Tenet's Barbakow Turns Tables in WorldCom Loss

Barbakow cashed in a huge slug of Tenet stock just two weeks after touting the company's strengths in January 2002. In an appearance on CNBC's "Squawk Box," Barbakow celebrated Tenet's quarterly performance as "sensational" and portrayed the company's growth strategy as a sustainable one that would deliver strong results for years to come.

"We're in a sensational period right now in terms of our operations," Barbakow gushed. "Everything is going really well for us. And it's a real exciting, fun time."

But the fun didn't last. Tenet found itself accused of bilking Medicare -- and even performing unnecessary surgeries -- before the year came to an end.

As a result, Barbakow's claims to CNBC ring hollow to some ears. Barbakow portrayed Tenet's Medicare business as safe even though the company was quietly -- and aggressively -- exploiting a Medicare loophole to achieve much of its spectacular profit growth. He claimed the company was "driving customers to our hospitals," particularly for lucrative business like cardiology, when indeed some patients found themselves lured in for dangerous heart procedures that may have never been necessary. He said the company had found a way to offer patients "an experience in our facility that's different from all other facilities."

Barbakow also insisted that Tenet "very seldom discontinues services," even though it has done just that and closed down some hospitals entirely. He pointed to Tenet's turnaround of a bankrupt Philadelphia hospital chain -- including a landmark hospital it has been fighting to shut -- as proof that the company was some kind of savior. The same chain is now weighing on the company's results.

"What we've done in that community is staggering," Barbakow declared at the time. "The Oprah show ... had one of our patients who recently received the artificial heart on the show. And it brought tears to my eyes."