Bloch, who died at 38 after being diagnosed with a routine case of appendicitis, was the Democratic leader in the State Assembly from 1924 until 1929. He managed Robert Wagner Sr.’s campaign for U.S. Senate in 1926 and played a key role in Franklin Roosevelt’s gubernatorial campaign in 1928. His career and his mysterious death became intertwined with Judge Crater’s fate when I stumbled across a letter from F.D.R. that mentioned my grandfather as the sponsor of a judge who was associated with Crater. I’ve been researching the connection for years, which is why some friends actually thought that Crater, not Bloch, was my grandfather.

Maurice Bloch died in 1929, at a time when the buying and selling of judicial nominations was at its height. He was corresponding with F.D.R. about obtaining a State Supreme Court nomination in 1929, but the plan was foiled because it was too late to nominate Bloch for a seat that had been vacated in August by Tammany Hall’s candidate for Manhattan District Attorney, Thomas C.T. Crain.

Instead, Bloch went back to work managing that year’s State Assembly races and helping to plan F.D.R.’s 1930 re-election campaign. Roosevelt planned to appoint Bloch’s law partner, John A. Mullen, to the bench temporarily, with the understanding that Mullen would step down after the 1930 session and allow Bloch to run for the seat. But the appointment became stalled in late 1929, when various Tammany factions were quarreling over who should get the post.

Then Bloch died, suddenly, on Dec. 5, 1929, in Roosevelt Hospital. It was a huge story at the time, because Bloch was a rising star in New York politics. An obituary in The New York Times stated that Bloch was found “deal”—not “dead.” A typo, or a Freudian slip? What’s more, there’s a question mark on my grandfather’s death certificate next to his cause of death. There was no autopsy; his death was attributed to “exhaustion”—an odd way for a healthy 38-year-old to die.

In the meantime, F.D.R. still hadn’t filled the vacant State Supreme Court seat that my grandfather wanted. Another one became vacant a few weeks later, when Joseph Proskauer resigned. Judge Crater got the job. A few months later, he got into a cab and was never seen again.

Crater and Bloch knew each other very well through Senator Wagner—Crater had been Wagner’s law secretary and Bloch had been Wagner’s protégé. Crater and Bloch (and Mullen and Wagner) were doing Tammany business together for years before Bloch died and Crater vanished.

Recent news reports indicate that a bad cop—ironically named Good—murdered Crater with the help of two accomplices and buried him in Coney Island. The remains of five people had been found at the Coney Island site in the 1950’s, and now tests are being conducted to see if one set of remains could be Crater’s. If the tests are positive, a 75-year-old mystery will have been solved—but I still have questions about my grandfather’s death, and what connections there might be between the fates of Maurice Bloch and Joseph Force Crater.

The biggest stain on Bloch’s character involved the indictment of a General Sessions judge named Francis X. Mancuso from East Harlem. Mancuso was forced to resign his post amidst a financial scandal. My grandfather used his influence to get a Tammany man named Amedeo A. Bertini on the bench to replace Mancuso. Then, according to the plan, my grandfather would get Crain’s spot. Like in baseball, Bloch and his friends were looking to make a double switch.

Bertini was soon found to have withdrawn $100,000 from his bank account at the time of his appointment. There’s a picture of him at Crater’s swearing-in; he looks spooked. Crater was a frequent visitor to Bertini’s chambers after the $100,000 was withdrawn. Some of that money, I suspect, was to be used for Bloch’s judicial campaign. Why else would Bloch nominate Bertini, who was largely considered unqualified?

During the ensuing investigation of Bertini, Crater surely would have been called to testify about his relationship with his friend and fellow judge, who refused to waive immunity. But he was nowhere to be found.

Though Bloch’s death was attributed to exhaustion, I suspect a more sinister turn of events. I do know that a well-connected aspiring judge died for no apparent reason, not long before another judge disappeared forever. Even if the police and the press close the books on Judge Crater, I’ll still be keeping them open.

The titles, too, surrender references and intent: Ganges R. refers to the river, Miniature Ice Age to prehistory and Warmest on Record to global warming. Going out on a limb, you could say that Mr. Mullen's reliance on black and white connotes an environmentalist message: It's gritty, harsh and, indeed, smoggy character is emblematic of a planet in dire condition.

