Tahoe hospital district to pay up to $57,000 in CEO’s legal fees (updated) | SierraSun.com

Tahoe hospital district to pay up to $57,000 in CEO’s legal fees (updated)

Margaret Moran
mmoran@sierrasun.com
Tahoe Forest hospital board director Dale Chamblin, seen here at a previous meeting, said hospital CEO Bob Schapper and his wife, Marsha, "have been wronged by recent events."
Margaret Moran / Sierra Sun |

TRUCKEE, Calif. — The Tahoe Forest Hospital District will cover a portion of CEO Bob Schapper’s attorney fees related to the board’s internal conflict of interest investigation earlier this year.

In a 4-1 vote on Nov. 18, the TFHD board of directors approved reimbursing up to $57,000 of Schapper’s personal attorney fees and expenses through Aug. 21, according to the district.

“I fully appreciate my fiduciary responsibility to the community to protect the assets of this public hospital; however, I also have a moral compass that tells me that Bob and Marsha Schapper have been wronged by recent events,” according to a statement board member Dale Chamblin read at the special board meeting. “Despite the fact that they followed all the rules, followed the advice of the board and legal counsel, they were forced to hire their own legal counsel to protect their personal interests.”

Chamblin and directors Karen Sessler, Roger Kahn and Larry Long voted in favor, while board president John Mohun voted against.

When asked Friday why he voted against, Mohun said: “Because we didn’t have a legal obligation to pay Mr. Schapper’s legal fees.”

Schapper read a statement at the meeting, calling the conflict of interest allegations a “witch hunt” that was “politically motivated.”

“Given the facts and the growing observation that this proceeding was politically motivated, clearly biased and that these intentionally orchestrated personal attacks were becoming nothing short of a witch hunt, I had very little choice but to engage separate counsel …” he said.

A request to district staff for further comment from Schapper was not granted. Instead, the three-page statement Schapper read at the meeting was provided.

‘WITHOUT MALICE’

The reimbursement requested was for $70,744.49 in legal fees from May 27 to Nov. 13, said Ted Owens, director of community development for TFHD.

Based on board packet documents, that’s the same amount charged to Schapper by Daniel Croley, a partner of San Francisco-based firm Futterman Dupree Dodd Croley Maier LLP, for services up to Nov. 13.

However, a Sept. 10 letter with fee chart for Croley; Katherine O’Neal, with the same firm; and Randy Riddle, a partner with San Francisco-based Renne Sloan Holtzman Sakai LLP — all of whom worked for Schapper — stated that $53,179.50 in legal fees were due for services provided through Aug. 21.

When other related expenses such as technical support and time spent reviewing billing records are included, the total comes to $55,687.72, not including Riddle’s costs.

Reimbursement funds will come out of the district’s operating fund, Chamblin said.

“This … is based upon the findings that this decision is in the best interests of the district, and the CEO’s actions were within the scope of his employment and taken in good faith and without malice,” according to the board motion.

‘FAITHFULLY FOLLOWED DISTRICT POLICY’

In July, media reports raised questions of a potential conflict of interest with Shapper and his wife, Marsha’s, involvement with the hospital district.

After a multi-month internal investigation, the board voted 4-1 on Aug. 21 to take no further action, based on “insufficient evidence” that Schapper violated California’s conflict of interest code 1090.

The district has paid approximately $84,000 for Greg Moser, a partner with San Diego-based law firm Procopio, Cory, Hargreaves & Savitch LLP, who conducted the probe, said district counsel Steven Gross.

The investigation’s findings were supported by Riddle, whose focus is ethics laws, including conflict of interest matters. Schapper’s attorney hired Riddle in July.

To this date, the board and legal counsel Gross have declined requests to release the investigation’s report to the public, as it’s reportedly been deemed a personnel matter.

“All of that effort and expense to discredit my integrity couldn’t identify one shred of evidence to confirm these allegations,” according to Schapper’s statement. “To the contrary, the investigation confirmed that I have faithfully followed district policy as well as ethical rules in all instances with regard to Ms. Schapper’s employment, which was managed by the COO and CFO.”

The hospital board reportedly began conducting the internal investigation in May.