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“Egregious Mismanagement”: Save the Corcoran’s Serious Allegations in Court Filing

Andrew Tulumello, lawyer for Save the Corcoran

Andrew Tulumello, Save the Corcoran’s lawyer

The Corcoran Gallery’s trustees, in a brief filed today, argued that Save the Corcoran’s 40-page complaint and petition to scotch the planned merger with George Washington University and the National Gallery “amounts to ‘obstruction for the sake of obstruction’ that would disrupt the coming school year for art students and force the sale of artworks to pay for operations,” according to David Montgomery‘s Washington Post report. (Montgomery doesn’t link to the actual document; I’ll add that link at the top of this paragraph, if and when I get it.)

With the deadline (noon tomorrow) looming for whose wishing to send comments to D.C. Superior Court on the Corcoran Gallery’s merger plan (in advance of this Friday’s cy près hearing), let’s take a closer look at the arguments of the Save the Corcoran (STC) coalition, which has formally asked recently appointed Judge Robert Okun to give it legal standing in the court proceedings on whether the merger may occur.

Here are key excerpts from STC’s complaint and petition:

—To the extent the Corcoran faces steep challenges today, it faces them due to the peculiar and egregious mismanagement [emphasis added] of the Board. If the Corcoran were a public company, these directors would have been sued long ago for breaches of fiduciary duty and corporate waste and voted out of their position by shareholders. [The filing, linked at the top, gives details, on pp. 4-6, of actions that STC regards as the board’s “bewildering, mystifying series of steps that violate its trust obligations and charter and cast its judgment into serious question.”]

—The current Board is unwilling and unfit to solve the Corcoran’s problems. Yet the Trustees remain unwilling to step aside for a new Board both willing and fit to lead.

—[The] “decline” in [financial] contributions…did not just “happen” to the Corcoran; the Corcoran’s Board actively caused it. It is no surprise that when a Board publicly and repeatedly signals a lack of faith in its own institution, and telegraphs to the world that it has no forward-looking vision, potential donors will be discouraged.

—The recent financial audit performed by the University of Maryland should reveal the true state of the Corcoran’s condition. The charitable purpose of the Trust may yet be practicable, if properly managed. In order to exercise its equitable powers in the public interest, then, this Court should scrutinize the Corcoran’s finances to ensure that the charitable purpose of the Trust has become impracticable. Plaintiffs oppose cy près relief unless the Board publishes any audit or review of the Trust’s finances conducted by the University of Maryland [my link, not theirs] to help inform the Court’s decision-making. [Emphasis added.]

STC has asked the court to take the following steps. To my mind, these seem reasonable, desirable and respectful of both donor intent and the interests of the Corcoran’s stakeholders:

—Order the Corcoran Trustees to provide a complete and verifiable accounting of the Corcoran’s financial condition and financial performance over the last decade.

—Appoint a special committee of respected individuals to review this and other information available to the Board and direct that committee to report to the Court on whether there are viable alternatives to the complete dissolution of the Trust.

—Direct the Trustees to produce any audit or review of the Trust’s finances conducted by the University of Maryland.

—Issue an order removing the current Board; directing that the Corcoran collection remain intact; and requiring the Gallery to continue to provide space for local artists, including students and D.C. artists, to exhibit their work.

—In the alternative, if the Trustees’ financial mismanagement has caused the Trust to become impracticable, issue an order denying cy près relief altogether.

The D.C. Attorney General’s Office has yet to announce its position on the Corcoran’s cy près request. But STC has asserted in a court filing that the AG doesn’t oppose the merger. In a blog post on its website, STC states:

If Save the Corcoran does not get standing, the trustees plan goes forward.

But that’s true only if the AG acquiesces and no one else seeks and receives legal standing to oppose the plan. (Hypothetically, that could be surviving heirs, if any, of founder William Corcoran or mega-donor William Clark.)

The Corcoran’s 204-page cy près filing suggests that the AG has been a party to drawing the roadmap for the proposed merger:

Pursuant to discussions among representatives of the Corcoran, the NGA [National Gallery of Art] and the Attorney General [emphasis added], the Corcoran has agreed to a plan and policy that will give preference to museums and institutions in the District of Columbia to receive the works that the NGA does not accession, and to assure that there is an opportunity for review prior to works being transferred out of the District of Columbia.

That doesn’t necessarily mean that the AG supports the plan, only that he might be less inclined to endorse it if most of the art left his jurisdiction.

We should know more about Irvin Nathan‘s position very soon. Given the usual stance of attorneys general in such matters (with at least one shining exception), I’m cautiously pessimistic.

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