Gov. Beverly Perdue went last night to see the former Army barracks in Butner where mentally ill children live and receive treatment.

Her visit came the day after a News & Observer published an article about maintenance and insect problems in the children's quarters at the old John Umstead Hospital, Lynn Bonner reports.

Adults have moved to a new hospital about a mile away, while children are still in the World War II-era buildings. A patient advocacy group wants the kids moved to the new hospital, too.

A short description of Perdue's visit appears on her blog, but she did not say what she thought of the place.

When reporters toured the old Umstead buildings yesterday morning, the units they visited had heat.

Hospital administrators said the buildings in the old hospital the state is refurbishing for the children were good spaces for them.

The N.C. Department of Health and Human Services has agreed to pay an Oxford woman $320,000 to settle a sexual harassment case involving a former supervisor at John Umstead Hospital with a prior history of mistreating female workers, according to the woman's lawyer.

Dorothy Hawley won the settlement last month, Raleigh lawyer Jack Nichols said in a news release. Her former supervisor, James Hobgood, had been convicted of assaulting she and another female employee in October 2000. Hawley had also accused him of on-going sexual harassment, Dan Kane reports.

Hawley filed suit against Hobgood and the state five years ago, and evidence showed that Hobgood had been fired from another state facility 22 years earlier. In that case, Hobgood had been disciplined for sexual harassment after complaints from female staff. His personnel file noted that he was "not eligible for re-employment with the state," Nichols said.

"Our firm felt that Dorothy Hawley was entitled to a remedy for her mistreatment by James Hobgood and John Umstead Hospital," Nichols said. "Public employers are now on notice that they are subject to such claims in the same way that private employers can be held liable. For John Umstead, the cost of not checking on an employee's prior behavior was a six-figure damages award."

Hawley had won $433,000 in damages from the N.C. Industrial Commission, but the state appealed the award. Mediation resulted in the $320,000 settlement.

Nichols said the lawsuit represents the first time someone had sued the state under a claim of negligent hiring, negligent retention and negligent supervision of an employee.

Politics + Media = extra $$.

The new state mental hospital needed more than a regular old director.

That's why the state Department of Health and Human Services had to hire J. Michael Hennike as a contractor to run Central Regional Hospital in Butner, it explained in its contract, Lynn Bonner reports.

DHHS hired him under a contract with the UNC-Chapel Hill medical school's psychiatry department for $185,012.

"CRH is in the middle of merging operations between John Umstead Hospital and Dorothea Dix Hospital and the process is highly political and involves the media," the contract's "problem statement" says. "A seasoned manager with vast experience is needed."

Hiring Hennike as a contractor allowed DHHS to pay him about $70,000 more than the going rate for hospital directors.

Although DHHS announced Hennike started Jan. 1, DHHS said he's actually been running the place since Nov. 1. That's when his contract started.

Mark Van Sciver, a DHHS spokesman said Mike Lancaster, the interim director who made way for Hennike, was the "titular head" for a while. Hennike is expected to run Central Regional for two years, according to the contract.

Hennike, who ran the Murdock Center in Butner for years, suspended his state pension payments Dec. 1, according to the state treasurer's office.

Correction: An earlier version of this post misstated the salary. 

The SBI has ended its probe into the purchase of portrait by former state mental hospital director Patsy Christian without action.

The investigation was requested by the state Department of Health and Human Services in June following reports in The News & Observer about a painting of herself that Christian commissioned from J. Lee Harris, a hospital nurse who sidelined as an artist, reports Michael Biesecker.

The artwork was paid for using vending machine revenue from John Umstead Hospital that the state budget manual says should be spent to benefit patients.

Following public uproar about the portrait, Christian resigned her position as chief executive officer of Central Regional Hospital in Butner and was reassigned to a newly created position within the department at 95 percent of her former salary.

DHHS Secretary Dempsey Benton ordered that the portrait not hang in the new hospital for which it was commissioned and that state money paid for the artwork be recovered. Harris refunded the $572 she was paid for the "executive portrait" and its gilded frame.

Though state law explicitly forbids the awarding of state service contracts to state employees, Erik Hooks, an assistant SBI director, wrote in an Aug. 14 letter that he had concluded "no further inquiry by the SBI is necessary at this time."

More after the jump.

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