This is the second of three days of special coverage of Nebraska' GOP Senate race.
Saturday: Deb Fischer - Why hasn't the Sandhills candidate caught fire? Fischer: Don't count me out
Monday: Don Stenberg - Does he represent a safe harbor or a ship that's sailed? Stenberg: 'Learn from elections lost'
May 1: Republican Race for the Senate: An Omaha World-Herald Debate. Click here to learn more.
Nebraska Attorney General Jon Bruning once co-owned a Botox spa that injected itself into his public role as the state's top prosecutor.
The fat-melting, age-fighting Omaha business, Devenu Medical Rejuvenation Center, had interests and troubles that splashed over into the legislative arena and the Attorney General's Office on several fronts:
» The center's doctor was disciplined for inappropriately dispensing Valium and eventually entered into a settlement agreement with Bruning's Attorney General's Office.
» One of Bruning's co-owners testified against a bill in the Nebraska Legislature to stop Devenu and other spas from performing a controversial procedure to melt body fat.
» A woman working then as an aesthetician at Bruning's spa once called him at the Attorney General's Office to voice concerns about how the medical spa's doctor was storing Botox needles and was told by someone who called back not to call again.
The medical spa was one of numerous businesses Bruning has invested in over his decade in office.
It illustrates concerns about whether Bruning's business holdings and relationships created conflicts of interest for an attorney general who is now the front-runner in the GOP nomination battle for the U.S. Senate.
In the past, Bruning has been criticized for buying a lakeside home near Ashland, Neb., with two top executives of Nelnet, the student loan company. The purchase came a year after he tried to waive a $1 million state settlement with Nelnet over improper business practices.
Last week, Bruning was accused by a Lincoln businessman of sitting on the results of an investigation into the Nebraska Department of Banking and Finance. His accuser, Lincoln financial adviser Bob Bennie, attributed that, in part, to Bruning's banking interests and his connections to the department.
Bruning has categorically denied Bennie's allegations, saying they were fueled by a political agenda and Bennie's support for a rival, State Treasurer Don Stenberg. He also said his decision to invest in the lakeside house with Nelnet officials had nothing to do with his decision to try to allow Nelnet to avoid paying the $1 million.
On the subject of Devenu, Bruning declined to be interviewed. He issued only a short statement via Trent Fellers, his campaign manager.
"(Bruning) was a passive investor not involved in the day-to-day operations of the business," Fellers said.
Bruning is one of three top Republicans running for his party's Senate nomination, along with Stenberg and State Sen. Deb Fischer.
More 2012 election coverage
Debate: GOP Senate candidates Jon Bruning, Deb Fischer and Don Stenberg will come together in Omaha at 7 p.m. on May 1. Watch live on NET TV and Omaha.com, and follow along with updates in a live chat on Omaha.com. To submit a question for consideration, send an email to Robynn.Tysver@owh.com.
Omaha.com: Our new election page is the best resource for campaign coverage. Read recent stories and tweets from our reporters and the candidates, and find your polling place and get to know the issues in our candidate bios. Omaha.com/election
Aaron Trost, Fischer's campaign manager, said Bruning's involvement with Devenu showed "poor judgment" and said the attorney general needed to conduct a "makeover" of his business connections and disassociate himself from any that could conflict with his job as attorney general.
"The chief law enforcement officer of the state should be focused on fighting crime and protecting Nebraska consumers, not running a boutique Botox medical spa riddled with conflicts of interest," Trost said.
Stenberg has accused Bruning in the past of having a "reckless disregard" for potential conflicts of interest. On the subject of the spa, Stenberg said only: "I have no knowledge of the facts of this case. If the alleged facts are true, they speak for themselves."
Bruning owned 25 percent of the Omaha medical spa for about four years, a fact he disclosed in his 2006 state financial report and a subsequent federal report from his first Senate bid, which he abandoned in 2007 after U.S. Secretary of Agriculture Mike Johanns joined the race.
Bruning helped form Midwest Medical Aesthetics, the spa's holding company, in the fall of 2006 with several longtime friends, including David Gale, a banker who also is the son of Nebraska Secretary of State John Gale.
Devenu billed itself as a medical spa that provided massages, permanent hair removal and Botox injections. It also provided a procedure known as lipodissolve, the injection of a chemical cocktail to melt away fat.
