, I worked here for six months, and then went in the service and I was in Japan. So I paid very little attention to that. I remember we had Rex Hospital here and we had St. Agnes. St. Agnes was for black people. Rex was essentially for white people, because you had segregation then. St. Agnes was an abysmal place.

KATHLEEN KEARNS:

What do you remember about it?

FRANK DANIELS JR.:

I just remember it as being not a very good hospital.

KATHLEEN KEARNS:

Were you ever inside?

FRANK DANIELS JR.:

I don't think I was, not while it was functioning as a hospital. I don't remember ever going in it. But my father was chairman of the Rex Hospital board. And I remember him talking about it. I can't remember what year he became chairman, but he was chairman for twenty-five years, and I think he was on the board for twenty years before that. I remember him talking about it. My recollection is that the newspaper was supportive of the bond issue to build a county hospital, and among other things it was to replace St. Agnes. There was a big fight on where to put it. I remember that much. And then eventually, in order to get the county commissioners to be agreeable to doing it, they had to agree to put satellite units in Wake Forest, Fuquay, Apex, and Cary. I believe those were the four places. And that was to secure the support of the commissioners from those areas. And then they built the hospital, and then there was instant animosity between Rex Hospital and Wake Hospital. I think they called it Wake County. They used to call it Wake Memorial Hospital. And they brought Bill Andrews in as the executive director. I think he came right off the bat.

KATHLEEN KEARNS:

That's right.

FRANK DANIELS JR.:

And Bill built the hospital. I became friends with Bill Andrews in later times, but he played everything very close to his vest. Didn't want to share anything with anybody. Saw Rex Hospital as a competitor. The guys who were running Rex Hospital saw Wake as a competitor. And doctors didn't want to go back and forth between the two hospitals, so they had trouble getting the doctors to go to Wake.

---

Page 5

Then eventually they did start going to Wake, and then Wake started shifting its emphasis to the heart program somewhere along the way, and I don't know when that happened. And they started pushing the general surgeons out. They pushed them out by not scheduling good operating times for them.

KATHLEEN KEARNS:

You mean kind of gave preference to specialists?

FRANK DANIELS JR.:

Gave preference to the heart specialists. Which, as it turned out, was a very smart thing to do.

KATHLEEN KEARNS:

Why was that?

FRANK DANIELS JR.:

Because they make so much money on the heart program. When Medicare came in in 1965, something like that, that helped put Wake Memorial in a much better position. I've forgotten when [Raymond] Champ came to work.

KATHLEEN KEARNS:

It was '83, I believe.

FRANK DANIELS JR.:

Was it that late? And the hospital was going through its difficult times. I don't remember when it was we got in a lawsuit with them.

KATHLEEN KEARNS:

I went back and looked at my notes after you and I talked on the phone, and I came across an editorial in The News and Observer in February of 1980, and obviously a couple of things have taken place already, but your editorial was, "Officials of Wake Medical Center have circumvented the clear intent of at least two state laws by concealing the terms of their out-of-court settlement with three former emergency room employees." It goes on. Basically, it's bringing up the issue of having records be public. I'd like to hear from you what you remember about the sequence of events. I think that the actual termination of this contract with the emergency room doctors was '78 or '79, and that things went along for a little while before it came to a head.

FRANK DANIELS JR.:

They also had some problems, a little before that, with the guys who did autopsies. What do you call those people?

KATHLEEN KEARNS:

The coroners?

FRANK DANIELS JR.:

Not the coroner. At any rate, my recollection is that they didn't want to have open meetings. They had a fairly contentious board, because I think it was appointed by the county commissioners. Then I think it became sort of a self-perpetuating board.

KATHLEEN KEARNS:

There came a point where the board would nominate new members and then go to the county to approve them.

FRANK DANIELS JR.:

Yes. The county commissioners generally approved them. But the hospital started losing money, and the county was having to put more money into it. And I think that's when we started trying to cover it a little bit more. And then they wouldn't give us any records to look at. That's when we sued them, and won the lawsuit.

KATHLEEN KEARNS:

The suit went several rounds, is that right?

FRANK DANIELS JR.:

I don't remember. I don't remember how many rounds it had. I think it did go to Supreme Court. I think we won it at each level and they kept appealing.

KATHLEEN KEARNS:

I think that's right.

FRANK DANIELS JR.:

I believe that's correct. You know, we didn't have a choice. We didn't think we had a choice. I mean, you either had open records or you didn't. And we pretty firmly believed that you should pursue that. At the same time we sued the University of North Carolina also.

