This is news to me:
“Without board approval, commissioned and installed a life-size mural depicting himself and now hung inside the Koret Foundation’s new headquarters in San Francisco at a cost to the Foundation of $80,000.”
I’ll tell you, this one allegation should prolly make you never even consider starting up any kind of foundation.
And what’s the response – a general denial about how all the charges are “bogus” and an ad hominem attack against the widow of Koret?
Spokesmodel Nate Ballard could try to explain the painting / mural – like he could say how it didn’t cost $80k or how it was authorized, but he chooses not to.
OK fine.
Hey is it “erratic” to want to invite non-poor non-Jewish Willie Brown in to the Koret Foundation? Probably. But there’s a lot of erraticism going on on these charitable boards – that’s no reason for a dismissal.
All right, have at it Koret Foundation. Let’s hope the fund will be in better shape and be used for better purposes after all this gets hashed out.
All the deets;
“Lawsuit Filed by Widow of Koret Foundation Founder Demands New Independent Board to Save Half-Billion Dollar Foundation from Spending Down Assets
SAN FRANCISCO, Oct. 8, 2014 /PRNewswire/ — The widow of Koret Foundation founder Joseph Koret has filed suit against Koret Foundation Board President Tad Taube, accusing him and the Foundation’s Board of Directors of conflicts of interest in funding pet projects that include conservative causes in the United States and charities in his native country of Poland.
The suit filed October 7, 2014 in San Francisco Superior Court by Mrs. Koret alleges that under Taube’s direction the board has ignored the priorities established by her late husband to help the poor and assist Jewish causes in the Bay Area and Israel.
Instead, her suit claims, the Koret board is using foundation funds to promote programs closely affiliated with individual board members and is purposely confusing the public by putting signage that prominently features Taube’s name alongside the Koret Foundation name on buildings and grants for which the Koret Foundation is the principal funder.
“Defendants’ duty of loyalty to the Foundation has been corrupted by these directors’ close affiliations with many of the Foundation’s recent grants, resulting in tens of millions of dollars distributed due to self-interest,” according to the lawsuit.
The suit demands the removal of board members Tad Taube and his longtime legal counsel Richard L. Greene of Greene Radovsky Maloney Share & Hennigh LLP; board member Anita Friedman, director of Jewish Family and Children’s Services; board member Richard Atkinson, former president of the University of California; board member Michael J. Boskin, Senior Fellow at the Hoover Institution; and board member Abraham D. Sofaer, Senior Fellow at the Hoover Institution. The suit calls for their replacement with the appointment of an independent board with a majority of Jewish directors.
“Taube says publicly that giving to the poor is ‘a bottomless pit.’ Instead he has led the Koret Foundation by focusing its giving to organizations identified with him, creating a corporate culture of directors who rubber stamp his decisions as long as their favored organizations are also supported. “In elevating their own and affiliated interests while ostensibly making decisions for the Koret Foundation, defendants are breaching duties of loyalty that require them to serve faithfully the interests of the Koret Foundation” the lawsuit claims.
“Alleviating suffering and misfortune were my husband’s top priorities,” said Mrs. Koret. “Joe and Stephanie’s money shouldn’t be used for Tad Taube’s pet projects in Poland or to help conservative economic and policy think tanks–not when so many in the Bay Area go to bed hungry every night and Jewish causes need support.”
Supporting her lawsuit is Joe and Stephanie Koret’s closest surviving family member, nephew Merv Brown of Walnut Creek, who worked with the Korets for decades. He said about the suit:
“With all respect to Mr. Taube, if he wants to spend money on Poland, he should use his own money–not my uncle’s and my aunt’s–to assist his homeland. I am proud to stand with Susan Koret to support and endorse the directions and wishes of my family that their fortune be spent as Uncle Joe wished: to help the poor and Jews in Israel and the Bay Area.”
Mrs. Koret’s lawsuit also alleges that others, including “philanthropic civic leaders and former and current staff members will support Mrs. Koret in her efforts to restore the Koret Foundation’s purpose and dignity free of the control of Mr. Taube.”
The lawsuit claims that, at Taube’s direction, the Koret Foundation has donated approximately $9 million to the Museum of the History of Polish Jews in Warsaw, a pet project of Taube, who was born in Poland. “While the Polish Museum commemorates significant Jewish history, the diversion of Koret funds to Poland is not in keeping with my husband’s charitable mission…and in effect drains funds that could benefit the needy in communities in the Bay Area and Israel,” the lawsuit states.
Mrs. Koret noted her husband was a native of Odessa, Russia, who immigrated to America, struggled growing up poor in the U.S., and then struck it rich later in life in clothing and real estate. He was deeply committed to humanitarian causes such as alleviating hunger, and would “be deeply angered and offended by Tad Taube and the board’s strong support of conservative causes and grants that divert money needed for the local community and Jewish causes.”
The lawsuit asks the court to prevent the spending down of the Foundation’s assets by Taube and the board members with whom he has surrounded himself and allow the appointment of a new, independent board to carry out its mission and save the Foundation.
Mrs. Koret was named a lifetime director and chairwoman of the Foundation prior to her husband’s death in 1982. She was entrusted by her late husband to carry out the family legacy of caring for the poor and supporting Jewish and community causes through the Koret Foundation, according to the lawsuit.
The lawsuit also recites that the board has rejected a series of Asian and African-American candidates for board membership, including their rejection last month of former Mayor Willie Brown as president of the Foundation.
Mrs. Koret said she has been marginalized as Taube, a Silicon Valley real estate investor, and his hand-picked supporters on the board steer donations toward causes in which they have affiliations.
