Friday, December 12, 2008

Money trail: N.C. school officials decline to reveal whereabouts of $40K in Gannett Foundation gifts

Gannett CEO Craig Dubow recommended the company's charitable arm give the money in 2007 and 2006 to Western Carolina University for endowed scholarships, public documents show.

Now, nearly two weeks after I first raised questions about the $40,000's disposition, a senior WCU official has acknowledged that the public school doesn't have a scholarship fund named for the Gannett Foundation. Clifton Metcalf, the university's vice chancellor for advancement and external affairs, also concedes that WCU offers student scholarships named for Dubow and his wife Denise. In a telephone interview, however, he refused to say whether the foundation money went to the fund honoring the Dubows, citing university policy on privacy of financial records.

The foundation's public income tax returns show that the gifts -- two $20,000 grants -- were given for endowed scholarships at WCU. (The school, in Cullowhee, N.C., has 9,000 students, and is part of the taxpayer-supported University of North Carolina system.)

I examined the foundation's newly filed 2007 return late last month under federal open-records laws. Last year's grant came while Dubow urged fiscal discipline and shared sacrifice, as revenue and earnings began a steep slide, prompting layoffs that have now cost employees thousands of jobs.

Elite executive benefit
Dubow (left) earmarked the $40,000 under a special perquisite for select Gannett executives. Under that perq, the foundation imposes fewer restrictions on donation requests from top management compared to requests from average employees and the public. For example, rules applying to regular employees and the public say: "In any public acknowledgment or signage, be sure to note that this grant is from the Gannett Foundation."

Last year's WCU grant was among $320,000 awarded to charities recommended by Dubow and 15 current and former Gannett executives -- including some of the highest-paid brass, my analysis of the tax return found. The 2007 grants were on top of $724,000 the foundation gave in 2004-2006 to charities favored by executives.

Now, to reiterate what I wrote before, the Dubows may very well have established and paid for their scholarship fund with their own money. In fact, the 2007 tax return shows the Gannett Foundation matched an unidentified employee's $10,000 gift under the GannettMatch benefit. That could have been Dubow, ponying up for his own fund.

So, where's the $40,000?
Trying to answer that question, I e-mailed the foundation's executive director, Tara Connell (she's also Gannett's official spokeswoman) on Wednesday. I posed these questions:
  • Did the $40,000 go to the Craig and Denise Dubow scholarship fund, which is listed on this WCU page?
  • If not, which endowed scholarship fund or funds received the $40,000?
  • How did these $40,000 in grants advance the interests of Gannett's shareholders?
This is the second time I've asked Connell these three questions; the first time was Nov. 29. As I post this, I have not received any replies.

Earlier: Documents reveal platinum benefit for top executives. Plus: other noteworthy exec grants, and: Gannett sells Indiana newspaper to fund foundation projects.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.


  1. Way to follow up, Jim.

  2. Where are the comments now about having nothing to read on Jim's blog? Still think he's finished?

  3. You are on the trail of something really big here. I thought there were rules prohibiting foundations from using their funds in this way.

  4. Good stuff, Jim. Stay with it. Some may call this "perqs" but in this case, if it is as it appears, it's just plain "wrong."

  5. Jim, KNOWING, what I know about how this GCI operate, something sounds wrongs here> I would suggest that you go to the FED's and tell then> Their needs to be some kinds of criminal investigation into this?

  6. Excellent work, Jim. Thanks.

    Also, didn't you report earlier this year on other questionable uses of Foundation grants?

    Wasn't there something about grants going to executives' pet projects?

    It would be interesting to see if this fits the pattern.

  7. It may be legal, but it's damnfucking sleazy.

    It's also a reminder of how CHEAP Gannett is. With the millions Craig's hauling down, he can't afford to spend some of his own cash on philanthropic efforts? He's got to take the company's money? These assholes are shameless.

    I hope one of the directors asks Dubow what the hell kind of game he's playing. We're in amateur hour here! It's like the guy in charge of bingo night out at the Legion post being hired to oversee finances at the Department of Defense.

    Excellent, excellent work, Jim. Thanks for keeping us up-to-date.

  8. "How did these $40,000 in grants advance the interests of Gannett's shareholders?"

    Probably less than my $40,000 salary did after I was laid off...

  9. Actions speak louder than words and if Dubow and others within Gannett's leadership behave this way, one wonders how many other decisions they make that clearly border ethical boundaries.

    Very slimy indeed. Perhaps the WSJ will pickup on this given the attention they just bestowed on this blog for Jim’s efforts in outing Detroit’s plans.

  10. If I gave $40,000 to a college on behalf of my company's foundation, I'd want to make damn well sure the company's name--not mine--- got plastered all over everything. Isn't that kind of the purpose of foundation gifts?

    This is unbelievable. Stay on this one, Jim. I think this just might be the beginning of something huge.

  11. Jim,
    Please investigate Dubow's second home in Cashiers. I think there is a connection between his house and the college he donated towards.

    You are onto something. Usually people give amounts to schools they (or family members) attended. Did he go to this school? Why the big grant?


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