KATHLEEN KEARNS:

Over a similar issue?

FRANK DANIELS JR.:

Over public records.

KATHLEEN KEARNS:

And did you win that as well?

FRANK DANIELS JR.:

We won that. One of the suits over at the University of North Carolina had to do with the Valvano case, Jim Valvano, who was coach at N.C. State. And we sued them. They had a stay done, and we wanted to get a copy of the

---

Page 7

stay, and we sued to get a copy of the stay. We sued the president of the university. And we won that suit and we also won damages. So they had to pay our legal fees, and then we turned around and gave the legal fees back to the university.

KATHLEEN KEARNS:

What was the Valvano case? I don't know anything about it.

FRANK DANIELS JR.:

Jim Valvano was coach at N.C. State. A book was coming out about it, accusing State and Valvano of point shaving, of keeping kids in school when they didn't make the grades, two or three other things. The book came out and we had already covered everything there was to cover. And out of all of this brouhaha, it became apparent that none of the basketball players at State had graduated—maybe three out of twenty-five. And yet Valvano was a good coach, but he didn't care a thing in the world about getting the students graduated. And that got to be a big hoorah.

KATHLEEN KEARNS:

So you sued State?

FRANK DANIELS JR.:

No, we sued the president of the university. The president of the university has responsibility for the system.

KATHLEEN KEARNS:

OK, I understand.

FRANK DANIELS JR.:

So we sued him, who also was a good friend of mine. But that's unrelated.

KATHLEEN KEARNS:

Well, back to the Wake Med case, once you won, and I believe it was at the state supreme court level, what was the result for the newspaper? What happened next?

FRANK DANIELS JR.:

I think it wasn't long after that that Champ came. And Champ changed the way they did business, and they started doing most of their work in committees. And they opened up a lot of stuff to us. Well, as soon as it was opened up to us, we quit covering it. True in every newspaper in the world. You tell them they can't cover something, they're all over it, just all over it like a fly after honey. Ask them to cover it and they'll say, "No, there's nothing interesting there." So Wake, in my

---

Page 8

recollection, sort of slid into the background until such time as they wanted to be separated from the county. And that then became a big issue. And Champ came, and I think Champ was the one who led that.

KATHLEEN KEARNS:

That's right.

FRANK DANIELS JR.:

Led that issue. And he was right. We didn't really believe him, because we thought he was doing it partially to get away from any public oversight. He was doing it for different reasons, one of which was he didn't think it was fair that Rex Hospital knew was Wake was doing, but Wake didn't know what Rex was doing. Whether that's true or not, I don't know. They certainly felt that way. The biggest benefit to the newspaper and the public was once the Supreme Court ruled on that case, that became the criterion that you went to get public records from. You'd use that as the case. For instance, when we went in the University of North Carolina case, we cited the Wake Memorial case.

KATHLEEN KEARNS:

As a precedent?

FRANK DANIELS JR.:

For the precedent.

KATHLEEN KEARNS:

Interesting. I'm figuring it probably was around this period of the lawsuit, someone, I can't remember who, told me a story about Bill Andrews, and perhaps somebody else, coming down to speak with Claude Sitton in his office, and I guess there was a pretty heated exchange. I don't know any details about this.

FRANK DANIELS JR.:

Well, I don't know about that one, but there was one time he came, and it was Andrews and Sitton and myself and Lindley.

KATHLEEN KEARNS:

Lindley?

FRANK DANIELS JR.:

Tom Lindley. He was chairman of the board. I don't remember who else was in there, and Andrews I think accused us of not treating Wake Memorial the same way that we treated Rex because of our family connection to Rex. I thought it was a fair accusation. Sitton just went off. He exploded about being accused

---

Page 9

that we would do anything wrong. Yet he had no trouble accusing everybody else of doing anything wrong. He was off base. I had told him before we went into that meeting, I said, "Now, I don't need for you to get mad. It won't serve any purpose at all." Because he had a bad temper sometimes. And he was off base. In fact, I had to ask him to leave the meeting is my recollection of it.

KATHLEEN KEARNS:

This was a meeting at the newspaper offices?

FRANK DANIELS JR.:

Yes.

KATHLEEN KEARNS:

On McDowell Street.

FRANK DANIELS JR.:

[Affirmative sound.]

KATHLEEN KEARNS:

Do you remember when?

FRANK DANIELS JR.:

I have no idea when it was. Well, it would have been before Champ came. Champ came in '83, so it would have been sometime in the '70s.

