Amy McColley resigned her position as chair of the Mendocino Coast Health Care District (MCHCD) Board of Directors near the end of a meeting held on March 31st. McColley cited her full time job in the healthcare field, the lack of support staff the district board suffers from, the number of hours required to prepare agendas, answer phone calls during her work hours, and other duties the chair performs as reasons she felt prevented her from continuing. Vice Chair Norman deVall chaired the last minutes of the board meeting after the resignation announcement.
During closing board comments, McColley and MCHCD Board Treasurer John Redding engaged in a heated back and forth discussion. Redding asserted that during McColley's four months as chair the board lacked leadership. He was also angered because he felt McColley linked his name with the disappearance of zoom recordings on February 8th and withheld what he believes is exculpatory evidence. He stated that he has “engaged a prominent San Francisco law firm” on his behalf. He termed McColley's actions a form of retribution.
He added that he feels the board majority (implying McColley, deVall, and Board Secretary Sara Spring) were “sweeping issues under the rug.” In this regard he referred to two payments made by McColley to attorney Jacob Patterson during February (one for more than $15,000) in what Redding called “defiance of the board's will.”
He added, “If we don't account for them [the aforementioned payments to Patterson], in my mind this board's betrayed the public trust.”
Are you waiting for the twist, the inevitable turn of the screw in the soap opera that MCHCD Board meetings and behind the scenes actions have become? Hold onto your hats, it will come.
Redding had another card up his sleeve. “If there's anybody on the Grand Jury listening tonight, please investigate us, please.”
He went on to call on McColley and Spring to resign from the MCHCD Board because of their use of Jacob Patterson after his contract as legal counsel was voted down at an August 26, 2021 board meeting then allegedly a majority of the board reaffirmed that decision at a February 24th closed session.
In his comments Redding seemed to link past chair Jessica Grinberg with Jacob Patterson on February 9th, the day after the presumed zoom disappearance. Redding stated that Grinberg and Patterson witnessed a forensic investigation into the disappearance by an Adventist Health IT employee. Redding asserted that the IT employee found multiple IP addresses on the suspect zoom system, but none of them were Redding's. He went on to say that Grinberg had apprised McColley of this three weeks ago. Redding accused McColley of refusing to release “exculpatory evidence” that would exonerate him of wrongdoing in the zoom disappearance case.
One could see Grinberg involved in this on February 9th in some sort of investigatory capacity, but why was Patterson needed? In a phone discussion with yours truly the day after the March 31st meeting, McColley stated she had contacted zoom personnel who demonstrated to her that the district's version of zoom did not support record keeping of identifiable IP addresses, thus she could not draw any definitive conclusion as to who might have caused the disappearance of the zoom recordings on February 8th. McColley also asserted she had not seen a written report about the supposed IT investigation on February 9th. She claimed that Grinberg took it upon herself, without board direction, to contact the Adventist Health IT employee to conduct a “forensic audit.” McColley added that her method of handling the February 8th zoom disappearance involved contacting the County District Attorney's office to pursue the matter.
Called on by deVall, Grinberg stated, “I have a great deal of information. I expect to be deposed.”
She did not make clear if that was by the DA's office, the Grand Jury, or some other entity. Grinberg noted that she is challenging the line items in Jacob Patterson's invoice for February 2022, in which Grinberg is cited in billings for February 8 (“Call from A. McColley and J. Grinberg re apparent deletion of meeting videos” - Quote from Patterson February 2022 invoice to MCHCD) and February 9 (“Call from J. Grinberg re follow-up about apparent deletion of meeting video and investigation of underlying facts” - again from Patterson’s February invoice), According to Patterson's invoice, the calls were one hour, six minutes and two hours, six minutes in duration, respectively.
McColley is noted in forty-seven separate billings of Patterson's February invoice. Grinberg is listed in six, in half sharing notice with McColley. All of Grinberg's notations in Patterson's February invoice revolve around zoom videos or the investigation into zoom recording disappearances.