Mrs. Koret said she filed the suit as a last resort after her efforts to diversify the board, get independent legal advice, confirm the perpetual nature of the Foundation and redirect funds back to her late husband’s mission were rebuffed. She fears the Koret Foundation is facing destruction of its mission and eventual collapse unless changes are made.
She said in the last 12 months, Taube has undertaken three major real estate transactions: the sale of the Foundation’s largest real estate asset; marketing of another Foundation property; and refinancing a significant loan on a third Foundation property. The collective value of the real estate involved in these transactions is several hundred million dollars, according to the lawsuit.
“Over Mrs. Koret’s objections, defendants approved engaging a broker associated with defendant Taube’s real estate businesses to sell, market and refinance the Foundation’s properties and split its commission with Taube Investments, without disclosing the percentage commission split. This conduct violates state and federal law and is breach of fiduciary duty,” the lawsuit states.
The Foundation’s general counsel and Taube attorney Richard L. Greene, over Mrs. Koret’s objection, failed to advise that an independent appraisal or broker was needed to market the Foundation property and refinance the loan, even though the same broker associated with Taube’s businesses was engaged for both these real estate transactions, according to the suit.
“Greene’s conduct … may expose the Foundation to claims of self-dealing, is contrary to California professional rules for attorneys in avoiding conflicts of interest, and causes economic injury to the Foundation,” the lawsuit states.
The lawsuit alleges that Taube is a shameless self-promoter who has personally selected board members to rubber stamp his decisions in exchange for support of their own pet projects. Additionally, the suit says Taube established his own foundation, called Taube Philanthropies, but uses money and staff from the Koret Foundation to pay for and enhance joint projects of Taube Philanthropies and the Koret Foundation. A review of the Koret Foundation’s public filings shows reported annual salaries and compensation of officers exceeded $1.9 million in 2011, while Taube Philanthropies showed no such expenses for the same period, according to the lawsuit.
Mrs. Koret’s lawsuit charges that out of the $64 million gifted by the Koret Foundation between 2010 and 2012, nearly 60 percent was spent on causes outside the stated mission of her husband, the late Joseph Koret.
The lawsuit claims conflicts of interest, self-dealing, and breaches of duty abounds on the board:
The Koret Foundation’s Executive Director Jeffrey Farber provides no independent management, reaps a large salary and perks at the Foundation, has little involvement in grant-making and does only what Taube asks him to do. Farber is also a member of the Taube Philanthropies board, creating a serious conflict of loyalty and duty.
Koret Board Member Anita Friedman, director of Jewish Family and Children’s Services, sits on the Taube Philanthropies board as a director. Friedman makes up to $380,000 per year as executive director of JFCS, which is a major recipient of Koret funds. During September’s Koret Foundation meeting, she oversaw and participated in a vote granting $1.2 million to the Shalom Hartman Institute, where she also sits on the board.
While JFCS and Shalom Hartman are worthwhile causes, Friedman has failed to recuse herself in any discussions of massive grants to entities where she is on the board or employed. Friedman sees no conflict in directing millions in additional funds to entities where she has other interests and has no inclination to resign her JFCS position. Friedman has voted against every initiative by Mrs. Koret over the past two years seeking to bring independence, balance and transparency to the Koret board.
Michael J. Boskin is a Senior Fellow at the Hoover Institution, which has received millions from the Koret Foundation over the years. Earlier this month, the board approved another $280,000 grant to the Stanford Institute for Economic Policy Research where Boskin is also a Senior Fellow and former director. Since 1992, Koret has approved grants totaling $4.5 million to support SIEPR, and millions to Hoover through Stanford.
Abraham Sofaer is another interlocking director on the board of Taube Philanthropies, and is also a Senior Fellow Emeritus at the Hoover Institution, based at Stanford University. From 2010-2012, the Koret Foundation’s funding to Hoover and Stanford of nearly $4 million was about equal to its total support of all social welfare causes in the Bay Area combined.
In the lawsuit, Taube, a member of the Board of Overseers and the Executive Committee of the Hoover Institution, is alleged to have misused Foundation money to pay consultants to write editorials opposing Obama administration policies and to attend trips in support of Hoover.
The lawsuit also alleges that Taube:
Reduced funds targeted for Koret Foundation grantees and increased funds to organizations that are his personal favorites.
Used Koret funds to pay millions of dollars to entities affiliated with him or his close associates to manage the Foundation’s real estate holdings.
Without board approval, commissioned and installed a life-size mural depicting himself and now hung inside the Koret Foundation’s new headquarters in San Francisco at a cost to the Foundation of $80,000.
Paid more than $75,000 in Foundation money for promotional materials about himself, including booklets and newspaper advertisements.
Subsidized the operating costs of Taube Philanthropies by using Koret staff and resources for joint grant projects, and used Koret Foundation resources for travel, marketing and personal expenses.
Terminated a $35,000 contract of an independent publisher of a book about the life of Joseph and Stephanie Koret, the founder’s first wife. Taube was reportedly angry that the book was not about him or his contributions.
Along with counsel and board member Richard L. Greene, discriminated against and ridiculed Mrs. Koret and prevented her from speaking with Foundation staff.
Mrs. Koret in her lawsuit pledges to maintain the priorities of her husband by broadening the Koret board to include community leaders while maintaining a majority of Jewish directors. She is committed to maintaining support for the anchor institutions in the Bay Area that Koret has supported over many years and to prevent any continued diversion of funds to out of mission organization and countries.