KATHLEEN KEARNS:

So Claude Sitton didn't like the accusation of bias?

FRANK DANIELS JR.:

Oh, God, he couldn't stand that. He couldn't believe anybody would think he would be biased. Or that because I was involved, that I could influence him to be biased. It was attacking his integrity. That was just Claude.

KATHLEEN KEARNS:

Do you remember what you said to Bill Andrews during that meeting?

FRANK DANIELS JR.:

No. Why? What was I supposed to have said?

KATHLEEN KEARNS:

I'm just curious, because now you say that you think that he had a point. Is that right?

FRANK DANIELS JR.:

I don't remember. I think I probably denied it, but I didn't get upset about it. I have no recollection. I remember the meeting. I remember the room it was in, and I remember where I was sitting. I remember where Bill and Lindley were sitting. I can't remember whether they had a lawyer with them or not, or whether they had somebody else with them. I don't know whether Earl Bardin was in that meeting or not. He might have been. Have you talked to him?

KATHLEEN KEARNS:

In fact, I'm talking to him next week. I'll ask him if he remembers that.

FRANK DANIELS JR.:

He might have been in there. I just don't remember. Bardin was on that board for a long time.

KATHLEEN KEARNS:

And he was during that period.

FRANK DANIELS JR.:

He was chairman a right good while.

KATHLEEN KEARNS:

Do you remember Ed Hollowell?

FRANK DANIELS JR.:

Oh, yes. The lawyer. Inept. Inept. Built a hell of a practice doing hospital legal work. He was their lawyer on the open meetings, open records question. He didn't know what he was doing. Bill Lassiter just beat the shit out of him. He's dead now.

KATHLEEN KEARNS:

He was your attorney?

FRANK DANIELS JR.:

He was our lawyer. He was a First Amendment lawyer throughout North Carolina. He worked for the Press Association and usually if you had a First Amendment issue, on open records and open meetings, he was responsible for writing much of the open records and open meetings laws. Particularly after this case, there were always attempts to limit the effect of the case by the legislature, to say, "Well, you can have a closed meeting if you do certain things. And at that meeting, you may discuss personnel matters or attorney-client matters, or contracts, and acquisitions." I believe that was all of them. And then they started trying to broaden that out. There's a natural tendency on the part of public bodies not to want to have open meetings. It's just natural. And so it's a constant conflict.

KATHLEEN KEARNS:

So you don't remember if Ed Hollowell was at that meeting you were talking about?

FRANK DANIELS JR.:

Probably was. Probably was, but I don't remember.

KATHLEEN KEARNS:

Was it in your office? Was it in a conference room?

FRANK DANIELS JR.:

No, it was in a conference room just off the newsroom.

---

Page 11

The meeting I remember. And we used it as a meeting room, and it was maybe twice as big as this room, roughly. [Mr. Daniels' current office is approximately 15' x 15' to 20' x 20'.] But we had tables in there for people to sit around. I guess if I really work at it, I could remember. I could probably work back because it was before we built the board room. I don't remember. I've forgotten now.

KATHLEEN KEARNS:

OK. Well, if it pops back into your head, tell me.

FRANK DANIELS JR.:

Probably in the '70s, I'm thinking. That meeting with Andrews, of course, would have been before Champ came. So it had to be before the '80s. I think it must have been in the '70s.

KATHLEEN KEARNS:

But it was connected with the open meetings issue?

FRANK DANIELS JR.:

Yes, and open records, the meeting I remember.

KATHLEEN KEARNS:

All right. It may be that the person who told me about this, maybe they were talking about the same thing.

FRANK DANIELS JR.:

What did they think it was related to?

KATHLEEN KEARNS:

That's what they think it's related to. They described it as a meeting between Bill Andrews and Claude Sitton, and maybe they weren't aware [others were present]. They probably weren't there.

FRANK DANIELS JR.:

Well, it may have been two meetings.

KATHLEEN KEARNS:

That's possible too.

FRANK DANIELS JR.:

It may have been they got into a shouting match. Both of them were volatile, and neither one of them had real good judgment when they got volatile. And both of them were pretty proud. It may have been that the meeting I'm thinking about was the second meeting that came about because relations had deteriorated. And Lindley may have tried to put it together and brought me into it. I just don't remember.

KATHLEEN KEARNS:

So would you characterize that period as kind of a low point in relations between the hospital and the newspaper, or were there others?

