Craig and Denise Dubow's signatures are visible on a Western Carolina University contract creating a scholarship fund restricted to children in three North Carolina counties. Paragraph IX requests that winners "send a letter of thanks to Mr. and Mrs. Craig A. Dubow."
Under pressure, Western Carolina University has now acknowledged that the Gannett Foundation quietly helped CEO Craig Dubow and his wife, Denise, establish a scholarship in their name -- with no credit to Gannett, and off-limits to most employees' children.The university, in Cullowhee, N.C., disclosed the foundation's role in the Craig A. and Denise W. Dubow Endowed Scholarship Fund yesterday, only after I filed an open-records request last week for any public documents that could explain the whereabouts of $40,000 Dubow funneled to WCU in 2007 and 2006.
The gifts were authorized under a benefit available only to Dubow (left) and a handful of other highly-paid current and former executives, several of whom have used foundation money to fund scholarships in their names, too. Dubow, 54, was paid $7.5 million in cash and stock last year. Much of that stock is now worthless; shares have plunged 79% from a year ago.There's nothing illegal here. But Dubow's actions, combined with the foundation's refusal to fully disclose them, show how brazenly Gannett pampers the top brass -- even as it slashed thousands of jobs, froze the pension plan, and imposed other harsh steps to restore prosperity. Only yesterday, Dubow warned: "Next year will continue to be difficult."
Connell's conflictFoundation Executive Director Tara Connell -- who also is Gannett's chief spokeswoman -- has not acknowledged any of my questions about the foundation for nearly three weeks. She is in a deeply conflicted position: Connell ultimately reports to Dubow; in addition to being Gannett CEO, he is the foundation's chairman, president, and one of its seven unpaid officers.
And until now, Clifton Metcalf, executive secretary of Western Carolina's fundraising arm, had refused to disclose anything about the $40,000, including whether it went to the Dubow fund. But in an e-mail yesterday, Metcalf wrote: "I have been authorized to confirm that The Craig A. and Denise W. Dubow Endowed Scholarship Fund has been created with the support of the Gannett Foundation, not the Gannett Co. Inc."
He did not detail that support. But the foundation's public tax returns for 2007 and 2006 show Dubow directed two $20,000 grants to the school for endowed scholarships. The documents do not mention the Dubows' fund, however. I examined the returns under federal open-records laws.
Also, with his reply, Metcalf attached scanned copies of an agreement the Dubows signed (inset, left), showing they created the fund in November 2005. Asked for the source of money to be deposited in the account, the five-page agreement says: "Donations by family and friends.'' The Gannett Foundation is not listed as a source.None of the documents explicitly reveal the whereabouts of the $40,000. Metcalf told me last week in a phone interview that WCU does not have any endowed scholarships named for the foundation or for Gannett, however. Big donors customarily get naming rights.
The Dubow fund is to hold more than $10,000, the documents say, and its endowment must exceed $20,000 before any scholarships are awarded. Finally, referring to scholarship winners, the document says:
"It is requested that the recipient send a letter of thanks to Mr. and Mrs. Craig A. Dubow, 7950 Jones Branch Drive address in McLean, Va.,'' Gannett's headquarters address.
Few rules for top brass
Last year alone, Dubow and 15 other current and former company executives directed $320,000 in foundation money to non-profit groups -- many of which would be off-limits to average employees and the public under foundation rules, public documents show. 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."
That rule reflects an important but unstated foundation goal: To generate favorable publicity that could make Gannett businesses like North Carolina's Asheville Citizen-Times more prosperous, thereby advancing the interests of the company's beleaguered stockholders.Dubow's gifts also wouldn't be allowed under a foundation rule that says: "The only scholarship program currently funded by the foundation is the Madelyn P. Jennings Scholarship Program for children of Gannett employees."
Yet, Jennings scholarships are scarce, the tax returns show. Last year, the foundation spent only $42,250 on the scholarships -- a total of 14, based on the award's current value -- for a company that employed 46,000 workers. The one-time grants are now worth $3,000 each.
Dubows exclude most employees
The foundation's stated mission is to help non-profit groups where Gannett owns a newspaper or TV station. The closest business to WCU is 53 miles away: the Asheville Citizen-Times. The paper is now losing about a third of its 240 employees to this month's mass layoff at Gannett's U.S. newspapers.
Asheville is in Buncombe County. Craig and Denise Dubow restrict their scholarships to students in nearby Macon, Transylvania, and Jackson counties. (See, map detail.)The Dubows' interest in WCU is unclear. Dubow's alma mater is the University of Texas at Austin; the foundation gave a combined $40,000 to that school in 2006 and 2005, tax returns show. But Jackson County property records also reveal that the Dubows own a $1.5 million, 4,144-square-foot country estate in the gated Trillium golf community in Cashiers, which may explain why they established the WCU fund.
