Washington Township Health Care District Official Under Investigation

A state political watchdog is investigating Washington Township Health Care District board member Michael Wallace to see if he violated conflict-of-interest laws, according to media reports.

The taxpayer-funded official is also a board member of Fremont Bank, where the health care district banks. Fremont Bank has received more than $1 million in fees from Washington Township, The Bay Citizen reports.

Wallace is now being investigated by the California Fair Political Practices Commission, which the agency announced publicly last week.

The local district, which operates in Fremont and serves Fremont, Newark, Union City and Sunol along with a southern portion of Hayward, is among more than 20 health care districts in California that have given millions of dollars in transactions to companies with ties to top district officials, according to a July report.

Board members of the Sequoia Healthcare District in Redwood City are also among those being probed.

According to The Bay Citizen, California is home to more than 70 health care districts that manage multi-million dollar budgets with little oversight. These districts often operate hospitals, manage properties and distribute grants.

Wallace came under the political watchdog’s radar because he has served on the Washington Township board since 1990. Since 2001, the district has paid more than $1.2 million in fees to Fremont Bank, where Wallace held various positions and is now the current board chairman.

Wallace held more than $1 million in stock of Fremont Bank’s parent company and had a salary of more than $100,000, The Bay Citizen reports.

Wallace told the nonprofit news organization that he did not participate in the board’s selection of Fremont Bank in 2001.

State conflict-of-interest laws, however, prohibit publicly funded agencies from entering into contracts that could benefit any of its members.

According to the Bay Citizen, the California Fair Political Practices Commission also looked into Washington Township Health Care System CEO Nancy Farber but decided not to continue with its investigation.

The Washington Township board approved two grants totaling $350,000 to the George Mark Children’s Home where Farber’s husband volunteered as an unpaid board member. Farber is not a board member and could not participate in the voting of the grants but was involved in a discussion about one of the two grants, according to The Bay Citizen.  

After the grants were awarded, Farber’s husband, Peter Farber-Szekrenyi, went on to become a paid consultant for the children’s home where he earned $12,800 a month and, later, its CEO, making more than $200,000 annually, according to The Bay Citizen.

Because Farber-Szekrenyi was a volunteer and not paid by the children’s home when the grants were approved, the state fair practices commission decided there was no conflict-of-interest.

Read the full Bay Citizen report here.

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