- exposing the crisis in nonprofit fraud leadership…a crisis of pervasive and monumental waste, fraud, abuse, mismanagement, and malfeasance throughout the charitable sector which costs taxpayers and contributors tens of billions of dollars annually; and,
- seeking reforms that will restore the public’s lost confidence in the sector.
Hershey Trust Still In Trouble
Insider John Estey, a top official at the Hershey Trust Co., which manages the charity's finances, was charged by federal prosecutors with pocketing $13,000 that was to be used for lobbying state lawmakers as part of a sting.
In addition, Chuck Ardo, the spokesman for the Attorney General's Office, said that "we have not heard a satisfactory response from" the Hershey Trust on other outstanding concerns.
Before a 2013 agreement, there was no limit on board compensation. The 2013 agreement limited compensation to a base pay of $30,000 a year, but also includes more pay for attending meetings and heading committees. The attorney general’s office expressed "serious concerns regarding the apparent violations of the 2013 agreement."
In its latest filing with the IRS for the year ending July 31, 2014, the Hershey charity disclosed that Velma Redmond, the current chairwoman earned $97,500 in directors' compensation, Joseph Senser, the vice chairman earned $204,500, and long-standing board member and a former chairman who joined in 2001, Robert Cavanaugh, earned $332,500. The money could have come from multiple Hershey-related boards and may not be subject to the 2013 agreement.
The Hershey boards investigated the summer employment of Cavanaugh's son with "one of the trust's investment management firms."
Mark Pacella, the chief deputy attorney general, alleges the Hershey board's apparent "failure to exercise its best efforts in a timely manner to secure new board members" with experience in early childhood education and working with at-risk children. Several board members resigned as a result of the investigation.
The Attorney General's Office was seeking, by July 31, the resignation of board members who have served more than 10 years.
The thefts took place when he was involved with a gay composer and recording artist on whom he lavished gifts including trips to San Francisco and New York.
He created fake invoices of $15,000 from a Boston psychologist, submitting them to the diocese for reimbursement. He never was a patient of the doctor's and was ordered to repay the man's legal bills incurred as part of the criminal investigation.
- Silence: The Impending Threat to the Charitable Sector (Xlibris, 2011)
- Nonprofits: On the Brink (iUniverse, 2006)
- The Michigan Nonprofit Management Manual, Governance Section