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Tahoe Forest Hospital CEO’s ‘Statement of Economic Interest’ Forms Raise New Legal and Ethical Questions

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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.”

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.

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Reader comments so far...

North Shore
Tahoe Forest Hospital is a house on fire with the Grifters Bob and Marsha having started the inferno. Most people having common sense would flee the building. Apparently Ms. Thomason of Marketing and Communications enjoys fanning the flames of this inferno with her questionable defense of the Grifters Bob and Marsha. I have to wonder where Ms. Thomason's next job will be. She will probably end up as unemployable as the Grifters.

He took the job years ago and stated he couldnt afford a house in truckee like the one he use to live in with pool tennis court, etc. So I believe the hospital gave him some bank so he could live in the manner he had become accustomed to!

North Shore
After rereading David Bunkers excellent 2012 article regarding the Grifters Bob and Marsha, I have to take issue with comments by "Tahoe Forest spokespersons" claiming that Marsha Schapper worked for CFO Crystal (short skirts) Betts. I was there, and I'm afraid the opposite was true. It was Crystal Betts who worked for Marsha Schapper. Bob may have been the King, but Marsha was the power behind the throne. I saw more than one Management Individual "move off the mountain" before their time, after disagreeing with Marsha Schapper. Having said that and fast forwarding to the present, the Moonshine might want to inquire as to how many Medical Records Directors went through the revolving doors of Marsha's and Crystal's watch at Tahoe Forest. The Medical Directors Staff to a certain extent determines the validity of the Multispecialty Clinics Physicians billing amounts to be forwarded to the billing department, which then submits the bill for payment to the various payers such as Insurance Companies, Medicare and Medicaid, ect... A Medical Records Director who was not on the same page as the Head of the Multispecialty Clinics (Marsha Schapper) did not have a very long shelf life at Tahoe Forest. The Medical Records Directors financial budget is under the control of the CFO (Crystal Betts), who regardless of the organizational chart, worked for Marsha Schapper. Can you spell "Conflict of Interest". Keep digging David.

TruckeeCS | Truckee
I light of the fact that Mr. Schapper & the Board seem to be in agreement that there is no conflict of interest than it should be fairly easy to back up their facts. Basically - just walk the public through the actual hiring process. Was there an RFP or job posting for this position? If not then, how did Ms. Schapper come to apply for the position? What other candidates/firms were considered? How did Ms. Schapper's experience and contract fees stack up against the other firms or candidates? Was the contract awarded to the lowest bidder or was greater weight placed on Ms. Schapper's experience? Over the course of her being contracted with the hospital, did the board ever seek new contract proposals for this position? If the Board can answer these with some documentation (which I would think they would have) then I'll be happy with their answers so far. If they cannot, then in my opinion it either shows conflict of interest or a Board of Directors in which the public cannot trust to do their job properly. I'm not sure which is worse.

truckee rn | Truckee
It was made clear to me when I was an RN at TFH that from the time Bob Schapper was hired that we were to shut up and obey. We were told to "either get on the bus or off" when it came to lip-servicing Bob. I know of an employee who was escorted off the property in 2005 for asking questions about Bob and his minions. (A wrongful termination was filed, but subject to a gag order of course, so no one ever found out what happened.) In 2005 I chose to get off the bus. I could not work for a charlatan. It has been quoted that we can afford to lose money but we can’t afford to lose reputation – even a shred of reputation... "We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter." Thank You to David and Moonshine Ink for bringing these unfortunate issues to the surface. TFH nurses and doctors are the best and continue to provide excellent care - in spite of Bob Schapper, not because of. We must continue this discussion and attend the board meetings to get to the bottom of this.

Anderson | United States
My question is how can the district get a non-biased legal opinion if the wife of one of the legal partners in the firm who is the district's counsel, is on the payroll at TFH? With over 6 figures?

Mouse | truckee
It might also be time to start looking at the Tahoe Forest "Foundation" Something appears to smell bad there too. So sad....

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July 12, 2018