Mr. Mullen is entitled to his eco-politics, but what makes the work interesting is how unnatural it is. The chosen medium (acrylics, i.e., plastic paint), the process (a systematic placement of controlled incident), the touch (anonymous and secondhand) and the sparse palette (anything but green)-each attribute points to an aesthetic powered by cold calculation. At his best, Mr. Mullen transcends premeditation by thoroughly embracing it. He doesn't flow like a river; he hums like a well-oiled machine.

The recent work prompts its share of quibbles. How well the paintings are served by the artist's insistence on a 26-by-20 format is a good question-oftentimes, the images feel ill at ease within the confines of the canvas-and more color would be welcome. But Ganges R. and the lone big picture, Henge Avenue, are smart and tight and snappy in the right measures. They're enough to make you grant, and then take pleasure in, Mr. Mullen's naturalist eulogies.

John Mullen: Incursions is at the Howard Scott Gallery, 529 20th Street, until June 11.

Academic Oils

Alex Kanevsky, whose recent works on canvas are at the J. Cacciola Gallery, is the kind of painter I spent my entire stint in art school hating. There's nothing this guy can't do with oil paint. Dabbing, dotting, jabbing and smearing-each flick of Mr. Kanevsky's brush hits its mark, and on the first go, too. Oil paint, that contrary substance, succumbs-willingly! gratefully!-to his silky seductions. Mr. Kanevsky's investment in the figure is deep-seated: His pictures of models in the studio, a nude woman at the opera and an orgy in the living room betoken a painter whose knowledge of the human form is beyond reproach.

That doesn't make him an artist above reproach. A friend opines that any painter with the talent to show off should know well enough not to. It's good advice not heeded by Mr. Kanevsky. He doesn't stretch his talent; he coddles it. Mr. Kanevsky routinely mistakes facility for inspiration, flash for gutsiness and artsiness for intellect. The resulting paintings are abrasively middle-of-the-road.

"Academic" is an adjective that need not instantly apply to straightforward figurative paintings-thank you, Philip Pearlstein and Graham Nickson-but Mr. Kanevsky is more of an academic than he might want to admit. Good at hewing to anatomical particulars-navels are his specialty-Mr. Kanevsky is better at evoking discomfiting erotic intrigue. K.B. in Green Bathroom (2005), with its anonymous woman and claustrophobic air, is the least agreeable of the paintings and, not coincidentally, the best thing here.

Alex Kanevsky: New Paintings is at the J. Cacciola Gallery, 531 West 25th Street, until June 4.

Cave Dweller

Taking into account the not entirely cohesive juxtaposition of approaches typical of the paintings of Margot Spindelman, it's little wonder that she rarely embodies the "primeval past that still casts a shadow forward." Ms. Spindelman, whose landscape-based abstractions are on display at the Katharina Rich Perlow Gallery, is too busy stitching together loping, calligraphic gestures and taped-off passages of sky to make for a convincing 21st-century cavewoman. Her connection to the land-and, for that matter, to the art of painting-is defined by distance and will, not empathy and intuition.

Would that Ms. Spindelman's Cubist-inflected pastiches of Franz Kline, Llyfford Still and Jacob Ruisdael meandered less and locked into place more. A greater emphasis on color, tonality and consistency of touch might do the job. As it is, the pictures rely on drawing to hold them together; notwithstanding the variety of incident, the pictures, as painting, feel skimpy.

The canvases do pull at the eye and glint with promise. This is Ms. Spindelman's solo New York debut. With hard work and a little luck, her next one should be better. If that turns out to be the case, her third show will be the one to see.

Margot Spindelman is at the Katharina Rich Perlow Gallery, 41 East 57th Street, until June 1.

What MoMA Wants

The last time I checked the byline on this column, it wasn't credited to Chicken Little. Yet after reading the May 13 edition of The New York Times, I'm convinced the sky is falling.

Carol Vogel, writing in the Weekend section, reported that the Museum of Modern Art-you remember, that elephantine structure straddling 53rd and 54th streets between Fifth and Sixth avenues-had acquired the untitled installation by Robert Gober recently seen at Matthew Marks Gallery.

Why? Mr. Gober's sizable array of stuff isn't art by any stretch of the imagination. (I know, I know: That hasn't stopped MoMA before.) What it is, basically, is anti-Catholic, anti-Republican, anti-rationalist, anti-sex, anti-human-but pro-diaper!-propaganda.

Mr. Marks must be a whale of a salesman to convince anyone that Mr. Gober's masturbatory reliquary is worthy of posterity. Then again, commerce is king in today's art scene. Good for Mr. Marks, bad for the rest of us, but rest assured: The sky will ascend again. Time, that merciless arbiter of quality, will ultimately right the follies of contemporary culture. At some point-say, 2055-the curators at MoMA will ask just what is that damned Gober doing in the collection. Then the door to the storage locker will be shut without a second thought.

Ms. Tompkins' quilts are so winning in their irregularity, rigorous in their form and playful in their means that they elide the distinctions between art and craft; the appeal of the work is such that one forgets all about categories, however significant they may be. Besides, there's a lot to look at: vibrant colors, wobbly geometries and go-with-the-flow élan, all grounded by the artist's unobtrusive dignity, the sense of pride taken in a job well done. Always the sensualist-Ms. Tompkins' love for materials is as plain as the nose on your face-she can also be sexy: When she doubles up on plush fabrics, she's downright lascivious. Ms. Tompkins is better at dispersing rhythms than focusing on particulars, so don't be put off by the first two or three more stilted quilts. The rest of the show delights: The work gains in assurance, expansiveness and good tidings. It's easy to be pessimistic after a day spent gallery-going. Here's a reason to be happy.

Rosie Lee Tompkins: African-American Quiltmaker is at the Peter Blum Gallery, 99 Wooster Street, until Nov. 23.

Facile Appropriation

Standing in the Matthew Marks Gallery watching the videos of Sam Taylor-Wood, I couldn't get over the fact that I was standing in the Matthew Marks Gallery watching the videos of Sam Taylor-Wood. How does one look at these things? While some galleries offer benches (a courtesy not extended at Marks), there have been few videos worth sitting for. Many videos are, in fact, unsittable: Doug Aitken's current video installation at the 303 Gallery, for instance, purposefully denies the viewer a firm vantage point. Most videos don't aspire to the status of film, anyway. They want to be art-you know, like a painting. Unlike a painting-whose entirety is forever fixed, front and center-a video reveals itself on a schedule, not at the viewer's leisure, which entails clock-watching and foot-shuffling and promotes the inescapable sense that video art is something we tolerate in the name of progress.

Along with Bill Viola, Shirin NeshatandTony Oursler, Ms. Taylor-Woodisa prominent practitioner of video art. But she's not the best of the bunch. Whatever we may ultimately think of the art of Mr. Viola, Ms. Neshat or Mr. Oursler, they bring to their ventures a cinematic rationale; why video is their chosen art form isn't in doubt. All Ms. Taylor-Wood brings to her videos is a camera, a budget and a truckload of pretense. The centerpiece at Marks is an updated version of Michelangelo's Pietà , wherein Ms. Taylor-Wood casts herself as the Virgin and Robert Downey Jr. as Jesus. The piece is shameless; not only does it trivialize a sacred image, it confuses facile appropriation of a great work of art with the great work of art itself.

Lest you think Ms. Taylor-Wood only exploits monuments of the Western world, there are also "homages" to Japanese erotic prints-basically an excuse to take some dirty pictures of, as the press release reassures us, "a man and a woman in a long-term relationship." Elsewhere, she's "inspired" by Hans Holbein, encourages the growth of mold and takes photographs of cows. Age 35, Ms. Taylor-Wood is the toast of the international art scene; Rosie Lee Tompkins, who is more than 30 years her senior, has barely had her first New York show. If that doesn't count as a cultural inequity, I don't know what does.

Sam Taylor-Wood: The Passion is at the Matthew Marks Gallery, 523 West 24th Street, until Nov. 2.

Tense Harmony

John Mullen, whose recent canvases are the subject of an exhibition at the Howard Scott Gallery, pursues a diagrammatic brand of abstraction in which disparate pictorial systems collide against each other. Anyone who keeps an eye on contemporary painting will recognize this all-but-ubiquitous genre. It takes as its cue, at times perhaps unconsciously, the cut-and-paste verities of our computer age. Painters like Terry Winters, Lydia Dona and Jeff Elrod (among many others) either employ a P.C. in the crafting of their art or allude to the disembodied visual nature of its screen. It could be said that the goal of cyber-painters is to make virtual reality a little less virtual. A less benign soul might claim that they're poaching on the technological Zeitgeist in order to prove themselves relevant. Only time will tell whether these painters are staking new aesthetic ground or kissing an era's behind. As it is, the results have been mixed. Sometimes they're better than that-which is where Mr. Mullen comes in.

I don't know how much Mr. Mullen buys into the cyber-schtick, but his art is certainly inspired by today's technology. His pictorial motifs-brightly colored rows of squares, linear patterns, wandering scaffolds and built-up buttons of acrylic paint-propose a structural regularity, then call it into question. Put another way, Mr. Mullen is interested in order only to the extent that he can reconfigure it under radically different circumstances. (One picture, from 2002, is titled Beyond Specific Planning. ) Coercing his fractured patterns into sharing the same logistical space, Mr. Mullen creates a tense compositional harmony from a miscellany of incongruities. His method involves layering, glazing, stamping, scraping and calculated gestures-check out his stenciled AbEx blot. Though he's a slicker painter than one might like, with a pat routine, Mr. Mullen has a way of confounding his own proficiency. At their best, his paintings pull us into their intricacies. And when Mr. Mullen is on the mark, we're happy to let him off the hook.

John Mullen: Out of Site is at the Howard Scott Gallery, 529 West 20th Street, seventh floor, until Oct. 26.

The cow came home on Aug. 15, 1998, when Dr. John J. Ferry Jr. resigned as chief executive of Southampton Hospital amid reports that the 168-bed hospital was mired in red ink. By autumn, the news had turned bleaker than the coming Hamptons winter: An accounting firm brought in by the hospital's board of directors determined that Southampton Hospital, which has an annual operating budget of approximately $65 million, had lost a staggering $50 million over two years. And most recently, a source close to the situation said that the State Attorney General's office was investigating the mess at the hospital.

The revelation of the financial morass at the medical center has made the 47-year-old Dr. Ferry the focus of a lot of anger from year-round, working-class South Fork residents, as far east as Montauk, who rely on the hospital for health care and, in many cases, a paycheck. Yet, there is another, white-hot component to this fury. An anger based in the complicated social hierarchy of the Hamptons, where success is the only vaccine against the virulence of public life. And where those who falter, especially those who come in from the outside, suffer a fate similar to the way in which white blood cells deal with an infectious agent in the body.

In the four and a half years that he ran the hospital, the charismatic, bantamlike Dr. Ferry, along with his effervescent 41-year-old wife, Karen Fifer Ferry-both of them Wharton Business School graduates-tattooed themselves onto the Hamptons scene. What they lacked in net worth, they made up in social consciousness: a charming, articulate couple dedicated to the community they had made their home. Their six-day-a-week, half-dozen-events-a-night social schedule regularly landed them in the social pages of the local press. (An amateur cook, Dr. Ferry even submitted his recipe for "Grilled Chicken with Moroccan Spices" to Newsday in 1995.) Dr. Ferry, looking crisp and slightly academic with his neatly parted brown hair and oversize tortoise-shell glasses, could also be seen and heard on local television and radio stations. Tanned, dimpled and brunette Mrs. Ferry, meanwhile, joined a number of local boards, including the Hamptons Film Festival, and ran for a school board seat. (She lost.) With their winning personalities and "big, big smiles," as one acquaintance put it, the Ferrys made a lot of acquaintances, and their defenders claim that their high profile was instrumental in raising awareness and money for the hospital.

"The hospital finally had a face and a personality," said one year-round Hamptons resident. "That was immensely comforting."

