updated 12/28/2005 1:54:14 PM ET 2005-12-28T18:54:14

A climate of “fear and retribution” kept workers in St. Vincent Medical Center's now-closed liver transplant program from speaking up about a serious ethical breach and prompted them to cover it up by falsifying documents, according to a new federal report.

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The breach occurred in 2003 when the hospital improperly arranged for a man to receive a liver intended for a higher-priority patient, who ultimately died without undergoing a transplant.

The hospital's acknowledgment of the breach in September spurred the inspection by the U.S. Centers for Medicare and Medicaid Services.

"Several transplant staff members described a working environment that did not foster openness but ‘fear and retribution,’ especially when staff voiced certain complaints or grievances or even when making recommendations," the report said. "One staff member stated that the transplant director at the time had a 'my way or the highway' attitude that prevented staff from raising any concern."

Furthermore, the scathing 99-page report concluded that the hospital misled the patient for whom the donated liver was originally intended by telling him that he was still a candidate for an organ even after he was removed from the waiting list when the liver was transplanted into someone else.

The report also found that St. Vincent was out of compliance with eight conditions that must be met by hospitals receiving federal money. The hospital could lose its federal funding if the problems persist.

Hospital officials, in a response attached to the report, said they had taken steps to address the shortcomings including establishing a new transplant committee that answers directly to the hospital's governing board and creating a hot line for employees to report problems.

St. Vincent closed the liver transplant program last month and terminated its contracts with the doctors who ran it, Richard R. Lopez and Hector Ramos.

Attorneys for both doctors said their clients did nothing wrong and never ordered anyone to cover anything up or submit false information to regulators.

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