The federal probe is examining runaway costs at Fletcher Allen Health Care, the state's largest hospital, along with Vermont State Hospital and the 12 regional Visiting Nurse Associations.

The investigation, which - curiously - has attracted no national media attention, was formally launched in December, after the private accounting firm KPMG warned that the Dean adminstration and its successor had failed to put in place adequate safeguards to oversee the nearly $1 billion in federal funds spent in Vermont.

The hospitals and agencies involved in the scandal were asked to supply federal investigators with a trove of documents shortly after the probe was announced.

Perhaps because of the politically sensitive nature of the probe, the Justice Department has declined to detail any of the suspected wrongdoing, with spokeswoman Gina Talamona saying only, "We do not have a comment at this time."

However, as far back as 2002, while Dean was still governor, his name surfaced in connection with complaints of runaway costs.

In a front-page story headlined "Anatomy of a Scandal," The Burlington Free Press noted that Fletcher Allen, the primary facility now under federal scrutiny, "obtained the financing for [an expansion] project through its usual channel, Salomon Smith Barney's Harlan Sylvester, a close adviser to Gov. Howard Dean and father of David Sylvester, one of the hospital's outside attorneys."

Reporting two years after the hospital expansion project was approved, the Free Press complained:

"The hospital is under investigation by state and federal prosecutors. Its top executives are gone and its board is under fire. The cost of the project has doubled, and the state's regulatory process is under scrutiny.

"Since early 2000, hospital management had been devising an elaborate plan to evade state scrutiny of at least $150 million in construction costs," the paper said.

"Their plan included misleading state regulators, an off-the-books loan and a policy of keeping hospital trustees in the dark, according to a report by Fletcher Allen trustees who conducted an internal investigation."

At the time, Vermont Rep. Bernie Sanders said the Dean administration dropped the ball by not intervening as the spending scandal spiraled out of control. "The governor's role should have been a very strong role," he complained.

Then-Gov. Dean did not repond to inquiries about the matter from the Free Press.

Editor's note: