In the latest of several probes, the California Fair Political Practices Commission has launched an investigation of health care district official Michael Wallace to determine if he violated state conflict-of-interest laws, the Bay Citizen reports (Mieskowski, Bay Citizen, 9/12).
A financial review of state health care districts conducted in July by the Bay Citizen and California Watch identified millions of dollars in questionable transactions involving firms with connections to district leaders.
The districts -- which manage hospitals and nursing homes -- oversee more than $4 billion annually in public and private funds from taxpayers, hospital revenues and various investments.
Following the financial review, the Fair Political Practices Commission launched investigations of:
- Frank Burgess, a former board member of the San Gorgonio Memorial Healthcare District in Riverside County;
- Arthur Faro, a board member of the Sequoia Healthcare District in Redwood City; and
- Gerald Shefren, a board member of the Sequoia Healthcare District (California Healthline, 8/22).
Details of New Investigation
Recently, the commission began investigating Wallace, president of the Washington Township Health Care District board and chair of the board of Fremont Bank.
According to the Bay Citizen, the bank has received more than $1.2 million in fees from the district over the last decade.
In July, Wallace issued a statement to the Bay Citizen, saying, "I did not participate in the district's selection of Fremont Bank in 2001 and abstained from the board's vote" (Bay Citizen, 9/12).
However, state conflict-of-interest laws prohibit public boards and commissions from entering into deals that could benefit a member financially, even if that member abstains from participating in the decision (California Healthline, 8/22).
Wallace did not comment on the new investigation (Bay Citizen, 9/12).
Penalties for violating conflict-of-interest laws can include fines, voided decisions and felony prosecution (California Healthline, 8/22).