Note: Gannett Blog readers who asked to remain anonymous provided important research for this post.
Gannett Blog readers react
Your responses to this latest Gannett Foundation development are pouring in:
- "If Dubow doesn’t offer his head for his deceitfulness with Gannett Foundation funds, a foundation whose funds come directly from employee pockets and Gannett, then the board of directors should take it,'' writes Anonymous@9:41 p.m. "At a minimum, the existing scholarship should be changed to reflect the role of the Gannett Foundation. And, Dubow, you may be within legal boundaries, but your actions here demonstrate why you do not deserve to lead this company."
- "There are very good people in Asheville whose children could use this scholarship,'' says Anonymous@12:04 p.m., "but instead he opts to deny them this when the hard work they do has allowed him to buy his vacation home there? . . . I absolutely just can't get over the nature of the pure coldheartedness and audacity of it during this time of pink slips -- and that's the real story here."
- "I am a very senior person at Gannett (although not senior enough to receive the GMC perks) and I have to say that Craig Dubow and Gracia Martore have both lost the confidence of this management team,'' says Anonymous@1:48 p.m. "This is appalling and Craig Dubow should just resign. He truly is an embarrassment to the company, the loyal employees and this management team."
- "So," says Anonymous@4:09 p.m., "what this breaks down to is we, the Gannett employees, sacrifice our health, sanity and economic future so Dubow can be a big man on a N.C. campus and play a free round of golf? Unbelievable."
- Documents reveal platinum benefit for elite executives
- Chief Financial Officer Gracia Martore steered $60,000 to her alma mater, Wellesley College. (More noteworthy examples.)
- Gannett sells paper after 36 years to help fund officers' gifts
- How to get and read a non-profit's public tax return
[Image: today's Citizen-Times, Newseum]
If Dubow doesn’t offer his head for his deceitfulness with Gannett Foundation funds – a foundation whose funds come directly from employee pockets and Gannett, then the board of directors should take it.
ReplyDeleteAt a minimum, the existing scholarship should be changed to reflect the role of the Gannett Foundation.
And, Dubow, you may be within legal boundaries, but your actions here demonstrate why you do not deserve to lead this company. Great job Jim, thanks.
Wow, Jim, you've got copies of signatures by Dubow and his wife. Why not have a handwriting analysis done to see what the handwriting discloses about their personalities.
ReplyDeleteThis has to be the lowest of lows this organization has reached. Putting your own brand on charitable donations, as if it were the exec. and his wife who was caught up in the idea of educating new generations. I actually find this creepy.
ReplyDeleteBut I still have a couple of hard questions. I doubt if we can find this out, but are the Dubows claiming this on their tax returns as a charitable deduction they made? And why is the scholarship only for people living in those three counties? Very peculiar. Why would they want to prohibit youngsters from elsewhere in North Carolina from participating?
I am sickened at the lack of class.
ReplyDeleteAbsolutely shameful. Now, if we could just figure out why in the world he would do it here, and why he would restrict it to those counties. Does WCU have to reveal who was awarded any of the monies?
ReplyDeleteAll this is making my head spin, Jim. Break it down for me.
ReplyDeleteGive me the bottom line. Are there any laws broken here? If not, did Dubow break the spirit of any ethics law?
There's so much legalese here that I get lost. Was Dubow trying to benefit from establishing such a fund? If he was trying to boost the Citizen-Times profile, why didn't anyone hear about this scholarship fund before you exposed it?
It's all seems very muddy. Please explain more clearly.
I am happy the university finally coughed up information that should have been publicly available from the get-go, without the letters, etc. Now you have broken the ground, it should be easier for reporters in the future to get these sort of documents.
ReplyDeleteI believe 10:02 raises a very interesting question. If the Dubows actually claimed this on their tax returns, wouldn't that be fraud?
ReplyDeleteI think Dubow owes us an answer. Did he and his wife claim this on their tax returns?
I am glad I am no longer a Gannett employee, and I can imagine how angry any Gannett employee with a college-age child and could NOT get a scholarship or grant from Gannett and then learned about this sleezy deal for Dew-bow (ha).
ReplyDeleteI would be outraged if I were an employee now.
This information MUST get out to all employees!
I wonder if any kids from the gated Trillium golf community in Jackson County received the "Dubow" scholarship.