FRANK DANIELS JR.:

In my judgment, the relationship between a newspaper and a hospital was unimportant.

KATHLEEN KEARNS:

Why do you say that?

FRANK DANIELS JR.:

It's not the position of a newspaper to have a relationship with a hospital. The newspaper should cover the hospital, should tell the readers about what the hospital's doing or not doing. Now you can cover it from a medical facility. You can cover it from a political facility. Not political—I mean a governmental facility that's funded by taxpayer money and therefore, are the taxpayers getting their dollars' worth from the hospital or is the hospital doing a good job medically? Well, hell, we're not competent. The newspaper wasn't competent to make that judgment. All the newspaper could do would be quote varieties of people who may or may not have had some competence. So I never thought we were supposed to have a particularly good relationship.

KATHLEEN KEARNS:

I didn't mean to imply that—.

FRANK DANIELS JR.:

I know you didn't. I know you didn't. I was going to get that on the record.

KATHLEEN KEARNS:

[Laughter] Just for clarity, I read the Centennial Celebration of Rex Hospital [Rex Hospital: A Centennial Celebration], which talks a lot about your family's association there. And I just wanted to doublecheck with you that what I got from that is correct. It says—this must be your grandmother, Addie Worth Bagley Daniels?

FRANK DANIELS JR.:

Yes, my grandmother.

KATHLEEN KEARNS:

Served Rex for more than 20 years, 12 of them as president of the board of trustees. You're nodding. That's correct?

FRANK DANIELS JR.:

Yes, that's correct. That's correct.

KATHLEEN KEARNS:

And that she was instrumental in getting financial assistance from the Public Works Administration in the Roosevelt Administration to

---

Page 13

build a new facility on that site. Now this is the '30s.

FRANK DANIELS JR.:

This was to build at the site on St. Mary's Street. That's correct. And they also built a nursing home, and they named the nursing home for her. I don't remember when. I think they built the hospital in '37, if I remember correctly, on St. Mary's Street. I was born in Rex Hospital on South Street, right down here. And they moved out there in '37. And I think they built the nursing home—. Because hospitals trained their own nurses in those days. And they lived there, like a convent almost. Wasn't really like a convent. It was more fun than that. But I do know that they named that thing after my grandmother, the wing, the nurses' home, that adjoined the hospital.

KATHLEEN KEARNS:

So was her husband the founder of The News & Observer?

FRANK DANIELS JR.:

Her husband, my grandfather, bought The News & Observer 1894 at a bankruptcy sale.

KATHLEEN KEARNS:

So it existed already?

FRANK DANIELS JR.:

It already existed. We traced the roots back to 1865, but the honest roots are really about 1881 or '82.

KATHLEEN KEARNS:

When it really got underway?

FRANK DANIELS JR.:

I think that was when it was first published as The News & Observer.

KATHLEEN KEARNS:

OK. And then your dad, Frank Daniels, Sr.—

FRANK DANIELS JR.:

I think my grandmother probably went off the Rex board—I guess she went off when they went to Mexico. My grandfather became ambassador to Mexico in '33. I don't know whether she stayed on the board later than that or not, but I'm assuming that's probably about when my father when on the board.

KATHLEEN KEARNS:

So he followed right after?

FRANK DANIELS JR.:

He followed right behind her.

KATHLEEN KEARNS:

And this said that he was a member of the board 31 years and was chair for 19. Does that sound right to you?

FRANK DANIELS JR.:

I thought he was chair for 25, but maybe it was 19.

KATHLEEN KEARNS:

And it has you as serving on the board from 1978?

FRANK DANIELS JR.:

That's about right.

KATHLEEN KEARNS:

OK, and chair starting in '91?

FRANK DANIELS JR.:

'91, yes. By then, we had adopted terms for chairmen. Before that, we didn't have terms for chairmen. And Richard Urquhart—in fact, you might want to talk to Urquhart. He's still around. His head's pretty good. Urquhart was chairman of Rex Hospital for 25 years.

KATHLEEN KEARNS:

What's his first name?

FRANK DANIELS JR.:

Richard Urquhart. [Spells.] Lives over on Marlowe Road in Drewry Hills. He was chairman for 25 years. He was the one that led the charge to move Rex Hospital to its present location.

KATHLEEN KEARNS:

OK.

FRANK DANIELS JR.:

And Sherwood Smith succeeded him. Sherwood at the time was chief executive of Carolina Power and Light.

KATHLEEN KEARNS:

What do you know—this is way back—about Rex's offering care for the indigent?

