Over $23 million in Prop 63/MHSA funds is being diverted to organizations associated with Oversight Commissioners and committee members

“Insider Dealing in MHSA Funds”

In August 2013, the California State Auditor found the Oversight Commissioners failed to exercise oversight of MHSA expenditures and went on to say therefore the state has no way to know if the funds were spent appropriately. We believe that is because the commissioners and committee members lack indepnendence and have conflicts of interest which in any other area of government would make them ineligible for service. Mental Illness Policy Org (MIPO) found that over $23 million in Mental Health Services Act (MHSA) funds are going to organizations currently or formerly run by those responsible for oversight of the expenditures. The commissioners approve expenditures, receive the expenditures, hire evaluators to say the programs run well, and PR firms to convince the public.

Proposition 63 established the MHSA fund to provide services to individuals with “serious mental illness” and prevent those “with mental illness” from having it become “severe and disabling”. Proposition 63 also established the Mental Health Services Oversight and Accountability Commission (MHSOAC) to approve certain MHSA expenditures which are presented to them as part of county mental health plans or though the California Mental Health Services Authority (CalMHSA), a Joint Power Authority that pools the resources of individual counties.

In preparing this report, we examined the 2011 “Prevention and Early Intervention” (PEI) component of MHSA which represents 20% of overall MHSA funding. We did not look for potential insider dealing in the other 80% or in prior years. By examining the 2011 CalMHSA Funding Report which includes PEI grants by dollar amounts; a list of PEI programs funded by MHSA which does not include dollar amounts; and looking at the boards of directors for major recipients and comparing it with the names of those who serve the oversight commission board or committees we were able to identify over $23 million approved by the commission going to organizations commissioners are associated with.

(Note: Some of this info is from our original investigation and some has been updated)

Rusty Selix ($5.92 million; $1.247 million personally).

Rusty Selix is on the MHSOAC Mental Health Funding and Policy Committee and Evaluation Committee. He is Executive Director of Mental Health America of California (MHAC). MHSOAC commissioners approved one grant for $3 million and another for $2.92 million to MHA of San Francisco a chapter of MHAC. Other chapters of MHAC that had their grants approved by oversight commissioners include MHA Orange County (two grants); MHA LA (2 grants); MHA of SLO; and MHA Sutter-Yuba.

For his work, MHA/CA paid Mr. Selix $398,000, in 2011 representing 70% of their total revenues. His 2010 compensation was $681,758.

Mr. Selix is Executive Director of the California Council of Community Mental Health Agencies (CCCMHA). It is a ‘related entitity’ to MHA/CA. CCCMHA members also receive MHSA funds.( See Richard Van Horn, below.) Mr. Selix received $681,758 in compensation from CCCMHA (per CCCMHA 2010 990 IRS form). In 2011, he received $849,000 from CCMHA representing more than their total revenue for that year. The combined compensation of Mr. Selix was therefore over $1 million dollars primarily MHSA funds.

Richard Van Horn ($11 million, $111,175 personally)

During the period of our study, Richard Van Horn was the MHSOAC Vice-Chair and on the board of California Council of Community Mental Health Agencies (CCCMHA) a membership organization of community mental “health” providers. Rusty Selix is Executive Director and received $681,758 in compensation. MHSOAC commissioners approved $2 million to go to CCCMHA member Didi Hirsch Psychiatric Services. They approved $9 million to be split between CCCMHA members Transitions Mental Health Association, Kings View Corporation and others. The MHSOAC commissioners approved grants for the following CCCMHA members: Anka Behavioral Health; Bonita House (2 grants); Buckelew Programs; Chamberlain’s Mental Health Services; Edgewood Center for Children and Families; EMQ Families First (3 grants); Fred Finch Youth Center (2 grants); La Clinica de La Raza; Pacific Clinics (3 grants); Rubicon Programs; San Fernando Valley Community Mental Health Center; Seneca Center; Social Model Recovery Systems: and Tulare Youth Service Bureau.

Mr. Van Horn has also been President and Chief Executive Officer (CEO) of the Mental Health American of Los Angeles (MHALA) which received at least two grants. MHALA paid Mr. Van Horn $111,175 (per 2009 990 IRS form) Mr. Van Horn is a member of the board of the Mental Health Association of California (See grants listed under Selix).

Eduardo Vega, ($2.9 million)

Eduardo Vega is an MHSOAC Commissioner. He is on the board of directors of Disability Rights California (DRC) a special interest law firm active in preventing counties from using Laura’s Law, to help persons with serious mental illness. DRC received a $2.9 million grant approved by Mr. Vega and the other commissioners. Mr. Vega has served as the Executive Director of the Mental Health Association of San Francisco (MHA-SF) that received two grants each in the $3 million range for a total of almost $6 million. Previously, he served as Associate Director of Project Return. Project Return received a MHSA grant.