Seemingly always in motion, Dr. Ferry in his Ford Expedition, and his wife in her Volvo convertible (one resident remembers Mrs. Ferry having calculated the time it took to drive from village to village, so that she could better schedule her day), the couple moved around town under a benevolent gaze. When the hospital's financial straits became apparent, however, the Ferrys' cheery tones were suddenly perceived in a different light.

"John Ferry was without a doubt a charming man. Indeed, he was. But now we feel that we were duped by him," said Ann LaWall, the president of the Southampton Business Alliance, an organization of local business people whose meetings were attended by Dr. Ferry. "Basically, most people in the town lay the blame for this $50 million deficit at his feet," said Ms. LaWall. "When you're C.E.O., there's usually a sign on your desk that says the buck stops here."

Dr. Ferry declined several requests to be interviewed, but did respond briefly to some questions. He referred The Observer to the resignation letter he submitted to R. Peter Sullivan III, the chairman of the hospital's board of directors, on Aug. 15.

"Although throughout my career I have never chosen to step aside in the face of a challenge, I believe that the Hospital's Board of Directors would be better served at this time by someone else leading the organization," Dr. Ferry wrote. "I have the utmost respect for and trust in [incoming hospital chief executive] Tom Doolan as an effective agent during the coming transition."

Dr. Ferry added: "The revelations of the past six months as they have unfolded have provided a clearer picture of problems which far exceed those that the Hospital's C.F.O., Executive Vice President, I myself, the other members of the Board Executive Committee or the Hospital's previous external auditors were aware of."

In the weeks following Dr. Ferry's resignation (he received a severance payment of $140,000 and $116,667 in deferred compensation), the hospital's officials tended to avoid placing blame. But as the losses and questions from the hospital's employees and the public grew-some wondered why the hospital's board didn't detect that something was amiss-more angry fingers were pointed at Dr. Ferry.

In a phone interview with The Observer , John J. Mullen, director of community relations and development for Southampton Hospital, said, "John Ferry tried to turn a country hospital into a Fortune 500 company with all the perks and ego that goes with it."

But there are those, such as one prominent businessman affiliated with hospital, who contend that Dr. Ferry has been made "a scapegoat," largely for problems caused by dramatic changes in the way hospitals are paid by insurance companies. Those changes took effect at the beginning of 1997, when hospitals were required to negotiate individually with insurance companies as to how much they would be reimbursed for their services, negotiations that usually resulted in the insurance companies paying discounted rates. Prior to that, the state dictated how much the hospitals would be reimbursed. The problem was magnified by Southampton Hospital's new computer system, which was not accurately accounting for those discounts. "When you start squeezing the revenues of a hospital the way the state and third-party [insurance] payers have done it, these things are inevitable," said the businessman, who requested anonymity. He added, of Dr. Ferry, "Did he try? Yes. Did he fail? Yes. But I always prefer guys who try and fail than guys who sit and wring their hands."

Black Satin Boxers

By 1996, after he'd been on the job in Southampton for two years, Dr. Ferry was being touted as the administrator who had come from New York Hospital in Manhattan to turn the sleepy country medical center where Jacqueline Bouvier was born into a modern, modestly profitable facility. "He was trying to lure doctors here, which had been difficult because this is such a small, seasonal place," said one resident. "Suddenly, it felt like someone had taken over who understood modern medicine."

Dr. Ferry, a pediatrician by training, had come to Southampton Hospital via New York Downtown Hospital, where he had served as senior vice president for medical affairs and medical education. Prior to that, in the early 1980's, he was assistant to the chairman of the pediatrics department at Cornell Medical School (now the Weill Cornell Medical School). Dr. Maria New, chairman of that department, said she recruited Dr. Ferry and that she remembers him as a "very smart, very personable guy" with "high ambitions." "When I hired him," she said, "I asked him, what do you want to be in 10 years? I remember his answer. He said I want to be Secretary of Health." (Dr. Ferry told The Observer he does not recall making that statement and that he's never aspired to that position.)

