Tahoe Forest Hospital CEO Bob Schapper, who is already under investigation by the Tahoe Forest Hospital Board of Directors for possible conflicts of interest, may now have new legal and ethical problems stemming from his failure to disclose economic interests on state-mandated filings with the California Fair Political Practices Commission.

A Moonshine Ink review of Schapper’s statements of economic interests between 2005 and 2013 shows that Schapper did not adequately disclose his wife’s income from Medical Practice Solutions, a company that contracted with Tahoe Forest Hospital for nearly $1 million between 2003 and 2010. Failure to disclose economic interests in state-mandated filings is a serious offense. The California Fair Political Practices Commission can fine an offender up to $5,000 per violation, but the more serious consequence is the possibility of a perjury prosecution. Statements of economic interests are signed under penalty of perjury, which is a felony offense in California.

According to the California Fair Political Practices Commission, statements of economic interests are “an important means for the official that files them, the media, and the public to help gauge where potential conflicts of interest may exist.”

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The Tahoe Forest Hospital District uses its conflict of interest code to determine which employees have to report economic interests, and what financial information they have to disclose. The CEO position is the highest of the four categories listed in the code and requires that the disclosure of “all investments, business positions, and sources of income, including loans, gifts, and travel payments. All interests in real property, located in whole or in part within the boundaries of the District or within two miles of the District.”

Under California Fair Political Practices Commission guidelines, spousal income is reported at 50 percent of its value because the income is community property.

Moonshine Ink reviewed nine forms filed by Bob Schapper covering the years between 2005 and 2013. During that period of time, Schapper’s wife Marsha was either contracted with Tahoe Forest Hospital or employed by the public hospital district. Schapper only claimed his wife’s income on three forms — in 2008, 2009, and 2010.

On forms between 2005 and 2007, Schapper claimed he had “no reportable interests on any schedule.” During this time Marsha Schapper was contracted with Tahoe Forest Hospital to run the operations of the hospital’s outpatient clinics. In fiscal year 2004, Medical Practice Solutions received more than $56,000 from Tahoe Forest Hospital and by fiscal year 2010, that figure had more than tripled to more than $179,000. Bob Schapper was also listed as Medical Practice Solutions Chief Financial Officer in 2003 and 2013 filings with the California Secretary of State, and claimed joint ownership of the company in a 2000 bankruptcy filing.

The hospital district said that Bob Schapper had no involvement with his wife’s company and Schapper attempted to fill out his statement of economic interest forms correctly.

“Bob is not involved in what [Medical Practice Solutions] does as we have said, and any omissions would not have been conscious or intentional,” said Paige Nebeker Thomason, director of marketing and communications for Tahoe Forest Hospital, in an email to Moonshine Ink.

Nebeker Thomason said that any mention of Bob Schapper in connection with Medical Practice Solutions did not represent any real involvement with the company.

“Bob Schapper was a participant in name only in Medical Practice Solutions. Bob is not an active participant in the corporation and has not been. When Marsha filed the corporate documents, she wanted Bob to be listed in the corporate documents, which is not at all unusual. The accounting and tax terminology for this is called ‘substance over form,’ meaning that on paper he is listed in the corporate documents, but factually, he had no involvement,” said Nebeker Thomason.

After not claiming Marsha Schapper’s income from Medical Practice Solutions for three straight years, Bob Schapper disclosed his wife’s income from the company in 2008, 2009, and 2010. From 2010 to 2013, Schapper once again claimed “no reportable interests.” During that time period, Marsha Schapper had been hired as an employee at Tahoe Forest Hospital. Income from governmental organizations is non-reportable on statements of economic interest, so Marsha Schapper’s income from Tahoe Forest Hospital was not required to be disclosed on the forms.

Schapper’s potential violations of statement of economic interest disclosure requirements add to mounting legal questions the public hospital CEO is now facing. The Tahoe Forest Hospital Board of Directors have met in closed sessions multiple times for hours at a time to discuss Schapper’s possible conflicts of interest.

Schapper’s ties to Medical Practice Solutions have raised serious concerns over whether he violated California Government Code 1090, a strict state law that outlaws involvement in public contracts in which a public official can benefit financially. Violations of Code 1090 can be punished as a felony and may void the contract that was created under the conflict, possibly requiring the amount of the contract to be repaid. Marsha Schapper’s employment at Tahoe Forest Hospital, where she reported to a subordinate of Bob Schapper, is also an area of legal concern.

Code 1090 governs contract negotiations, and the state lays out a broad definition of contract involvement.

“An official participates in the making of a contract if the official is involved with its preparation at any stage in the process. The contract-making process begins at the time the idea for the contract is conceived and continues through the actual execution of the contract. That means that planning, determining the scope of the contract, drafting plans and specifications, setting contract terms, evaluating applicants, and negotiating are all included,” the California Attorney General’s website says.

Moonshine Ink first raised concerns about Bob Schapper and Marsha Schapper’s concurrent employment at Tahoe Forest Hospital in an article published in July 2012. Marsha Schapper continued to be employed at Tahoe Forest Hospital until May 2014, when she was terminated in a “consolidation of management” of the hospital clinics, according to Tahoe Forest Hospital. Moonshine Ink’s investigation into Bob Schapper’s ties to Medical Practice Solutions was published on July 11, 2014.

Schapper remains CEO of Tahoe Forest Hospital and, according to the most recent filings with the California Secretary of State’s office, is also currently the Chief Financial Officer of Medical Practice Solutions.

Author

  • David Bunker

    David Bunker almost dropped out of journalism school to hunt non-native rats on an uninhabited Pacific island. Instead, he graduated college and launched into a career of dump truck driving and ditch digging before taking up writing as a profession. He’s written for newspapers and magazines across the West and won numerous first place awards in the California and Nevada press associations.

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