ReplyDeleteWhy can't you all just leave me alone. I can't sleep at night with all the whispering voices.
ReplyDeleteHA HA! He's actually a turd! I knew it!
ReplyDeleteAsh: Thanks. I'm still editing that piece, as new information comes in. I'll keep trying to sharpen the focus. But I have to be accurate and fair, as I'm sure you understand.
ReplyDeleteThis contribution has to be one of the sleaziest forms of self-serving philanthropy I've seen in a long time. Forget about the morality of establishing a scholarship in your own name funded by a foundation you're a boardmember of. This guy can certainly afford an out of pocket donation. But maybe Mr. Dubow can be creative and bequeath some of his Gannett shares to Western Carolina or some charity. Not only could he get a write off for the donation, he could write off some of his tax losses (up to $3,000 a year). And if he needs advice, he can seek counsel with Larry Miller. Remember him? He's the retired CFO who has a consultant-for-life deal with Mother Gannett that pays him around $600,000 a year for part-time corporate advice. Shame on all of you corporate bigwigs who particpate in this self-serving practice. And the Foundation "board" for allowing it.
ReplyDeleteGraft in its purest form
ReplyDeleteI am embarrassed to say that I might not have filed an open-records request for this story, but for a Gannett Blog reader familiar with North Carolina public-records laws, and the university system.
ReplyDeleteAfter that reader contacted me, I dashed off an open-records letter to the university. This blog's readers often come up with the best things to write about.
Here's another tax question:
ReplyDeleteIf someone is given something by a foundation that benefits or "honors" him and not the foundation, wouldn't he have to claim that as income for tax purposes?
Way to dig Jim, and Gannettblog corresponsents!
I don't know if this is true for the entire company or just our group (yes, NJ), but any money left in the Flexible Spending Account at the end of the year that you don't spend on copays, eyeglasses, etc goes to the Gannett Foundation.
ReplyDeleteYou're welcome, WCU!
My son was a national merit scholar and applied for the Jennings scholarship. He didn't receive it, but now I am thinking that maybe we should all file lawsuits against Gannett.
ReplyDeleteThanks for this info, Jim. I am a recently laid off Gannettoid (who is, admittedly, very bitter with GCI) and I kind of love seeing that they suck as bad as I think they do. Cheers!
ReplyDeleteThis is why I donated $5 last week -- not all the pissing and moaning about long hours or mean bosses. Jim, keep up this kind of good investigative work, and I'm happy to honor your $5 donation request every quarter.
ReplyDeleteDubow is a sleezebag, and I'm sure that Martore has her share of closeted skeletons as well.
If Dubow didn't claim this on his own tax returns as a donation, perhaps the IRS would still be interested in the transactions.
ReplyDeleteI mean, here's the head of a foundation redirecting its funds to a fund of his own name at Western Carolina - and, of course, there's clearly some monetary value to that. And, those donations should be counted as income, going back to 2005.
If it's not in the IRS guidelines it sure as hell should be as this guy, and all those who are part and party to it, are slime.
Thanks for continuing to destroy what little credibility this industry as left by your actions Dubow.
This may be criminal fraud. Both the university and Dubow should have known better, if the check was written from the Foundation's books to the universities.
ReplyDeleteSomeone should make sure the district prosecutors there in NC are aware of your excellent investigative reporting.
Now, please also investigate the Jennings scholarship, with unusually -- perhaps uniquely -- early deadlines that make it inaccessible to most children of average Gannetteers. I don't think you've been reading the specs on it correctly: The February 2009 deadline isn't for 2009 graduates. It's for 2010 graduates, juniors, which is why it requires the PSAT and not SAT scores.
Only one of my three college-bound kids took the PSAT, and it was in the sophomore year. They hadn't even taken their most important classes to judge if they were college material.
Who bases a college scholarship on PSAT scores? Moreover, WHY does one base a scholarship on that? Are there so many applicants from kids of 43,000 employees that the Foundation needs a whole year more than any other scholarship program to evaluate their transcripts for college potential?
And where is the list of recipients, for any year? Not apparently published. Isn't one reason a company puts money aside for such things the publicity factor?
After missing the timing three times, I can't help but wonder how others who succeeded in meeting application qualifications while their kid was 14 or 15 were reminded of the ridiculous deadline.
The contract signature shows Craig and Denise directed the annual report and relevant documentations to them, personally, at their home and not to the Gannett Foundation or its auditors.
ReplyDeleteCriminal fraud investigation TK, I hope.