Lipodissolve has been criticized as untested and unsafe. In 2008, a bill was introduced in the Legislature to ban the procedure. Bruning's business partner, Gale, testified against the bill, arguing the treatment was an effective, nonsurgical alternative to remove fat.
The bill went nowhere.
In 2010, the U.S. Food and Drug Administration issued a strong warning against lipodissolve, saying there was no proof it worked and warning against possible side effects, including "painful knots" under the skin.
Devenu no longer does the procedure.
A young aesthetician named Rene Gottsch worked there for about eight months when it did. She said the job wasn't a good fit and she left in the spring of 2009. She admittedly did not get along with the spa's chief medical officer, Dr. Julie Waddell.
Gottsch began to have concerns about how the clinic was run, she said. Among them: She said she saw some used Botox needles being stored in coffee cups in the office refrigerator. She has shown The World-Herald pictures of needles in a cup that she says contained Botox.
She called Bruning to voice her concerns. She had met him as the spa's owner and knew he was the state's top law enforcement officer. She thought he would want to know.
Gottsch called Bruning at his Attorney General's Office. She says he quickly got off the phone, telling her he was busy. A few hours later, a woman called and told Gottsch not to call again, saying Gottsch's call represented a "conflict of interest."
"She used some big words, saying it interfered with what his job is in the State of Nebraska," said Gottsch, 28, who has long since left Devenu.
Gottsch says she was fired a short time later, after she declined to participate in a medical procedure for which she had not been trained.
As for Bruning, he declined to talk specifically about Gottsch's call, but his campaign manager said on his behalf that Bruning, a passive investor, wasn't going to get involved in discussions with unhappy employees.
Gottsch eventually told another state agency about her concerns, after an aesthetician license review because of a DUI conviction. She told her story to the Nebraska License Assistance Program with the Nebraska Department of Health and Human Services.
Diane Fulcher, the new owner of Devenu, said the HHS investigation took place, but she said Gottsch's allegations were "found groundless." Such investigations are confidential and become public only if any of the parties or facilities are disciplined, said Marla Augustine, an HHS spokeswoman.
Devenu has never been disciplined.
Dr. Waddell has.
In 2007, when Bruning owned Devenu, Waddell wrote a prescription for Valium for a "stock supply" for her clinic, according to state disciplinary records. She sent an employee to have the prescription filled, which the pharmacy declined to do.
That same year, a nurse at Devenu gave a patient 10 milligrams of diazepam, another name for Valium, from a prescription bottle labeled with the name of Waddell's husband, according to the state petition for disciplinary action.
It is considered unprofessional conduct for a doctor to give a patient a drug prescribed to someone else. It also is considered misconduct for a doctor to write a prescription for stock uses rather than for an individual.
It is unclear when the investigation into Waddell's prescription problems began, because it is not a matter of public record.
But the process works like this: An investigation is started by HHS, which then sends its findings to the Nebraska Medical Board. That board turns over the results of the investigation to the Attorney General's Office, which determines whether there is a legal basis to take action.
It is the job of the Attorney General's Office to file civil complaints against health care professionals. In 2010, the Attorney General's Office handled 1,103 licensure cases.
Nearly three years after Waddell wrote the prescription — and six months after Bruning sold the business — the Attorney General's Office settled with Waddell. The settlement was approved by Nebraska Chief Medical Officer Joann Schaefer in November 2010.
Waddell was fined $7,500 and required to take a course in prescribing drugs.
Fulcher called the case a "one-time thing."
"It's settled, done. That's in the past," said Fulcher, who described Waddell as a "wonderful" doctor.
Waddell declined to comment.
When it came time to sell Midwest Medical Aesthetics, Bruning asked Jennifer Fulcher — his Senate campaign's finance director — if her father-in-law, Thomas Fulcher, and her brother-in-law, Jon Fulcher, would help find a buyer for the business.
"They looked at it and said it's a great business. We're interested," said Diane Fulcher, Jon Fulcher's wife.
She said Bruning decided to sell in May 2010 because of his upcoming Senate bid.
"Mr. Bruning knew he wouldn't have time in the Senate race," Fulcher said, "with too many balls in the air."
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