Copyright Los Angeles Times
With its scenic vistas and clear alpine waters, South Lake Tahoe long has been a destination for outdoor enthusiasts, vacationers and wealthy Californians looking for a reprieve from city life. It’s a place where people seem more eager to strike up a conversation about hiking, boating or skiing — depending on the season — than about the often-dull arena of local politics. That changed after South Lake Tahoe Mayor Tamara Wallace sent the local newspaper a letter this month confessing she’d stolen money from the Presbyterian church where she’d worked as an office manager and bookkeeper for seven years. Then she resigned. Adding to the local drama, news broke a day after Wallace’s revelation that the town’s mayor pro tem, Cody Bass, had been arrested following a recent early morning incident at a brewery. Bass was charged with misdemeanor trespassing and harassment, according to the Douglas County Sheriff’s Office and the Douglas County district attorney’s office. In a statement posted on Facebook, Bass denied any wrongdoing and said that he has “acted with integrity.” “I will absolutely not be stepping down from my position on the City Council,” he wrote. “I am committed to going through the due process to prove my innocence.” The one-two punch of political scandal has left residents questioning just who they’d put in charge of running their city of 21,000, which is grappling with issues like housing affordability and how to stay safe amid the threat of wildfire. In recent years, South Lake Tahoe has seen an influx of residents — many who came from the Bay Area looking for space during the pandemic. The growing pains have put pressure on natural resources — notably Lake Tahoe water quality — and on real estate values. The scandals are adding to the stress. “You can’t make this stuff up, it’s just so wild,” said Mark Salmon, a real estate agent who has lived here for decades. “Our whole town’s just shaking their heads. It’s a complete disaster.” None of the allegations involve misuse of public funds or are related to city business. But City Manager Joe Irvin felt compelled to assure residents that no council member alone could access city coffers and that audits were conducted annually. “The voters put their trust into these individuals, and I think their reactions of being hurt or disappointed are understandable,” Irvin said in an interview. “There will be a period of time where we have to work concertedly on rebuilding trust and always ensuring that we’re transparent with our community. I’m confident we will work through this.” Wallace’s embezzlement scandal began to unravel after she returned from a 25-day European vacation with her husband celebrating 25 years of marriage, according to screenshots of a social media post provided to The Times. Wallace wrote in the letter published by the Tahoe Daily Tribune that she was filled with such intense guilt, shame and grief that it pushed her into a mental health crisis and a suicide attempt on her birthday that landed her in a mental health facility. No one in her life had any idea that she had stolen from the church, she said. On Sept. 26, she was terminated by the church and law enforcement was made aware of the theft, according to a statement posted by the Lake Tahoe Community Presbyterian Church. The El Dorado County district attorney’s office is investigating the case. “My guilt came from my taking funds from a church that, individually and as a group, embraced me, showed me love, and trusted me as their church administrator,” Wallace wrote. “In my mind, I may have found justification by using most of those funds to help others, such as my deceased son’s three children.” Wallace wrote that she “in effect” turned herself in, but an attorney representing the church disputed that characterization, telling The Times that Wallace had not informed the church she had been stealing and didn’t write the letter to the paper until she knew the church had discovered the theft. The church is still undergoing a full accounting to determine how much was taken. Philip Dunn, an attorney representing the Presbyterian church, placed the losses at more than $300,000. Wallace didn’t confirm that number in her post. In one instance, Wallace wrote a check to herself and penned in the church’s ledger that the money went to a missionary, Dunn said. The most recently discovered theft was a $7,500 check Wallace wrote to herself, he said. The church fraud case isn’t the first time Wallace has faced legal troubles, according to El Dorado County court records. Federal Insurance Company, now a subsidiary of global insurance company Chubb, sued Wallace in 2006 and 2021. Records reviewed by The Times did not detail why Wallace was sued. The documents showed that the company had discovered a “theft of funds” in April 2006 and the former mayor agreed to repay $110,834. The law firm that filed the suit on behalf of the insurance company handles workers’ compensation cases, a representative said. As a result of the suit, Wallace was required to pay $200 a month to the insurance company, according to a promissory note reviewed by The Times. But she allegedly fell behind in the payments, prompting the company to sue her again, according to court records. In 2022, she agreed to make an initial payment of $2,500 by June 1 and then $400 monthly to the company until the amount was paid off. It is not clear whether the 2006 lawsuit spurred any criminal investigation and a representative for the insurance company could not be reached for comment. Wallace and an attorney representing her did not respond to phone calls seeking comment. After Wallace’s newspaper confession, calls for her resignation began to flood Nextdoor and local Facebook groups. Dana Tibbitts, who has lived in Lake Tahoe for 15 years, has been among those who have called for greater transparency. In small governments like South Lake Tahoe, councilmembers sit on a variety of boards and have an outsized influence on public policy, she said. “Tahoe is a special place. You can’t live here and not recognize this is a place to be taken care of and then when you see the contrast of what’s happening here with local politics, it’s just an awful dichotomy,” she said. Lake Tahoe has long been known as a playground for the rich and famous, including billionaire Facebook founder Mark Zuckerberg who built a massive compound on the west shore of the lake. But it also has a contingent of blue-collar residents — firefighters, nurses, hospitality workers and teachers — who call the city nestled in the Sierra Nevada home year-round. But making money and supporting a family in the region isn’t easy, particularly with rising rents exacerbated in the years following the pandemic and limited employment opportunities. “It’s beautiful, but it’s also tough to live here,” Salmon said. And that’s one reason that many people just aren’t that interested in local politics, until something significant happens, he added. “If you’re working two or three jobs, and so is your spouse, and you’re raising kids and you’re trying to go from dance to soccer practice to back-to-school night, you don’t have time for that stuff,” he said.
