INCLINE VILLAGE, Nev. — The Nevada Commission on Ethics will hold a hearing to determine if a pair of former district trustees violated state law by allegedly failing to disclose conflicts of interest and accepting improper gifts regarding votes they made 20 months ago in favor of discounted meals for a group of residents.
Findings from a two-commissioner investigation in April concluded that former Incline Village General Improvement District trustees Bea Epstein and Ted Fuller admitted to not disclosing their membership with The Incliners, a well-known group of residents 49 years of age or older that exists under the umbrella of IVGID’s Senior Programs, according to a report filed last week by commission Executive Director Caren Cafferata-Jenkins.
Further, the duo’s votes at the Sept. 14, 2011, IVGID board meeting to OK a contract with Crosby’s Pub to provide the meals was a potential attempt to use their governmental position for their own financial interest, considering the deal allowed club members to avoid paying taxes for the food.
Fuller and Epstein deferred comment for this story to their attorney, Thomas P. Beko, with the Reno firm Erickson, Thorpe & Swainston. Phone messages for Beko were not returned.
According to Cafferata-Jenkins’ report, the board voted 4-0 (with then-trustee Chuck Weinberger abstaining) to approve a purchase order not to exceed $40,000 with Crosby’s for the service of nine to 10 meals between Oct. 1, 2011, and June 30, 2012, for The Incliners.
The vote allowed club members to avoid paying a 7.725 percent Washoe County sales tax on the monthly meals due to IVGID’s status as a tax-exempt public entity. The way the deal worked, The Incliners issued a check at the discounted rate to IVGID, which then paid Crosby’s.
The Incliners were able to save roughly $3,000 by not paying sales tax, according to the investigation, equating to about $20 annually per member.
“Whether warranted or not, IVGID’s approval of the purchase order conferred a benefit to members of The Incliners,” Cafferata-Jenkins wrote.
According to minutes from the Sept. 14, 2011, meeting, Fuller and Epstein did not indicate they were members of The Incliners prior to voting, but did so after being asked during public comment at the end of the meeting by Incline resident Aaron Katz, a former IVGID trustee candidate and frequent critic of the district’s actions over the last several years.
Crystal Bay resident Frank Wright, also a former IVGID trustee candidate and frequent critic, filed three requests for opinion of the commission on Dec. 24, 2012, regarding the issue, with the ones against Fuller and Epstein eventually being lumped into a single case.
On Tuesday, Wright said Cafferata-Jenkins’ decision could have far-reaching impacts, as he believes The Incliners is not an IVGID program, and thus taxpayer money was used to subsidize food for certain residents.
“It’s implicated the entire board, (IVGID General Manager) Bill Horn and his staff and The Incliners in a major conspiracy to defraud Washoe County and the state of Nevada out of sales tax,” he said. “It’s a blatant misuse of our recreation fees — they’re taking our money and letting (The Incliners) buy through IVGID’s tax-exempt status. This investigation has uncovered illegal activity, criminal activity, and it’s not going away. This is huge.”
Cafferata-Jenkins’ report was inconclusive as to whether The Incliners is an IVGID program. Until 2010, the group was registered as an independent Nevada nonprofit.
“The Incliners then appears to have dissolved its corporate status and became part of IVGID’s … programs, but no record was found making that official,” according to the report.
In an interview this week, Horn said The Incliners is considered an IVGID senior program, as is the Conversation Café and other clubs and groups.
According to the ethics report, the panel determined The Incliners — which operates its own bank account — is “neither an entity … separate from, nor a department within, IVGID.”
In related news, a third complaint stemming from the Sept. 14, 2011, vote filed by Wright against Weinberger alleging ethics violations regarding his personal relationship with the Diamond Peak Ski Education Foundation and as a former Sierra Nevada College faculty member was thrown out this April.
A date for the hearing regarding Fuller and Epstein has yet to be scheduled.
Copies of Cafferata-Jenkins’ report, as well as Wright’s original requests for opinion, can be found here.