When charity calls, Washington Hospital CEO Nancy Farber has opened her checkbook, contributing to the hospital's own health care foundation, donating to service clubs and college funds, and helping to fund services for chemotherapy patients and a new brain and spine imaging system.
Then Farber, one of the highest paid public officials in the state with more than $1 million in annual compensation, submitted many of her charitable expenses to her public hospital district for reimbursement, to the tune of more than $20,000 over the last three years.
A district spokesman, noting that the reimbursements are allowed under Farber's contract, at first dismissed questions from this newspaper about the hospital's practices as "trite." But last week, the district shifted its stance, saying that Farber is refunding the hospital for some of those donations.
"She realizes even though she is contractually entitled to these funds, that it can be misunderstood and misconstrued," hospital spokesman Christopher Brown wrote in an email. "She believes in (the) importance of these philanthropic efforts and wants to encourage others to contribute as well in the future."
Farber declined to be interviewed, but in an email statement Thursday reiterated Brown's statements.
While an executive's business expenses are commonly reimbursed by public and private agencies alike, reimbursing charitable donations is outside the norm, government ethics experts say.
"Things like this cause the public to become cynical," said Judy Nadler, senior fellow in government ethics at Santa Clara University's Markkula Center for Applied Ethics. Noting that the hospital was in essence funneling money through Farber to its own foundation, she said, "That is not a very forthright way to get donations for the organization."
A Fremont resident and former Washington Hospital patient agreed.
"It is all a publicity stunt, because essentially the hospital gets zero if they reimburse her," Jim Weil said. "Given her salary, she is in a position to make such donations without reimbursement."
Farber has sought and obtained reimbursement from the hospital for at least $11,000 in donations to the Washington Hospital Healthcare Foundation in the last three years, in some instances writing a personal check to pay for a specific hospital need only to have the hospital pay her back a couple days later.
Expense records obtained through the California Public Records Act show the hospital repaid Farber $3,000 in 2012 for sponsoring the foundation's annual golf tournament, and hospital officials said she will be reimbursed another $3,000 for the June 25, 2013, tournament. She was also reimbursed for sponsoring a table at the foundation's 2011 and 2012 Top Hat fundraiser gala at a cost of $3,000 each year. She will be reimbursed another $3,000 for this year's gala.
At each of those galas, Farber also contributed to a foundation campaign known as "Fund a Need," which identified a specific hospital need to support each year.
In 2010, the first year of Fund a Need, she donated $1,000 toward the construction of the Biplane Cath Lab, officials said. In 2011, she donated $1,000 toward a new outpatient infusion center for chemotherapy patients. In 2012, she donated $5,000 toward a new brain and spine imaging system, and in 2013 she gave another $5,000 to pay for mammograms for uninsured women, records show.
Reimbursements received for all Fund a Need gifts will now be refunded by Farber, and her 2013 gift for the mammograms will not be submitted for reimbursement, officials said Tuesday.
Brown said the total reimbursed to Farber was not readily available, but he believed she had been reimbursed for sponsoring the foundation's golf tournament and Top Hat gala annually since 1994. If so, that likely means tens of thousands of dollars in additional reimbursements.
This newspaper first inquired about Farber's reimbursements in late November, and until last week the CEO, through the hospital spokesman, stood by them. So too did Dr. William Nicholson, an executive officer for the hospital foundation and a publicly elected director for the Washington Township Health Care District. Both Brown and Nicholson said her donations spur others to donate.
"To create the momentum is important. ... There is a certain amount of money at a charitable event which encourages people to give," Nicholson said in an interview Dec. 4. "The whole idea is to raise the funds, if by jump-starting or bootstrapping the giving, that's a healthy thing."
In an email Dec. 4, Brown said that Farber's unreimbursed personal donations far exceed those the hospital has paid for.
Farber also has been repaid for $3,040 in gifts to other community groups since June 2011, including the Ohlone College Foundation and the Niles Rotary Club, where either she or a subordinate have been members and have held leadership roles. Records show she gave another $2,500 to community groups using the district credit card.
Farber has been listed as a sponsor of many fundraisers and galas in websites and promotions, even though the hospital is actually footing the bill.
Brown said the reimbursed donations "are not written off on her personal income tax returns."
Nevertheless, many outside observers questioned the arrangement.
"This is a highly unusual arrangement," said Andrew Watt, president and CEO of the 30,000-member Association of Fundraising Professionals. "Those gifts that an individual makes should come out of their own pocket."
Michael Martello, retired city attorney for Mountain View and volunteer for the Sacramento-based nonprofit Institute for Local Government, said, "There is no transparency here."
"The best practice is always that when the board is handing out public dollars, they should do it publicly," Martello said. The fact that the public district only receives tax dollars from voter-approved facility bond measures doesn't change that, he said.
Hospital board president Nicholson said the board does not review Farber's expenses or set a dollar limit on them, and it doesn't need to. Board members, he said, have "the expectation that the CEO would act appropriately in all matters. ... I think the community trusts the hospital."
Ashly McGlone covers the Washington Township Health Care District. Contact her at 510-926-6397. Follow her at Twitter.com/AshlyReports.