Grinberg went on to say, “Knowing that I will be deposed in this situation, I feel that it is not appropriate for me to comment. I do have personal knowledge that is in contrast to comments that have been made by the chair, well, now the former chair [meaning McColley].”
All of that doesn't count as a twist in the story, though it possessed winding road aspects, and a final comment from a member of the public who addressed “several board members” to the effect that when you find yourself in a hole, maybe it's time to put down the shovel.
The day following the board meeting, the AVA acquired a document that appears to depict Board Treasurer John Redding approving, on his own, a 2022 payment of $16,473 to the legal firm of Best Best & Krieger (BB&K). This is the same John Redding who declared at the March 31st meeting that McColley's payment of slightly more than $15,000 to Patterson was “In defiance of the board's will.”
In part Redding was referring to the apparent defiance of the August 26, 2021 vote to deny Patterson a contract as legal counsel to the district. In addition, during January of 2021 and again in January 2022 the MCHCD Board passed resolutions that disbursement of the district's funds greater than $10,000 require the signatures of two board officers (the chair, the vice chair and/or the board treasurer). Otherwise such payments would require authorization by a vote of the full board at a public meeting.
It appears Redding violated that Resolution himself with the single signature for the $16,473 payment to BB&K in February 2022. This leads us to a subject that I brought up at the end-of-March meeting during an agenda item titled “Treasurer's Report.” The corresponding Tab for this report contained a document called “Mendocino Coast Health Care District General Ledger.” Within that ledger was another disbursement of district funds to BB&K in February in an amount greater than $17,900. The district's bookkeeping service depicts it as paid, yet there has been no mention of this greater than $10,000 payment at any board meeting this year. It is unlikely this disbursement of taxpayer funds had the required dual signatures of multiple officers (which would have been two of three out of Redding, McColley, and deVall).
The MCHCD General Ledger also depicts a mid-October disbursement of $23,500 to FTI Consulting for “CARES Audit prep.” There does not appear to be a corresponding action by the board of directors on or about that time approving this expenditure nor is there clear evidence of two officers of the board (at that time Chair Grinberg, Vice Chair McColley, Treasurer Redding) signing an authorization for the payment.
Those may look serious, and they are, but let's find the big potatoes in the bin. Between August 10, 2021 through March 4, 2022, MCHCD expenditures greater than $1,000,000 appear to have been made without full board authority a dozen times. It is unclear at this time whether any of those possessed the dual signatures of board officers required under their own resolutions. These expenditures ranged from one of more than $8.5 million, two of more than $5 million, two of more than $3 million, four of more than $2 million, and three expenditures of more than a million dollars each. Eight of these district expenditures occurred when Grinberg, McColley, and Redding were the board officers designated for the dual signature approvals. Four of the expenditures took place while McColley was board chair, deVall was vice chair and Redding was board treasurer.
How should these actions, or in-actions, be viewed? A March 30th email from MCHCD's bookkeeping service to then Chair McColley provides some major clues. The bookkeeper states, “I suggest that you seek the second approval on the prior bills for your documentation purposes... There are also recurring loan payments that prior to us [the bookkeeping service was first engaged by MCHCD in July 2021] also did not receive dual approval.
“Please also consider how are the transfers to AH [Adventist Health] being approved as they well exceed hundred[s] of thousands of dollars and at times millions, and they are 'transferring out' [of] MCDH bank accounts. During our call with Moss Adams [public accounting firm] it was stated that John [presumably Redding] approved them, but based on this, this is also noncompliant. Please explore your internal controls for all facets of approval and possibly draw up a flow chart of process and approval level.”
An out of the area, long-time observer and participant in these types of disbursements had an opinion on the matter after inspecting the MCHCD General Ledger. That person's assessment boiled down to, “Negligence,” then they threw in, “and lawyers would probably add the word 'Gross' [in front of negligence].”