FRANK DANIELS JR.:

I don't think they did much. They did some. I ought not to say that because Rex did have a fairly good indigent care load, particularly when they were on South Street. And then when they moved to St. Mary's, I'm not sure how much indigent care they offered. And then Medicare came in, and Medicaid came in in the 60s, which changed the delivery of indigent care. And I know that Wake Memorial thought it was unfair. I know what it was. The county appropriated money to Rex Hospital to take care

---

Page 15

of indigent care, and Rex always claimed that it wasn't enough money. And so when Wake Memorial came into existence, shortly after that the county started phasing back the money that it gave to Rex for indigent care. They may have eliminated it. I don't remember that.

KATHLEEN KEARNS:

I had found something—let me just run this by you—that the city, actually the city of Raleigh, was paying $10,000 a year to Rex for indigent care. And I think this started in the 30s, but there was a thirty-year agreement, if I'm right about this, from 1935 to 1965, that Rex would take on this care and that the city would pay $10,000 a year. Of course, that overlapped with the beginning of Wake.

FRANK DANIELS JR.:

Well, Wake didn't open until, what—?

KATHLEEN KEARNS:

'61.

FRANK DANIELS JR.:

'61. I'm sure you're right.

KATHLEEN KEARNS:

Well, I'm trying to piece together things myself, and I know you have detailed knowledge of what happened at Rex.

FRANK DANIELS JR.:

Not really. I have knowledge, but not detailed.

KATHLEEN KEARNS:

[Laughter] OK.

FRANK DANIELS JR.:

I'll tell you who else is in town, I think, is Jack Willis.

KATHLEEN KEARNS:

I'm trying to reach him. I'd really like to talk to him.

FRANK DANIELS JR.:

You haven't been able to find him?

KATHLEEN KEARNS:

Well, I left a message on his home machine, but this was just a day or two ago, so I'll just give him a chance to call. But I would like to talk with him.

FRANK DANIELS JR.:

You ought to be able to find him. He might well remember things better than I do. I'm sure he does. Because he was there a long time.

KATHLEEN KEARNS:

One of the things that I wanted to ask you, and ask him as well if I do get to talk to him, is, thinking of the city as a whole—and I know this shifted over time—what role Wake filled as opposed to Rex, as opposed to Mary

---

Page 16

Elizabeth and then Raleigh Community.

FRANK DANIELS JR.:

Well, Wake was the indigent care, black facility for a long time.

KATHLEEN KEARNS:

How long do you think that was?

FRANK DANIELS JR.:

I'm not at all sure that didn't—. I think that changed about the time Champ came. Champ did a much better job than I thought he was going to do. I didn't think he was going to be that good. I just didn't think he was going to be a great administrator. He turned out to be very good. He did a great job for that hospital. I think it was Champ that got the open-heart surgery going. Could have been Andrews, but I don't think so. I don't think he was doing open-heart surgery.

KATHLEEN KEARNS:

It started at the very end of Andrews' administration. In fact, he had his own open-heart surgery there in '79.

FRANK DANIELS JR.:

Then it would have started in the 70s under Bill. They also had a pretty good orthopedic practice over there because orthopods didn't think that they got as much support from Rex Hospital as they needed in terms of operating time, nursing time, that sort of thing. So Wake began to build up its movement away from indigent care and began to move in by moving into specialties as I remember it. And the principal ones were orthopedic and also the heart work.

KATHLEEN KEARNS:

Did Rex perceive that as competition?

FRANK DANIELS JR.:

I'm sure we did. I don't remember. I know that Jack Willis and Joe Barnes saw it as competition. I never thought there was that much competition myself. I think my father saw it as competition too.

KATHLEEN KEARNS:

What do you remember of your father's views of Wake?

FRANK DANIELS JR.:

He didn't like Bill Andrews. He thought Bill Andrews was sort of a cowboy, that he was running Wake Memorial Hospital because it gave him a great big ego thrill. And that he was getting a lot of money out of the county. That he spent a lot of money that he didn't need to spend. My father was pretty close with a

---

Page 17

dollar, and he rode herd on the administrators pretty close. He didn't understand why Wake and Rex couldn't do joint buying, and I think Andrews rebuffed that idea at first. And maybe when he wanted to embrace it, Rex rebuffed it. I mean, there was plenty of room for pointing out that they were unnecessarily competitive and could have cooperated. And there was an awful lot of fighting amongst the doctors too. Some doctors didn't want to go to both hospitals. Some felt they had to.