During his run as chief executive of Southampton Hospital, Dr. Ferry opened a breast health center within the hospital, added valet parking, a concierge and a number of swank satellite centers (part of an expansion plan that had been put into effect before Dr. Ferry came to the hospital) in East Hampton, Hampton Bays and other locales. Those outlets offered everything from AIDS treatment to sports-injury therapy to Reiki therapy. His direct office number was as coveted as the private reservation line to Balthazar. After tripping on a bike rack in Sag Harbor and gashing his head, literary agent Mort Janklow had Dr. Ferry paged and asked him to alert a plastic surgeon. And some of the powerful contacts Dr. Ferry made seemed to pay off for the hospital. In 1997, Howard Gittis, vice chairman of Ronald Perelman's MacAndrews & Forbes Holdings Inc. and his wife Lynette Gittis hosted the hospital's annual benefit at their 22-acre estate. Mr. Perelman played the drums and the party raised $1.5 million, about $700,000 more than the previous year.

In May 1997, however, when The New York Times quoted Dr. Ferry saying about the hospital, "We grew out of our deficit," a source familiar with the hospital said that there were already rumblings of financial trouble.

Dr. Ferry's public face gave little indication that there was anything to worry about. In 1997, he modeled black satin boxer shorts in a lingerie fashion show that benefited a local charity, the South Fork Breast Health Coalition. (He managed to attach his trademark suspenders to the shorts.) That same year, he cavorted in green tights as Peter Pan on the hospital's "Never-Never Land" float in a local St. Patrick's Day parade. (In other years, he portrayed the Wizard of Oz and Snoopy.)

Some Hamptons residents were also talking about Mrs. Ferry, although for a different reason: She was becoming rather close with a local real estate broker, Paul Brennan, who was also married. Mr. Brennan had no comment, except to say that he knew Mr. and Mrs. Ferry "very well" and that it was "too bad" what had happened regarding the hospital. Mr. Brennan's wife, the television journalist Connie Collins, from whom he is currently separated, would only tell The Observer that Mr. Brennan and Mrs. Ferry "played tennis an awful lot." Mrs. Ferry did not return calls seeking comment.

As the Hamptons grew accustomed to Dr. Ferry's face, others began to look more closely at the growth that had occurred on his watch. For instance, while the satellite centers were devoted to worthy causes such as physical rehabilitation, AIDS treatment, and support groups for people with cancer, diabetes and other illnesses, critics contend that some of the elements of their design seemed extravagant for a nonprofit hospital. According to Mr. Mullen, Dr. Ferry hired the design company that outfitted a yet-to-open dialysis center in Hampton Bays with cathedral ceilings with wood beams and a bank of postmodern windows. Mr. Mullen said that the plans also called for each dialysis station to be outfitted with a cable-equipped television, a phone and a computer modem hookup. "The opulence of it was ridiculous for a country hospital," he said, "but it was in line with [Dr. Ferry's] vision of making the well-to-do feel comfortable with the hospital's health care facilities."

Barbara Feldman, whose architectural and interior design firm, Avatar East, designed the dialysis center, said, "My directive was to make this as high-end a facility as possible, to attract the tourist trade. That came right from the top." Ms. Feldman said that "every single thing" was approved by "either Dr. Ferry or his second-in-command, Richard Fenton." Ms. Feldman, whose firm specializes in health care facilities, said that Dr. Ferry "was very good at spending money, but I don't think his vision was inappropriate. His mission statement was not out of sync with most health care facilities today. There isn't a hospital around that isn't pumping huge dollars into their facilities to make them look great and function well and be competitive.… If you had a choice of going to dialysis in a two-by-four room with nothing on the walls painted white or going to a beautiful facility, where would you go?"

There was also the case of a community health and wellness center in East Hampton, located in a leased space on tony Main Street, where real estate rates reach Madison Avenue heights. While defenders argue that the site was a temporary one and was designed to attract East Hamptonites' attention to the hospital, Mr. Mullen said: "It was a symbol of the extravagance and reckless spending. A wellness center hardly needs to occupy the most valuable real estate in the Hamptons."