Want another kicker? Of course, you do. In a prior article, a source assured me and by extension you, the readers, that if Jacob Patterson's January 2022 invoice was discovered, said invoice would not contain mention of the names of MCHCD Board members John Redding, Jessica Grinberg, or Norman deVall. Well, in the semi-immortal words of Meat Loaf, “Two out of three ain't bad.”
That January Patterson invoice finally made its way into the hands of the AVA. The invoice mentions then Chair McColley in thirty billings. It mentions board secretary Spring seven times. It also notes board member Grinberg in two phone calls with Patterson. One of only six minutes on January 28th and a forty-two minute three person call between Grinberg, Patterson, and McColley on January 31st commencing around 9 a.m. and apparently initiated by Grinberg. Since she has promised to challenge at least some of Patterson's February line items, the question here may be how many of these January billings Grinberg will challenge.
Like a thriller that has seemingly ended but hasn't, the camera is still rolling. At one point in the March 31st discussion of the MCHCD General Ledger, McColley tried to make a point about the need for double signatures for all the disbursements over $10,000.
Redding thought he was counterpunching in this statement. “When you started transferring money without my consent to Jacob Patterson..., I thought, well, I guess that policy doesn't really need to be enforced.”
If Redding was referring to his authorizing the $16,473 to BB&K, the ledger depicts that disbursement of funds going out from the district on the same day as two separate payments to Jacob Patterson, including the $15,101 McColley authorized. The ledger actually lists the BB&K $16,473 disbursement first. In addition, a $17,991 payment to BB&K is depicted on the ledger as going out about three weeks earlier than that. Both McColley and deVall deny signing off on either BB&K payment.
A January 28, 2022 email from an employee in the financial sector of Adventist Health to John Redding states, “Attached is the bank deposit listing from December 8, 2021 to January 27, 2022 that need[s] to be transferred to Adventist Health by 1/31/2022. Please approve for submission.”
Redding responded, “Yes, I approve the transfer.” Thus acting unilaterally on a potentially significant amount of money. He did cc the email to board chair McColley, but there is no record that Redding, as treasurer, reported this transaction to the full board or public in any February meetings. On January 31st, the MCHCD General Ledger depicts a district expenditure of $5,420,514.
In an October 2021 finance report authored by Redding, he cites a district payment of approximately $135,000 going into the IGT (Intergovernmental Transfer) program. In his report Redding stated he estimated that the money invested in IGT would come back to the district “10 x what is put in.” That would have represented a $1,350,000 payment to MCHCD.
In a January report Redding changed his prognostication to around $500,000. At the end of March, in Redding's words, the actual payment back from IGT was $308,000. This is your MCHCD Treasurer.
Back to his original October report, which was part of the agenda and the report may have been approved by the board (there were only three members present that evening), however, the report indicates that Redding had already sent the $135,000 to IGT. There is nothing in the record that indicates Redding received board approval to do so beforehand.
Furthermore, the email from the bookkeeping service alluded to earlier states that disbursements have been going out with only a single signature since last summer. As one of her last acts as chair, McColley sent an email to the bookkeeping service to only disburse more than $10,000 at a time with double signatures, meaning two from either chair, vice chair, or treasurer, in keeping with the board resolutions for disbursements beyond that dollar amount. Part of the bookkeeper's response stated, “I suggest that you seek the second approval on the prior bills for your documentation process.”
These communications essentially confirm that under two board chairs and for at least nine months the MCHCD Board was not adhering to their own resolutions regarding authorizations of payments of greater than $10,000.The communications from the bookkeeping service indicate that this had been going on even farther back into the past.
While the payments in millions to AH appear appropriate, the process established by the MCHCD Board itself has not been followed. The overriding point being, that like so many other things with this board, none of these payments were being disclosed to the public, from the tens of thousands to different attorneys or legal firms as well as consultants to the millions of dollars in disbursements to Adventist Health. It also points out the MCHCD Board cannot even do what they are supposed to do correctly; something as simple as payments or bills they were aware of in advance were not processed in the proper manner, with the appropriate oversight.
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