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LA MOCA’s Financial Morass: Bloomberg’s Kazakina and Palmeri Expose the Shortfalls

LA MOCA’s Boardroom

It’s amazing what a little investigative reporting can do.

Kudos to Katya Kazakina and Christopher Palmeri of Bloomberg, who dug out documents and interviewed concerned MOCA trustees to uncover the most disturbing picture yet of the state of the disarray in LA MOCA’s finances and governance.

This moves the ball way down the field from previous reports (including my July 6 Fiscal Fizzle post) and gets the answers to some questions on which I was previously stonewalled: On July 2, two days after the close of the fiscal year, MOCA’s chief financial officer, Michael Harrison, had told me via e-mail that no projections could yet be provided on the operating results (surplus or deficit) for Fiscal 2012. Usually museums have a pretty good advance idea of whether the ink will be red or black, long before the books for the year are officially closed.

The Bloomberg sleuths managed to obtain the museum’s budget update from last Janaury, which predicted a $1.2-million deficit for fiscal 2012 (projected income: $15.5 million; expenses: $16.7 million). As I reported in my July 6 post, fiscal 2011 showed an operating surplus of $316,000 on a budget of $17.51 million. MOCA should now come forward with the final accounting for fiscal 2012.

Kazakina and Palmeri also report:

Billionaire philanthropist Eli Broad hasn’t made scheduled payments to [MOCA] because the institution has $2.1 million in grants it hasn’t put toward exhibitions [emphasis added]. “Once our unspent exhibition funds have been used, we will make additional payments,” said Karen Denne, spokeswoman for [Broad]….

$15 million of Broad’s pledge was to go toward exhibitions. The billionaire agreed to give $750,000 per quarter in 20 installments, according to the agreement. A January budget update obtained by Bloomberg said Broad hasn’t made the October and January payments.

This runs counter to what I was led to believe by MOCA’s Harrison in a July 2 e-mail responding to one of the questions I had sent him:

Has Broad made good on his pledge of $3 million annually, over a five-year
period, for exhibition support (and, if so, when will the last installment of this occur)?

I got a one-word answer to that query: Yes. I suppose it may be technically true that Broad “made good” on his side of the bargain. MOCA (by not fully using previous installments) seems to have failed to take full advantage of his offer.

Harrison never mentioned to me that some of Broad’s planned exhibition payments had not been made because MOCA had left money on the table. Similarly, as I reported in my above-linked “Fiscal Fizzle” post, MOCA, thus far, has also left on the table some $8.75 million from Broad’s matching endowment pledge of $15 million, due to insufficient fundraising from other benefactors to trigger the match. The benefits of the Broad Bailout are being woefully under-exploited.

It bears repeating that while MOCA director Jeffrey Deitch was brought in two years ago to be a game-changer at the moribund museum, the game that needed changing was the museum’s failed financial performance, not the its widely admired exhibition program.

Much has been said by Deitch’s apologists about the popular appeal of his exhibitions and the related attendance increase on his watch. But higher attendance accompanied by a diminution of quality, without commensurate net income improvement, means a reputational and financial hit that this fragile institution cannot afford.

It’s nice that MOCA has now reversed its previous decision not to fill the position of chief curator, vacated by the widely respected Paul Schimmel. But that doesn’t begin to address MOCA’s systemic dysfunctionality. If Charles Young’s letter (scroll down) wasn’t enough of a wake-up call to those still dreaming that MOCA can continue on its current course, today’s Bloomberg exposé of its finances should provide a coup-de-grâce jolt of reality.

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