Ralph Nelson Jr., ($3 million)

Ralph Nelson is an MHSOAC Commissioner. He is a former president of the National Alliance on Mental Illness in California (NAMICA) and now a member the parent NAMI Board. NAMI CA received a $3 million grant of MHSA funds. Local chapters of NAMI that received MHSA funding include NAMI Sonoma and NAMI Orange County. Other NAMI chapters run programs benefiting from MHSA funds including NAMI Butte; NAMI Riverside (2 programs); NAMI San Diego (3 projects); NAMI San Mateo (2 projects); NAMI Santa Cruz; NAMI Sonoma; NAMI Stanislaus (4 projects): NAMI Ventura (2 programs;) and NAMI Amador (3 programs).

Delphine Brody and Sally Zinman ($1.5 million)

Delphine Brody is on the MHSOAC Services Committee and Sally Zinman is on the Client and Family Leadership Committee. Ms. Zinman founded and Ms. Brody is Director of Public Policy for the California Network of Mental Health Clients (CNMHC). The Commissioners approved a grant of $1.5 million to CNMHC. In addition to using the funds to support their work in opposing Laura’s Law, funds were diverted by other CNMHC employees to personal use.

Discussion: MHSA funds not reaching seriously mentally ill voters intended funds to serve

    1. While many of these grants were given out by counties and CalMHSA, all were required to be reviewed and approved by the Oversight Commissioners. In addition, counties and CalMHSA, are dependent on the commission to approve other grants they make. We don’t know if this affected their choosing organizations associated with MHSOAC.
    2. MHSOAC does not require programs to report the diagnosis (or potential diagnosis) of those being served by the programs either before or after approving their funding. So MHSOAC can not know whether the programs are entitled to MHSA dollars. 100% of people can have their “mental health” improved.[1] 25% of Americans had “any mental illness” in the past year.[2] Many of the organizations MHSOAC Commissioners are associated have a history of helping the 100% who can have their mental health improved or the 25% who had ‘any mental illness.’ But Proposition 63 was not intended for those two groups. Proposition 63 specifically targeted the 5-7% of adults with “serious mental illness” and the 5-9% of children with “serious mental illness”.[3] Rusty Selix, a co-author of Proposition 63 said it best when explaining the legislation, “And they (voters) didn’t want to fund all mental health, only people that had severe mental illness.”[4] While MHSOAC is quick to point out the ‘improvements’ in projects they are approving funds for, they are not ensuring those who received the funds were eligible. For example, improving reading scores, helping someone get a job are both worthy endeavors, but not within the Purpose and Intent of Proposition 63.
    3. The legislation specifically limited PEI funds to programs that “prevent mental illnesses from becoming severe and disabling” or “limit the duration of untreated serious mental illness.”[5] MHSOAC does not require PEI programs to report what “mental illness” their clients have that they are preventing from “becoming severe and disabling” or what untreated serious mental illness they are reducing the duration of. Since MHSOAC do not collect the data, MHSOAC can not know if the programs are entitled to receive MHSA funds. MHSAOC has justified expenditures by saying they “prevent” mental illness. Schizophrenia and bipolar disorder are the two most common forms of ‘serious mental illness.’ The cause of these disorders is related to genetics and biology and there is no known way to prevent them.[6] There are ways to prevent those who have the disorder from having it become “severe and disabling”, but PEI funding is not going to those programs.
    4. Funds are not being spent cost-effectively. The legislation requires the programs to be cost-effective. Many of the programs approved by MHSOAC commissioners for their own organizations are defended as being related to prevention, suicide, and outreach. For example, one “outreach” program is focused on Hmong who garden. But outreach is not being done to the offspring of people with serious mental illness. Offspring of people with mental illness are much more likely to develop mental illness than Hmong who garden. Spending the funds on the offspring of mentally ill would be a much more efficient use of the funds. Likewise, Suicide Prevention funds are not being targeted to those identified by the California Strategic Plan on Suicide as most likely to commit suicide: individuals with known mental illness. Instead, they are focusing on the general public, a population at low risk for suicide.
    5. MHSOAC approved an $11 million grant from CalMHSA to a PR firm that is being used to generate positive press for the program and commissioners and minimize negative. MHSA funds are also funding a radio show designed to present the program in the best light . In addition to being a diversion of funds away from serving people with serious mental illness, this effort is preventing the public from understanding problems within the program. That has a deleterious effect on people with serious mental illness. The exact opposite of what funds were intended for.
    6. Mr. Selix, Mr. Vega, Mr. Nelson, Ms. Brody, Ms. Zinman and their organizations have all lobbied against treatment for people with the most serious mental illnesses who are so ill they are not aware they are ill. They have played a role in preventing counties from implementing Laura’s Law which helps prevent people with serious mental illness from becoming violent.

