Wednesday, March 30, 2011

Bowl Games Nailed...more to come

by Gary Snyder

Nonprofit Imperative told you about the free spending leaders of the Bowl Games. There has been a shake up in at least one. The chief executive of the nonprofit that runs college football’s Fiesta Bowl was fired after an internal investigation alleged that the charity’s leaders urged employees to make political contributions and reimbursed them with bogus bonuses. John Junker, who has led the Tempe, Ariz., game for three decades, had been on administrative leave since February for refusing to cooperate with an investigative panel commissioned by the organization’s board of directors. Natalie Wisneski, the chief operating officer, and Jay Fields, the vice president for marketing, have resigned. The investigators’ report, released Tuesday, also details alleged use of Fiesta Bowl funds on trips for Arizona politicians, a lavish 50th birthday party for Mr. Junker, and a $1200 visit to a Phoenix strip club. The Arizona attorney general’s office is investigating whether the allegations warrant a criminal investigation, and legal experts said it is possible the organization’s tax-exempt status could be at stake. We are confident that more heads will roll at other bowls in months to come.

Thursday, March 24, 2011

Lack of Enforcement Costs State $250 million

by Gary Snyder

Nonprofit Imperative constantly tells you that restitution is seldom discharged (3.2% is):

In a Michigan auditor general's report, the agency—the Department of Energy, Labor and Economic Growth—failed to collect tens of millions of dollars in overpayments and failed to assess and collect hundreds of millions of dollars in restitution and penalties for fraudulent claims. Rather than cutting off benefits immediately to claimants suspected of fraud, the agency continued to make payments while it referred the case to a fraud unit that had a one-year backlog. The audit found $72.5 million in overpayment of benefits and unassessed penalties of between $120 million and $236.6 million. In a response included with the audit, the agency attributed some of the problems to the huge caseload increase that resulted from the lengthy recession in Michigan.

Tuesday, March 22, 2011

What Took So Long?

by Gary Snyder

The board of trustees at the nonprofit MediSys Health Network fired its indicted chief executive. What took so long? The board acted this month when David Rosen was charged with bribing three politicians: the late Assemblyman Anthony Seminerio, State Sen. Carl Kruger and Assemblyman William Boyland Jr. Mr. Rosen has pleaded not guilty. They declined to suspend or fire Mr. Rosen after he was implicated in the bribery and corruption indictment of Mr. Seminerio in September 2008. Some board members' unusually close ties to Mr. Rosen may be the reason. There are four interrelated boards of trustees connected to the indicted executive—MediSys and Jamaica Hospital Medical Center—the system also includes Flushing and Brookdale hospitals. The boards have a higher-than-usual concentration of trustees who also work at the hospitals, making them dependent on Mr. Rosen for their paychecks. Others have been board members for decades.
The MediSys-related boards are unusual. Crain's New York noted one member, Queens restaurateur Anthony Federici, is described in media reports as a captain in the Genovese crime family. The boards include a notable number of doctors working at the system, including Brookdale's Dr. Alvin Kahn. He is listed in the hospital's 2009 tax forms as chairman under a section for trustees, directors and officers, with compensation of $307,412. Dr. Kahn is 82, and his salary has puzzled state officials, who believe that he is being paid for his role as trustee. Dr. Kahn's daughter also is on one of the four boards. Another board member, businessman Alex Rovt once offered to loan Brookdale money to meet its operating expenses. He asked for hospital real estate as collateral. The chairman of Mr. Rovt's company, Steven Plotnick, and one of its attorneys, Irina Benfeld, also are on MediSys-related boards. A former counsel, Margaret Johnson, claims that trustees “vote the way Rosen directs.” The trustees “are a mere alter ego of Rosen (and a few others).”
MediSys are the subject of a 2009 lawsuit by a former Brookdale general counsel who seeks $100 million in damages, alleging wrongful termination and claiming that conflicts of interests were rampant at the boards under Mr. Rosen's control.
Mr. Rosen, earned about $1.8 million in 2009 and two associates earned $1.4 million each.

Wednesday, March 9, 2011

A Pastor: $2 million + Zoo, Church and Parishioner Fraud

by Gary Snyder

An evangelical pastor in Montreal, Canada whose ex-followers say he fleeced them of hundreds of thousands of dollars was arrested in connection with a nearly $1-million fraud case at a zoo. He faces fraud charges in connection with $978,000 allegedly diverted from Parc Safari Zoo from 2005 to 2008. He faces a string of lawsuits for unpaid bills, bounced checks and bad debts. Last July, a group of former church followers allege that he had talked them into loaning him cash - $142,000 in one case - and never paid them back. They said some members of the multiethnic congregation mortgaged their homes or borrowed with high interest credit cards to meet his requests for money. He is also charged with embezzling $734,734 over three years on behalf of Actions Bethel du Canada Inc., a charity based at the church.

Wednesday, March 2, 2011

Such A Deal: Another Ripoff

by Gary Snyder

Cleve L. Killingsworth, who abruptly resigned last March as chief executive of the nonprofit Blue Cross Blue Shield of Massachusetts, collected $8.6 million in compensation from the state’s largest health insurer in 2010. The $8.6 million that Killingsworth, 58, took with him is a combination of the $273,040 salary he received for his 2 1/2 months at the insurer last year; a $922,480 bonus for his work in 2009; and $7.4 million in additional compensation, according to the regulatory filing. That additional money represents the severance and retirement payments that accrued over his six years at Blue Cross, including almost five years as chief executive.

To show the strength of its governance,in 2009,the health insurer's membership declined, its net income fell 49 percent, it laid off employees, and received of double-digit premium increases, Killingsworth was rewarded with a 26% increase in salary and bonus.

But this is a deal compared to his predecessor, William Van Faasen, who received $16.4 million in retirement benefits in 2006. Van Faasen, who took over again as acting chief executive after Killingsworth departed, is currently the company’s chairman. Can’t wait to see the remuneration for Van Faasen for his latest roles.

As is frequently the case, the state attorney general is monitoring compensation practices at health care companies and done nothing.