KATHLEEN KEARNS:

Did it make any difference, the fact that Bill Andrews was an outsider, both in getting doctors to come there—?

FRANK DANIELS JR.:

Maybe. I think it was more a matter, though, that doctors weren't sure it was going to be worth their while.

KATHLEEN KEARNS:

Financially?

FRANK DANIELS JR.:

Financially, to go there. And then there was a feeling that the nursing staff wasn't as good at Wake Memorial. I think that feeling existed up until the mid- to late- 80s, that the nursing staff was not as good at Wake as it was at Rex. Now, whether that's a fair comment, I don't have the foggiest notion. I never had to go to the hospital at Wake.

KATHLEEN KEARNS:

Someone said that your dad went there once for some kind of test that wasn't available at Rex, something like that. What was that? Oh, electroencephalogram.

FRANK DANIELS JR.:

What's an electroencephalogram?

KATHLEEN KEARNS:

I was afraid you were going to ask me that. I don't really know.

FRANK DANIELS JR.:

I don't remember him ever going there. He could have. By that time, it wouldn't have made that much difference, I don't believe. I can't remember when he quit. I think he must have resigned from Rex about '74, '73, somewhere along in there. He stepped down as publisher of the paper in '71.

---

Page 18

He probably stepped down from the hospital about '74, would be my guess. He had heart trouble, so it was tougher for him to make the meetings. And when he stepped down as chairman, and got Urquhart to take his place—. I guess I could work it backwards. I think Urquhart served until '89, I think, as chairman. Then I came in in '91. Urquhart would have served as chairman to '88 probably. So 25 from '88, it would have been '73. So my father would have stepped down in '73. I think that's right.

KATHLEEN KEARNS:

I need to turn the tape over.

[TAPE 1, SIDE B]

[START OF TAPE 1, SIDE B]

KATHLEEN KEARNS:

Well, I guess we could go back to the issue of public openness. There were a series of articles that I read about the board's retreats at Hound Ears and other locations.

FRANK DANIELS JR.:

I'd forgotten about that. And not just Hound Ears. They also went to Pinehurst, I think.

KATHLEEN KEARNS:

That's right, and also somewhere up in Virginia.

FRANK DANIELS JR.:

And it was a waste of money, and the only reason they did it was to get away from the newspaper coverage. And so then the newspaper started going, and they didn't want to let them in. I remember that. I'd forgotten about all that. You know, it was an automatic thing with the newspaper. There were two things you could never do as a public official. You couldn't buy an airplane for the governor or for the state. And you couldn't have an out-of-town retreat. The newspaper just automatically jumped all over that. Whether they had any reason to or not. So they were all over the retreats.

KATHLEEN KEARNS:

Did Rex's board always meet in town?

FRANK DANIELS JR.:

Yes. Rex never had a retreat. I think the first retreat we had was after I became chairman. No, I guess maybe it was when Sherwood was chairman. We stayed here in town. We just moved off-site. See, retreats became popular along about then. Wake also used to take all of its trustees to the annual hospital meeting, which was usually someplace like Phoenix or Hawaii or someplace like that, and they would consider that compensation. We always looked down our noses at that.

KATHLEEN KEARNS:

Compensation for the board members? A little perk?

FRANK DANIELS JR.:

Yes. And they'd take spouses along.

KATHLEEN KEARNS:

What's the norm? I mean, do board members of a hospital—I'm talking nationwide—would they normally get any kind of recompense?

FRANK DANIELS JR.:

No.

KATHLEEN KEARNS:

It would be strictly volunteer?

FRANK DANIELS JR.:

I think it's always been. UNC Hospital is volunteer. Wake is volunteer. Rex is volunteer. I don't know that many other hospitals. But I would be surprised. Now, I think if you're on a community hospital board, like that's owned by a private corporation, then you get compensation.

Like Raleigh Community when it was owned by—, who? H.C.A.

KATHLEEN KEARNS:

Humana? Not Humana, H.C.A.

FRANK DANIELS JR.:

You haven't mentioned the lawsuit between Rex, Wake, H.C.A., the company down in Georgia that sued Rex and Wake for anti-trust activity, and then they let Wake out of it. They sued Rex. And that started before I got on the board.

KATHLEEN KEARNS:

Before you got on the board at Rex. So before '91?

FRANK DANIELS JR.:

Before '78.

KATHLEEN KEARNS:

I'm sorry. Before '78. OK.