Recommendations: Make MHSOAC Board Independent

  • Make the Oversight Committee Independent: Individuals responsible for distributing or represent organizations that receive MHSA funds should not be allowed on oversight committee. They are not independent. Appointees should be free of financial interest as defined in Section 87103 of the Government Code with entities distributing or receiving MHSA funds.
  • Prohibit Insider Dealing. No funds should go to programs associated now, or within the last five years with board or committee members of the Mental Health Services Act Oversight Committee.
  • Eliminate regulations and polices put in place to prevent MHSA funds from reaching seriously ill or that channel funds to programs that do not serve seriously ill. Policies and regulations put in place by MHSOAC and the former California Department of Mental Health designed to prevent funds from reaching those with serious mental illness[8]; or divert funds away from those with serious mental illness[9] should be removed.
  • Clarify that being eligible for Laura’s Law does not make individuals ineligible for MHSA funds.


The Associated Press, Capital Weekly California Progress Report , The California State Auditor, Mental Illness Policy Org and others have documented MHSA funds are not reaching the most seriously ill. Thanks to the generosity and altruism of voters who passed Proposition 63 California is the only state in the union where money isn’t the problem, leadership is. While many MHSA funded programs do serve people with serious mental illness, due to lack of independent oversight, many do not.

About Mental Illness Policy Org.

Mental Illness Policy Org. is an independent think-tank that provides media and policy-makers research-based unbiased information on serious mental illness (not ‘mental health’). To maintain our independence, we do not accept donations from pharmaceutical companies or government agencies. We are totally dependent on the generosity of those who care about serious mental illness. Most of our support comes in the form of small donations from families of people with serious mental illness.

California Laura’s Law Site
Waste and Fraud in MHSA Site
New York Kendra’s Law, AOT and Problems in Office of Mental Health
National Site


[1] Proposition 63, Findings and Declarations.

[2] Statistics on “mental illness” and “serious mental illness” from “Mental Disorders in America” National Institute of Mental Health available at http://www.nimh.nih.gov/health/publications/the-numbers-count-mental-disorders-in-america/index.shtml#Intro

[3] Proposition 63 Findings and Declarations, and repeated in “Purposes and Intent”. The statistics on “serious mental illness” are virtually identical to those of NIMH, “Prevalence of Serious Mental Illness Among U.S. Adults by Age, Sex, and Race” available at http://www.nimh.nih.gov/statistics/SMI_AASR.shtml

[4] “History of Mental Health in California” 4/5/10. UCLA Health Services Research Center Rusty Selix interview available at http://www.mhac.org/pdf/Rusty-Selix-Interview.pdf

[5] WIC 5840(a)

[6] There are however ways to prevent schizophrenia and bipolar from becoming “severe and disabling’ ex., through the administration of medications and that is what PEI is intended for . Following is info on the biology.
A. Schizophrenia manifests itself in teens and twenties. There is no test to predict who will get it. There is no way to prevent it. The illness occurs in 1% of the general population, 10% who have a parent or sibling with the disorder; and 40-65% of those who have an identical twin with the disorder. Exposure to viruses or malnutrition before birth, and problems during while in utero may trigger the disorder in those genetically predisposed. Diagnosis is made after the fact by eliminating other causes and analyzing the effect of the disorder on the individual. We do not know how to prevent schizophrenia. Any program that purports to prevent schizophrenia by intervening before it is diagnosed is not. We do know how to prevent schizophrenia from becoming severe and disabling and that is to offer treatment and support to those who already have it.
B. Bipolar disorder often develops in a person’s late teens or early adult years. There is no test to predict who will get it. There is no way to prevent it. Children with a parent or sibling who has bipolar disorder are four to six times more likely to develop the illness, compared with children who do not have a family history of bipolar disorder. Proper treatment helps most people with bipolar disorder gain better control of their mood swings and related symptoms. This is also true for people with the most severe forms of the illness. Any intervention that purports to prevent bipolar does not do so.

[7] These recommendations are only intended to reduce insider dealing. We have other recommendations on how to assure MHSA funds reach those voters intended.

[8] Ex. CCR Title 9 Regulation 3400(b) actually exempts PEI programs from having to spend their MHSA funds on people with mental illness. This is contrary to the Purpose of Intent of MHSA which was specifically to serve people with ‘serious mental illness’.

[9] Ex. MHSOAC reviewed a PEI plan submitted by Monterrey County that did serve people with serious mental illness. MHSOAC asked Monterrey to elminate the part of their plan that was helping people with mental illness. MHSOAC wrote “To be consistent with this definition, MHSA-funded PEl programs cannot serve people with a mental health diagnosis. Several of Monterey County’s PEl programs currently target mental health consumers; however, to be consistent with the PEl Guidelines, please clarify that these programs include persons without a mental health diagnosis.” (emphasis added) http://mhsoac.ca.gov/Counties/PEI/docs/PEIplans/PEI_Monterey.pdf