DATELINE: February 24, 2009, Chicago
I heard how you was kickin' up some capers
When I was off in Kansas City Mo.
I heard some things you couldn't print in papers
From fellers who been talkin' like they know!
All Er Nuthin' from Oklahoma, Rogers and Hammerstein
Well there is one big difference between the Oklahoma judiciary and New Jersey’s judiciary. Years passed and $80 million in legal fees and other costs were incurred to resolve the Robertson Family dispute with Princeton University. In Oklahoma, it takes about a...
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week. Today, Oklahoma District Judge Patricia Parrish reinstated the five directors who had been removed from Feed the Children's board last December at a board meeting apparently convened at the Deep Fork Grill by Feed the Children President Larry Jones. For our earlier story, click here.
But we are willing to bet Judge Parrish’s ruling isn’t the end of this controversy. The Oklahoma Journal Record reported some of the allegations surrounding the controversial meeting. An attorney for the ousted directors characterized the December meeting as an “engineered deal.” Law Judge Reinstates Members of Feed the Children Board (Feb. 24, 2009). An attorney for Jones indicated that there was evidence that the removed directors wanted to replace Jones, but Judge Parrish apparently characterized the alleged effort as one to place Jones on sabbatical. Another attorney indicated that the Deep Fork Grill meeting was hastily called, allegedly to head off a meeting of Feed the Children’s audit committee scheduled for the next day.
Parrish apparently unsealed the record, noting that there was nothing in the record to suggest that the information surrounding the dispute or Feed the Children should be kept from the public. She also gave consideration to appointing a receiver to administer the charity while the two sides resolved their differences, but apparently chose not to do so. The Journal Record reported that attorneys for both sides claimed to be representing Feed the Children. We would love to see the engagement letters.
From a procedural standpoint, Judge Parrish questioned whether there was a quorum for the Deep Fork Grill meeting and whether sufficient notice had been provided. Both sides were instructed by the judge that no substantial changes are to be made to the organization until after a subsequent hearing, apparently scheduled for March 5.
Nolan Clay of the Oklahoman reports that the once ousted, now reinstated directors may have been disturbed that President Jones was allegedly making “costly decisions…without board approval.” Court Papers Reveal Details of Feed the Children Charity Battle: Judge Reinstates Board Members, Unseals ‘Feed the Children’ Lawsuit. (Feb. 24, 2009). There apparently also may be allegations that Jones’ son may have misused charity resources for personal gain, or at least Nolan says that is what court papers allege.
This dispute is far from over. Feed the Children is now a pawn on the chessboard of corporate governance. Here is some speculation on our part as to some possible scenarios: Once Judge Parrish exits the chessboard, the now reinstated directors could decide to fire Jones. Jones' response might be a wrongful termination suit. We also could see Jones starting a new charity and calling it Feed the Children. Now we have the potential for a lawsuit over the name. We have seen one report that in fiscal 2004, three corporate donors may have accounted for somewhere around 64% of the in-kind donations. If those donors are still significant donors and they start giving to a new charity controlled by Jones, will the original Feed the Children sue on some theory of interference, breach of duty, or damage to intangible property (the donor list and relationships)? See the subsequent discussion indicating that there may be more corporate donors and less concentration.
Remember Feed the Children raises about $1 billion a year so there is something worth fighting over. All of these possible scenaious are speculation on our part, but anyone who has observed disputes like this one knows that they can get nasty and take these sorts of turns.
What we can’t figure out is why the Oklahoma Attorney General hasn’t intervened. At least we haven’t seen any evidence of intervention. Does the AG lack jurisdiction?
Yesterday, we reported that the American Institute of Philanthropy gave Feed the Children an F several years ago. The Institute has more current ratings, but its ratings are available on a subscription basis so we have not been able to review the current rating. We have been told that the Institute's most current rating remains an F. In fairness, we should note that the BBB Wise Giving Alliance indicates that Feed the Children is a BBB Accredited Charity, which means it meets all 20 Standards for Charity Accountability and is a Seal Holder. This rating apparently was issued in June 2007 and expires in June 2009. BBB Wise Giving Alliance reports that for the fiscal year ended June 30, 2006 approximately 33% of donated materials were given by five corporate donors. According to BBB Wise Giving Alliance's Web site, the in-kind contributions included:
Medicine - $155,143,784
Food - $123,415,247
Books - $37,890,768
Clothing - $35,915,759
Toys - $35,188,530
Miscellaneous - $29,808,330
Furniture/appliances - $28,257,649
School supplies - $22,796,960
Hygiene - $21,457,866
Eyeglasses - $10,187,728
We will be watching and hopefully our new-found friends in the Oklahoma press will keep the stories coming. The national spotlight now shines brightly on Oklahoma City.
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