FRANK DANIELS JR.:

It lasted about seven years. It went to the Supreme Court once and we lost. I remember sitting in federal court when we lost the first one. And we had a lawyer there named Tom Steed, perfectly nice guy who was inept. I wouldn't want you to tell him I said that.

KATHLEEN KEARNS:

I won't. I'm just writing down his name for spelling.

FRANK DANIELS JR.:

But he was in over his head. They were represented by Jerry, Jerry—part of Young, Moore, and Henderson. Can't think of Jerry's last name right this minute. At any rate, he destroyed the Rex case in three sentences. And then the judge destroyed it by refusing to admit certain evidence. It was a screwy judge. We ended up going back, hiring a law firm out of Washington, and won the case. I can't remember whether it went all the way back to the Supreme Court or not. I think it did, and Rex won all the way through on the second go-round.

KATHLEEN KEARNS:

And what was the charge?

FRANK DANIELS JR.:

The charge was that Rex and Wake and the state—I believe the state—had conspired to keep H.C.A.—but it wasn't H.C.A. Charter, Charter. To keep Charter, which is out of Augusta, Georgia, to keep Charter from coming in and expanding Mary Elizabeth.

KATHLEEN KEARNS:

OK. So this was mid- to late-70s. Right around in there.

FRANK DANIELS JR.:

I know it was before '78.

KATHLEEN KEARNS:

Weren't there some discussions between Wake and Rex about coordinating facilities?

FRANK DANIELS JR.:

Yes.

KATHLEEN KEARNS:

What do you remember about that?

FRANK DANIELS JR.:

Nothing. I really don't remember.

KATHLEEN KEARNS:

Because it was before you were on the board?

FRANK DANIELS JR.:

Before I was on the board. I remember my father going to—. See they also had—the state had the—. What the hell's the name of it? I haven't thought of it in five years.

KATHLEEN KEARNS:

The agency that regulated that?

FRANK DANIELS JR.:

The agency that determined what could be built and what couldn't be built. And they were part of the whole thing too. We were just poorly lawyered, both Rex and Wake. Wake may have done better than Rex did on that. I remember my father telling me. He went somewhere they had some outside group of experts who said that Rex should become a children's hospital. I remember him telling me about that. He got mad. He didn't usually get mad. But he got mad, and I think it was a meeting or dinner at Angus Barn that involved some of the people from Wake and some of the people from Rex, maybe both boards. I don't remember that. At which this expert said that the best utilization of the hospitals would be for Rex to become a

---

Page 22

children's hospital. And apparently that set him off. I just sort of vaguely remember that. There were about four, five years in which neither one of us was on the board.

KATHLEEN KEARNS:

Neither your father nor you?

FRANK DANIELS JR.:

I didn't want to be on the board. I resisted it.

KATHLEEN KEARNS:

Why?

FRANK DANIELS JR.:

Listen, it's enough to be a natural-born publisher. I didn't need to be a natural-born hospital trustee. But Urquhart finally talked me into doing it. I didn't like hospitals, so I didn't want to be on the board. And I ended up being on two hospital boards. But that happens. But that was a pretty intense time. That was one of the reasons that Dick Urquhart stayed on as chairman of Rex Hospital so long because they froze his assets. The court froze his assets because Rex lost the first suit. And then there was a fight with the insurance company, whether the insurance company was going to cover Rex. Because they sued Urquhart personally as chairman as well the hospital itself.

KATHLEEN KEARNS:

So his personal assets were tied up?

FRANK DANIELS JR.:

Yes.

KATHLEEN KEARNS:

Wow. I don't know how much more time you've got to give me today, but I did want to ask you your observations of Bill Andrews and of Ray Champ as people, as administrators.

FRANK DANIELS JR.:

I think I've pretty well covered that. I didn't think much of Andrews until after he left Wake and I got to know him better. And I remember telling my friend Mel Finch. Mel Finch was the chief financial officer of the News and Observer, and he and Andrews used to play tennis together. I remember I used to tell Finch, I said, "Finch, every man's got to have one friend who's a real asshole. And your asshole friend is Bill Andrews." Well, later, after I got to know Bill, I enjoyed him. He was loud and he was abrupt and he was sometimes rude and thoughtless, but he had a pretty good sense of humor. And I got to the point where I liked him.

---

Page 23

I think he was a builder and not an operator. He built the hospital. He should have left after five years. When he retired, he became sort of a traveling hospital administrator and consultant. That's probably what he was best at. He was best at flying in, seeing a problem, either fixing it or putting a Band-Aid on it, and the longer he stayed, the worse it got, was my view of Bill Andrews. That's probably unfair. That's probably unfair, but that was my impression of him. Champ came in, came from West Virginia, I think.

