[Detail of scholarship contract; click on image for bigger view]
There are many reasons why CEO Craig Dubow might be unwilling to reveal how much Gannett Foundation money has been diverted to his family's private scholarship fund at a little-known North Carolina University. Here's a legal one.
The contract Dubow (left) and his wife signed to open the Craig A. and Denise W. Dubow Scholarship Fund three years ago says a new agreement must be submitted "if the information now provided changes in the future,'' public documents show.That contract says the source of money for the Dubow account will be "donations by family and friends.'' By Western Carolina's own recent admission, however, the Dubow scholarships were "created with the support of the Gannett Foundation.'' That appears to be a reference to $40,000 that Dubow steered to WCU in 2007 and 2006.
In other words, any foundation involvement as a source of funding could have invalidated that contract.
Asking GCI's board to act
For more than three weeks, Gannett and the foundation have been unwilling or unable to explain the whereabouts of the money. That is why I've asked the independent directors to conduct an inquiry into whether Dubow has violated Gannett's Ethics Policy, in his dual capacity as chief executive of the company and the foundation.
Any investigation by the board should address whether Dubow and the foundation's six other officers have met their fiduciary duties. That is a line of inquiry that could be of interest to enforcement authorities at the U.S. Securities and Exchange Commission.If Gannett continues stonewalling, there also is Michael Bonfoey, district attorney for Jackson County, N.C. That is home to Western Carolina, the Dubow scholarship account, and the Dubows' country retreat. Plus: New York Attorney General Andrew Cuomo, assuming the foundation is still incorporated in that state. Alternatively, there would be Virginia Attorney General Bob McDonnell.
Foundation officers, 2007
These were the officers -- all, senior Gannett employees -- when the foundation gave money to Western Carolina. Their names and titles at the foundation:
- Dubow: director, chairman, president
- Daniel S. Ehrman, vice president
- Gracia C. Martore, director/vice president
- Todd A. Mayman, secretary
- Michael A. Hart, treasurer
- Christopher W. Baldwin, assistant treasurer
- Tara J. Connell, executive director
Oklahoma and Virginia are the two states listed for foundation reporting on the 2006 tax form. Is it the same for 2007?
ReplyDeleteLooks like he and others on the GMC also violated several of the "rules" of the foundation... lifted from the GF website:
ReplyDeleteWhat we do not fund:
Like many donors, we receive many more requests than we can fund. As a result, grants will not be considered for the following purposes:
individuals
private foundations
organizations not determined by the IRS to be a tax-exempt public charity under §501(c)(3)
organizations classified by the IRS as 509(a)(3)
national or regional organizations unless their programs address specific local community needs
programs or initiatives where the primary purpose is the promotion of religious doctrine or tenets
elementary or secondary schools (except to provide special initiatives or programs not provided by regular school budgets)
political action or legislative advocacy groups
endowment funds
multiple-year pledge campaigns
medical or research organizations, including organizations funding single disease research
organizations located in or benefiting nations other than the US and its territories
fraternal groups, athletic teams, bands, veteran's organizations, volunteer firefighters or similar groups
12:37 pm: Where do you see Oklahoma and Virginia on the form?
ReplyDeleteOklahoma and Virginia are shown on the 2006 990, Part VII A, 8a.
ReplyDeleteVery interesting, 1:20 pm: The 2007 return lists Virginia and Indiana. I wonder what's going on?
ReplyDeleteMaybe Indiana is listed in 2006 because of the Marion paper deal. Did they give an Oklahoma paper to the foundation in 2006 maybe?
ReplyDeleteOops. I meant 2007 for the Indiana paper deal.
ReplyDelete1:44 pm: That's it! Gannett donated Oklahoma's Muskogee Phoenix to the foundation -- on April 3, 2006 -- then sold it downmarket about three weeks later for $24.5 million, the return shows, to privately held Community Newspaper Holdings of Birmingham, Ala.
ReplyDeleteI posted on that, here: http://tinyurl.com/8sl48r