We thought we had previously written about the goings on at
Florida’s Blood Centers—we certainly have included a discussion of the
conflicts of interest that existed at the center in our new Webinar, which will
be available later this year. We, however, haven't posted a blog about the story that first came to our attention last November when we were in Florida for a conference.
As it turns out, the Orlando-Sentinel has been running stories about this
nonprofit since...
The Stevens board of trustees may have hoped the settlement
with the New Jersey Attorney General would make the recent unpleasantness
disappear.Give the press
coverage and comments that we have received from a number of sources, we
suspect that much to its distress, the board now...
Editors of the Stute, pay attention. Here are some of the questions you might want to seek answers to as part of some hard-hitting, but neutral investigative journalism. (click here to see our earlier post on neutral journalism and the Stute)
On December 30, 2009, Lawrence T. Babbio Jr., the chairman of board of trustees of the Stevens Institute of Institute, posted a three-page update on the Stevens website. Here are some of the points he makes, and our corresponding comments and questions:
A. Independent Investigation. Babbio begins his letter by noting that the board of trustees appointed a special committee and an investigative committee to review the allegations contained in the New Jersey Attorney General’s complaint. He indicates that the board has retained...
We called it the nonprofit scandal of the year. Last week the New York Times took notice with a lengthy article by Sam Dillon. New Jersey College is Beset by Accusations (December 21, 2009). Today, the Times posted an editorial about the lawsuit filed by the New Jersey Attorney General against Stevens Institute of Technology officials. Scandal of the year, you say? Well we don’t often see the Times editorial page posting editorials on nonprofit scandals. As is true for prior years, this year we have seen...
I went out into the night, I went out to find some light. Kids are dyin’ out in the snow, look at them go, look at them go!
Arcade Fire, Power OutSam Dillon of the New York Times hit the front page of the paper with a blockbuster story about troubles at the Stevens Institute of Technology. College is Beset by Accusations in New Jersey. Our very own Jack B. Siegel is quoted early in the story, describing the Stevens litigation once again as the “case of the year” in the nonprofit world. With 9 days remaining, it looks like that claim will hold up. Dillon’s article assures that the case finally will receive the national attention that it deserves and that must frighten the board of trustees. Christmas came early for President Harold J. Raveche—unfortunately Santa came down the chimney bearing...
Train wrecks always make for great photographs, but train wrecks only serve a purpose if we learn from them. If the allegations made by the New Jersey Attorney General against those running the Stevens Institute of Technology turn out to be true, Stevens will become one of the great train wrecks in nonprofit history. Already the story offers...
A little under two weeks ago, New Jersey Attorney General Anne Milgram filed sued against the trustees of the Stevens Institute of Technology, Harold J. Raveche, Lawrence Babbio, and unnamed John and Jane Does in what, if the allegations prove true, could prove to be the story of the year in the nonprofit world. The 90-page complaint is sweeping in its allegations. Raveche is the CEO and Babbio is the chairman of the board and a member of the executive committee. While there have been incidents involving excess compensation, violations of the terms of restricted gifts, deception, failed investment management, and breach of the duty of care, we can't...
We wrote two days ago about Senator Grassley’s efforts to
use the cover of health care reform to avoid a debate over two provisions that
are unrelated to health care reform but that Senator Grassley is trying to insert into the Baucus proposal. One would authorize the IRS to ask governance-related
questions on the Form 990. The
other would eliminate the rebuttable presumption from the intermediate
sanctions.
We used strong language in our criticism. Rightfully so. Senator Grassley is obviously afraid
that a full airing of the issues surrounding his proposals might result in
their defeat. Both are bad ideas. By eliminating the rebuttable
presumption, Grassley will assure that thousands of large colleges, hospitals, other
charitable organizations, and their managements will be plunged into an abyss
of tax disputes with the IRS. Why? Because Grassley wants to substitute the business judgment of an IRS agent for that of a board of directors charged with setting executive compensation. Talk
about a waste of charitable resources.
What Senator Grassley really wants is wage controls for nonprofit executives, but he doesn’t have the guts to make that proposal. Senator Grassley is serving up a 21st century version of Robespierre's Law of Maximum, if not the ghost of Richard Nixon's wage and price controls.
We aren’t the only ones who are raising objections to
Senator Grassley’s “undercover of night” tactics. The American Society of Association Executives (ASAE) has
weighed in, voicing its opposition to Grassley’s efforts. ASAE is more diplomatic than we are,
but it nevertheless has written a strong letter in opposition to Grassley’s
efforts. We hope others in the
exempt organization community will voice their opposition to Senator Grassley’s efforts.
Internal Revenue Service - Circular 230 Disclosure: As provided for in Treasury regulations, any advice (but none is intended) relating to federal taxes that is contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.
THE FOREGOING IS NOT AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. IF LEGAL ADVICE IS REQUIRED, THE NONPROFIT OR OTHER PARTY IN QUESTION SHOULD SEEK THE ADVICE OF QUALIFIED LEGAL COUNSEL.
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There is a time and place for everything. Now is not the time or place for Senator Grassley’s crusade against what he claims to be excessive executive compensation in the nonprofit sector. Grassley has used his power and influence to submit two amendments to the health care reform bill currently working its way through the Senate Finance Committee.
Whether you are a Republican or Democrat, you have to acknowledge that our health care system is in need of reform, if for no other reason than ever escalating costs that continue to outstrip the overall rate of inflation. Unfortunately this August brought little light to what has become a typical ideological debate pitting the far Left against the far Right in a circus, with Glenn...
Last November, Boston Globe reporters Frank Phillips and Peter Schworm reported that a Suffolk University trustee’s firm provided lobbying services to the university at a rate of $10,000 per month. Trustees’ Fiscal Ties Roil Suffolk, Conflicts–of-Interest Policy Scrutinized (Nov. 26, 2008). The reporters revealed the related-party transaction in connection with reports that Suffolk University’s President David J. Sargent was the highest paid university president in the nation, receiving a $2.8 million compensation package. The trustee, Robert Crowe, also is a member of the board’s executive committee. According to the Globe, Crowe played a “leading role” in setting Sargent’s compensation. Both the university and the trustee...
