Two Fresno City Councilmembers are calling on Attorney General Rob Bonta to investigate how Valley Children’s has spent taxpayer-backed Medi-Cal funding in the wake of high compensation packages paid out in recent years to CEO Todd Suntrapak and the entire executive team.
Councilmembers Miguel Arias and Garry Bredefeld, who held a press conference at City Hall on Wednesday to discuss the compensation Valley Children’s gives to its executives, also want the California State Auditor to investigate how the hospital has spent Medi-Cal funds.
The backstory: As first reported by The Sun, tax returns from 2020 and 2021 show that Suntrapak received over $5 million each year in total compensation, while the hospital had an executive payroll close to $27 million, around double what other major children’s hospitals pay, including St. Jude Children’s Research Hospital.
Help from Bonta: Arias and Bredefeld said that they will make a formal request of Bonta this week to investigate Valley Children’s and to determine what changes need to take place to ensure state funding is being spent appropriately.
- Nonprofits in California are required to file their tax Form 990 with the Registry of Charities and Fundraiser, part of the Department of Justice.
Further state involvement: The duo are also requesting that Asm. Jim Patterson (R–Fresno) launch an audit of Valley Children’s and its expenditures of Medi-Cal funds.
- Patterson, a champion of the state audit process throughout his time in Sacramento, is a member of the Joint Committee on Legislative Audit.
- “Despite calls to audit Valley Children’s Hospital, the state has no authority to demand information on the executive salary and compensation of a private, non-profit,” Patterson said in a statement. “Any audit would only focus on programs and funding the Hospital receives from the state.”
“An absolute disgrace:” Arias and Bredefeld have long been supporters of Valley Children’s, noting that the hospital has enjoyed immense public trust for decades and has received millions of dollars in support through the annual Kids Day fundraiser.
- Bredefeld even posted pictures on Facebook last week of him participating in the fundraiser and asked people to support Valley Children’s.
- But that goodwill is gone for both councilmembers after they saw how much Valley Children’s is paying its executives.
- “It is an absolute outrage, and it’s a disgrace that the CEO and these executives are enriching themselves on the backs of sick and poor children,” Bredefeld said. “Moreover, nurses and support staff do not get the compensation they should be getting.”
- Arias added, “Politicians joined residents to peddle newspapers on dangerous street corners whether it rained, it shined, or there was a pandemic. Yet what we’ve learned is that Valley Children’s failed to disclose to us and everyone else volunteering that it was spending 12 years worth of Kids Day funds to buy one executive a home in Carmel.”
- Arias was referring to the $5 million loan that Suntrapak received for housing as a retention tool. Property records show that he purchased a home in Carmel-by-the-Sea in 2022 for $6.5 million. A Valley Children’s spokesperson told GV Wire that Suntrapak would only have to pay back the loan if he leaves the hospital.
- “I think Children’s Hospital has lost their way and forgotten their mission,” Arias said.
- He added, “Unfortunately, the truth is those who are responsible for our healthcare system have prioritized corporate profits, their personal pocketbooks, instead of serving those they were established to serve. The 2021 Valley Children’s tax returns and their response to this excessive pay scandal makes it clear that they have prioritized profits and awarding executives through record billings of Medi-Cal and working families.”
More oversight from the board: Arias and Bredefeld called on the hospital’s board members to justify the high salaries and total compensation packages given to Suntrapak and the executive team.
- They said Fresno County District Attorney and board member Lisa Smittcamp has failed the taxpayers by not providing enough oversight.
- “How this occurred when you have a board of trustees and everybody’s either looking the other way or they’re complicit with it, those questions need to be answered,” Bredefeld said. “She needs to answer those questions, along with every other board member, because this is an outrage. This is a disgrace, and it’s unacceptable.”
- Former Fresno Unified Superintendent Michael Hanson is listed as the chairperson for the Valley Children’s Healthcare Board of Trustees on the hospital’s website. He is also listed as the vice chair of the Hospital Board of Trustees.
- “The Central Valley has built one of the nation’s premier children’s hospitals,” he told Fresnoland. “In doing so, we have recruited and retained some of America’s best executives, caregivers and team members. As such, the quality of our care and the fiscal management of our organization is – and continues to be – best in class.”
- While he is the first board member involved with the hospital to speak on the issue, he is not listed on the 2021 Form 990 as a board member, making it unclear what role he actually has on the hospital board.
Storing money in offshore accounts: In addition to the executive pay numbers, the 2021 Form 990 also shows that Valley Children’s has nearly $125 million in investments in offshore accounts.
- The hospital has over $102 million in offshore investments listed in the Central America and Caribbean region.
- It also has over $22 million in investments listed in Europe.
