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Political watchdog looks into health care board members
August 24, 2012, 05:00 AM By Michelle Durand Daily Journal Staff

The state’s political watchdog agency is looking at two members of the Sequoia Healthcare District for potential conflicts of interests over decisions that may have proven financially beneficial to themselves.

The Fair Political Practices Commission confirmed it launched investigations concerning Vice President Dr. Gerald Shefren and Director Art Faro of the Sequoia Healthcare District. The agency was asked to look at allegations that Shefren voted to approve a district grant for a nonprofit that employed his wife and Faro held stock in two banks with ties to the district.

A FPPC representative declined further details, citing the ongoing investigation.

In an email to the Daily Journal, Faro said the district CEO brought forward a resolution to establish a relationship with United American Bank, paying fees of approximately $5,000 annually. As of February 2009, Faro said he owned approximately $9,750 worth of stock in the company which had assets of more than $343 million.

"Based on the small amount of the banking fees, the asset base of UAB and my limited stock ownership, it did not seem foreseeable that a decision regarding the district’s banking relationship could have a material effect on my investment,” Faro wrote.

Regardless, Faro wrote, he abstained from that vote and on a matter involving Wells Fargo.

Shefren admits making an error but said it was unintentional and one that did not benefit him.

Shefren said in 2010, as part of the grants committee, he abstained from voting on a roughly $60,000 home care award for Pathways where his wife works one day each week as a hospice supervisor. Months later, when the grant and several others came to the full board bundled together for approval, Shefren said he "just forgot” and voted. He later asked the board to reconsider and recused himself before that vote which also approved the grant.

"It was clearly an error but an unintentional error and did not as best I can determine benefit me in any way,” Shefren said. "Had I done what I should have done and ask he board to separate it out, the outcome would have been the same.”

If either or both Shefren and Faro are found to have been in conflict, the FPPC can issue them warning letters or fines up to $5,000 per violation.

The state’s health care districts, including the two in San Mateo County, have come under increased scrutiny for collecting taxes without much oversight — and in many cases no longer operate hospitals. The Sequoia Healthcare District allocates grants for community health and indigent care.

Michelle Durand can be reached by email: or by phone: (650) 344-5200 ext. 102.

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