Ms. LaWall recalled another minor but telling incident. She said that every year the Southampton Business Alliance holds a golf outing, and the alliance sells advertising space, for $300 a pop, in the form of giant tee signs. One year, Ms. LaWall remembered, Dr. Ferry called her up and ordered two signs, but added he was going to have them printed up himself. "Three weeks later, I get a huge crate," Ms. LaWall said. "I think someone's sending me a Picasso. I open it up. There, in three colors, were the signs bearing the Southampton Hospital log. They were the most gorgeous things I've ever seen. It made everybody else's tee sign look like garbage. Now he would say he's promoting the image of the hospital, and indeed he was. But one would think that with signs like that, the hospital was in the pink, not in the red." (Dr. Ferry said he did not recall any such incident.)

Next Stop, Rhode Island?

What was behind the image? Shortly before Dr. Ferry left the hospital, the board hired the accounting firm of KPMG Peat Marwick to scrutinize the hospital's books. In a January 1999 "Report to the Community," Mr. Sullivan, the board chairman, said the firm had determined that "about $30 million of the total losses resulted from accounting errors." This problem was exacerbated by the installation of two new computer systems that resulted in "major operation problems," according to the report. "Accounts receivable, what the Hospital thought it was owed, were significantly overstated," the report said, "because discounts on rates to HMOs were improperly recorded. Collection and financing fees to outside companies which had been hired to do the hospital's billing also were underestimated. Reserves for uncollectible old billings were deemed insufficient. Finally, the new audit transferred almost $7 million of what had been recorded as capital assets into operating expenses incurred prior to 1997."

Mr. Mullen told The Observer that the board has formed a committee to weigh the option of suing Deloitte & Touche, the accounting firm that handled the books when Dr. Ferry held the reins. Ellen Ringle, a spokesman for Deloitte, issued this statement: "Deloitte & Touche's last audit of Southampton Hospital's financial statements was for the year ended Dec. 31, 1996. Deloitte & Touche performed its services for Southampton Hospital in accordance with all applicable professional standards."

Meanwhile, James J. Needham, a year-round Southampton resident who was formerly chairman of the New York Stock Exchange and a commissioner of the Securities and Exchange Commission, has been leading the call for the State Attorney General to investigate. Mr. Needham said he got "all sort of inklings" that something might be amiss back in 1996, when he asked for a copy of the hospital's 1995 audit and couldn't get one. The same thing happened, he said, when he asked for a copy of the 1996 audit in 1997. "These are a lot of sophisticated board people," said Mr. Needham. "I really feel that the board of directors just didn't do what it was supposed to do." Mr. Needham said he contacted the office of then-Attorney General Dennis Vacco. (Scott Brown, a spokesman of the Attorney General's office, would not confirm or deny that an investigation had been opened, but said, "We are well aware of the situation at Southampton Hospital.")

Mr. Mullen alleged, however, that the hospital board "trusted John Ferry. When he came out here with his winning smile, his articulateness, his vision and his tremendous energy, they trusted him. And he backed it up by providing them with certified audits from Deloitte & Touche. He abused their trust. This is why the board is where it's at today."

Mr. Needham, however, said he finds it particularly difficult to exonerate the board given a letter to the editor that appeared in the July 23 Southampton Press . Signed by both Dr. Ferry and Mr. Sullivan, the letter noted, "The hospital's board has been consistently informed of the hospital's financial difficulties at its bimonthly meetings and members are provided the hospital's audited financial statements each year as soon as they are available." The letter also stated, "The board has been supportive of all the actions taken over the past nine months to re-establish financial equilibrium."

Since his resignation, Dr. Ferry and his wife have kept a relatively low profile, but for a time their continued presence in the Lewis Street house, which is owned by the hospital and has a view of its emergency room, served as a reminder of what had happened. At a public forum in January, one emergency room nurse got up and asked, "How much longer do we have to watch Dr. Ferry playing with his kids and dogs on the lawn of his house while we're short-staffed and all working like crazy?"

On Feb. 22, Dr. Ferry was hand-delivered a letter saying that if he did not vacate the premises immediately, the hospital would begin to charge him $150 a day for use of the home. The following weekend, moving trucks were parked out front. Although the town is buzzing that Dr. Ferry has found a job with a health maintenance organization in Rhode Island called Harvard Pilgrim Healthcare, his family has moved to another house in the Hamptons. And some in town are wondering whether he'll remain until the cow comes home.