KATHLEEN KEARNS:

That's right.

FRANK DANIELS JR.:

And he was pretty close to his vest too, in terms of what he was going to do and not do. But he understood the competitive nature of hospitals, of how hospitals had become competitive. And I think he did a better job of planning that and looking forward. Turned out to be a very good hospital administrator. He convinced people that they should become not-for-profit. He reached an accommodation, at least. I never was convinced that he was right, but I was convinced that he wasn't doing it for the wrong reason. And my first instinct was he was doing it for all the wrong reasons.

KATHLEEN KEARNS:

Why did you think he was doing it?

FRANK DANIELS JR.:

I just couldn't see the logic in what it was he was going to accomplish by not being a county hospital.

KATHLEEN KEARNS:

By making the facilities more attractive and that kind of thing?

FRANK DANIELS JR.:

Oh, I didn't have a problem with making the facilities more attractive. But I thought he was trying to do it to get out from under the county. And I didn't realize how much the county constrained what he could do.

KATHLEEN KEARNS:

Do you think moving to becoming a private non-profit was a good thing in the end?

FRANK DANIELS JR.:

Yes. The community's been better served.

KATHLEEN KEARNS:

Again thinking about the community as a whole,

---

Page 24

looking back over the last forty-plus years, how would you describe Wake's role in integrating health care in Raleigh?

FRANK DANIELS JR.:

You mean racially?

KATHLEEN KEARNS:

Racially.

FRANK DANIELS JR.:

Oh, they did it. Wake did it. Rex didn't do it. Rex followed later. I don't think Rex ever had any policy against treating blacks. They just didn't do it much. And they weren't made to feel welcome. But the people who lived over on Oberlin Road, which was a black community, I don't know when they started going to Rex, but I know they went there. But I don't know that they felt comfortable there. But Wake led that issue.

KATHLEEN KEARNS:

Did that start to change at Rex with Medicaid and Medicare in the mid-1960s?

FRANK DANIELS JR.:

Probably, probably. That would be my guess. I don't really know.

KATHLEEN KEARNS:

Are both hospitals equally integrated now?

FRANK DANIELS JR.:

I don't know. I would guess that there are more blacks at Wake than there are at Rex, but I don't really know that. One thing is the locality would make a difference.

KATHLEEN KEARNS:

Sure, sure. Anything you want to say about the controversy around buying land for Western Wake? Do you remember this, back in the late 80s, sometime in the 80s? Harvey Montague, who was on the board of trustees—.

FRANK DANIELS JR.:

His brother just died.

KATHLEEN KEARNS:

Oh, did he?

FRANK DANIELS JR.:

I saw it in the paper this morning. You know, I'd forgotten all about that. I don't know. I don't know enough about that to remember. I remember Tex, his wife, worked at First Federal Savings and Loan. I don't remember enough about that to be able to be a very good source on that.

KATHLEEN KEARNS:

OK. Anything else you want to say about Wake?

FRANK DANIELS JR.:

It's turned out to be a good hospital. They've done some great things in trauma. Took my grandson out there a couple years ago. He had slammed his finger in the door. And the doctor recommended I take him to Wake, because Wake's got the affiliation with UNC-Chapel Hill, so therefore they've got residents and interns. Rex doesn't have residents and interns and hasn't had them. I don't guess they've had them since Wake opened. I don't remember when they quit having interns, but it was before my time.

KATHLEEN KEARNS:

But they did use to?

FRANK DANIELS JR.:

They did use to have interns. I don't know. Maybe it was when they discontinued—. I don't remember when they discontinued the nursing home, but I think it was probably in the early '70s. And of course, I don't think Wake ever had a nursing school.

KATHLEEN KEARNS:

No. They planned to. They built a building for it, but as far as I've been told, it never served that [purpose].

FRANK DANIELS JR.:

Then nursing training switched over to the community college system, and the community college system came into existence in the 60s. And that was one of the things that they did.

KATHLEEN KEARNS:

Anything else you'd like to say?

FRANK DANIELS JR.:

No. Anything else you want to ask?

KATHLEEN KEARNS:

I don't think so. I think we've covered it. Thank you.

FRANK DANIELS JR.:

You're welcome.

KATHLEEN KEARNS:

OK. I'll turn her off. Thanks.