[IMPORTANT UPDATE: Please see the Oct. 5 post on the Getty, for a new CultureGrrl shocker from the California Attorney General's office.]
Why is the California Attorney General’s report on the J. Paul Getty Trust’s violations of the public’s trust such a profoundly unsatisfying denouement for the sordid saga of its board’s and president’s misjudgments and misdeeds?
It’s not just that the Getty appears to have gotten a mere slap on the wrist, having prudently preempted more serious punishment by instituting needed governance reforms before the Attorney General could force it to do so. The buzz about the Attorney General’s light touch on this weighty matter has been so great that when I called the office’s press spokesperson, Tom Dresslar, he felt impelled to rebut “the notion that the Trust got off easy,” even though I hadn’t yet raised any question about the disconnect between the Attorney General’s mild rebuke and the Getty’s wrongful actions:
They paid a price. They were the subject of a critical report issued by the Attorney General to the public. They will be subject for the first time in California history to continued oversight by an independent monitor [former Attorney General John Van de Kamp], to make sure that they follow through on their reform commitment. They took some hits. The Trust was made whole for improper expenditures.
But was it?
The problem with the 12-page public summary of the Attorney General’s findings is that there is no way of knowing. Dresslar declined to release the facts and figures on which the report’s conclusions are based, asserting that information acquired during his office’s investigations is “exempt from public disclosure under the Public Records Act of California.”
Similarly, the Getty’s vice president for communications, Ron Hartwig, told me today:
The Getty will not be making public the reports the Trustees’ special committee received from counsel, the Getty’s responses to the Attorney General’s requests for information and documents, or the confidential letter [containing more details than the public report] we have received from the Attorney General. Their confidentiality is protected by California law.
So we have to take on faith the Attorney General report’s conclusion that “the Trust has been compensated for the losses” from improper expenditures, thanks to the settlement it made with Barry Munitz, the Getty’s former president. Munitz resigned in February, amidst a firestorm, stoked by relentless investigative reporting and analysis by the LA Times, over his misuse of funds. He agreed to pay $250,000 to the Trust and forfeited a severance package of more than $2 million that he might otherwise have received.
But we have no way of doing the math to calculate whether the payment by Munitz did in fact provide adequate compensation, because the report gives no figures for the specific expenses that he wrongfully incurred. Among those listed in the report: travel expenses for his wife, excessive travel expenses for himself, using employees to run personal errands, paying fees to a graduate student/consultant who “did insufficient work…to legitimately earn those fees.” (The Attorney General did, however, choose to make public the improper expense of $21,561.16 for artworks bestowed upon four retiring trustees.)
Even worse, the report supplies no back-up data to support its conclusion that more serious alleged irregularities, potentially far more costly, were undeserving of censure: It asserts that information provided by compensation consultants retained by the Getty indicates that Munitz’s generous compensation for his services was “reasonably based on data of the average compensation paid to chief executives of other, comparable nonprofit charitable organizations.” But the report provides no actual comparables to support this conclusion. Indeed, a recent survey by the Chronicle of Philanthropy found that Munitz’s $962,526 compensation in 2005 made him the second-highest paid executive of any cultural nonprofit in the country, exceeded only by that of Michael Kaiser, president of the John F. Kennedy Center for the Performing Arts in Washington.
Similarly, the report supplies no comparables to support its conclusion that the Getty’s $2-million sale in 2002 of a vacant residential lot in Brentwood to prominent businessman and collector Eli Broad was reasonable. It only quotes one “independent real estate appraisal expert,” unnamed in the report, who “concluded the fair market value of the property at the time was $1.8 million.” As the report notes, Broad is “allegedly a close friend and professional associate of Dr. Munitz.”
But by far the biggest expense that Munitz may have caused the Trust is the $3 million paid to Deborah Gribbon, who resigned as director of the J. Paul Getty Museum in 2004, in return for this monetary settlement.
“At the time she resigned, Dr. Gribbon had a claim against the Trust for unlawful ‘constructive discharge,’ as well as other potential employment-related claims,” according to the Attorney General’s report. The exact nature of those claims has never been disclosed. But when I asked Dresslar if, as has been widely assumed, Munitz’s actions had led to Gribbon’s claim, the spokesman replied (inaccurately but revealingly), “I think we pretty much came out and said that in the report.” He added that Munitz had not been asked to compensate the Trust for the Gribbon settlement, because this expenditure was deemed a “proper” expense of the Trust: Without it, the Getty might have been subject to even greater expenses and damages, stemming from litigation.
The much publicized personal friendship between Munitz and Bill Lockyer, California’s Attorney General, made it all the more essential for Lockyer’s report to provide sufficient detail to instill confidence that the investigation was thoroughgoing and that its conclusions were supported by well documented evidence. With this report, and with the refusal by all parties to provide further details on its findings, it’s not just the Getty Trust that has shown disregard for its public trust; it’s also the California Attorney General’s office.
The damage that this sorry episode inflicted on public confidence in the Getty and, by extension, on all nonprofits, is perhaps the biggest cost of the inadequate oversight by the Getty’s board of Munitz’s actions—a loss for which there can never be adequate compensation.