Follow the money. This is only half of the story. We know how much money was involved and after a level of obfuscation, the origin. Now, boys and girls, where the hell did it go? Because of the unusual circumstances - excluding a key county and being timed with the purchase of an exclusive home - I would call on the Dubows and Gannett to disclose the beneficiaries of this money. I would certainly hope it went to someone who truly needed it. Transparency baby. Transparency. And to Craig specifically, you mean with your millions and your scenic new home, you could not have endowed your own scholarship? The company had to do it for you? Help me out here Craig.
ReplyDeleteI guess the Gannett higher ups don't have to read and sign the company ethics policy every year.
ReplyDeleteI wonder if they have to submit their car insurance coverage certificate, or if they can fudge on that, too?
I don't know which is worse, knowing more about Gannett than ever before or back in the day, not knowing and not even being able to guess what "corporate" did.
I always presumed that it was a case of power and privilege, but likely this is just a drop in the bucket when it comes to company perqs.
As an employee with one in college and one about to start college, I am dismayed about the number of Jennings scholarships. If Gannett cared about their employees and employees' families, there'd be more Jennings scholarships offered.
ReplyDeleteWouldn't the Gannett Foundation be at fault here for "giving" money to a couple (the Dubows) rather than a not- for- profit?
ReplyDeleteWho at Gannett monitors this foundation's operations? In other words, who is ultimately responsible?
So, what's the next step, Jim?
Nero fiddles while Rome burns. When will these idiots learn that the best way to lead is by example. Times like this require leadership that inspires us as we prepare for a battle we may not win. We need salsa not milk toast. Unfortunately our leadership is too comfortable and too bland to lead us. What a shame.
ReplyDeleteI'm with the rest of the group that wants to follow the money. Can we get a list of recipients? How much of the application is public record?
ReplyDeleteHas anyone called the ethics hotline yet?
ReplyDeleteWho the hell cares? the money went to a school where the counties that are in the grant offered is a very low income area. Report on something that actually has done wrong doing. Kids get to go to college! enough there
ReplyDeleteSo, if Dubow heads up a company that can donate papers to a foundation, and then he also heads up a foundation that lets him use foundation money, isn't that a major conflict of interest by itself?
ReplyDelete10:55 The point you are missing is that there is one set of rules for "them" and another set of rules for "us". To be successful there should only be an "us".
ReplyDeleteDoesn't the Gannett Foundation solicit contributions from employees? It did when I worked for Gannett.
ReplyDeleteIn essence, they ask employees to contribute so that its executives can get personal credit (and possible tax breaks) for those said contributions.
That's where this thing gets really smarmy.
I think 9 am has a valid point, Jim!
ReplyDeleteCan you find out who actually HAS received these employee's children scholarships??? Gannett MUST provide a list, I assume.
Also, regarding the ethics "hotline" - I was told to not bother, that the information ALWAYS gotr back to the publisher and group publisher and there would be hell to pay.
That is what we were told in Wisconsin back in 2000 when we became part of gannett.
Don't bother complaining about anything.
11:20 am: The Gannett Foundation does not solicit money from the general public, which may lower barriers to misuse of money.
ReplyDeleteThis is what's called a "pass-through' foundation; it doesn't have a fixed endowment. When Corporate needs to make charitable contributions, it basically sells one of the company's newspapers: Gannett donates the paper to the foundation, takes a big income tax deduction, and then sells the paper for cash.
Bottom line: Dubow and the other officers fund their private charities by selling off Gannett's patrimony. Former GCI employees have seen their careers destroyed when the company sold them and their papers downriver to corporate chop shops. That's what happened last year to Gannett's paper in Marion, Ind. Please see this post: http://tinyurl.com/5x8tqr
10:55, you know it's not that simple.
ReplyDeleteSo far, we know there are ethical concerns -- and Jim is still getting the details. We're also rightfully asking questions to find out if there has been any fraud. How were the taxes filed on this "Dubow" transaction.
You're not concerned about that? Who are you, exactly, and why are you here?
If you don't care, then why don't you stop reading this blog? Why even bother to post here?
I actually think you do care, but you have a lot to lose. Keep reading. You might learn something.
Someone posted a comment earlier, saying that the Madelyn Jennings scholarship winners are listed once a year in the Gannetteer. I do not have copies of that in-house publication, and it's not online, so I can't search them.
ReplyDeleteThis is simply a way of life for these people..it's just like the GM CEO flying into Washington to beg for money on his corporate jet.
ReplyDeleteThere are very good people in Asheville whose children could use this scholarship, but instead he opts to deny them this when the hard work they do has allowed him to buy his vacation home there? I know the area very well and there are rough spots in those three counties, but there are also many, many high end areas. There are many employees and employees' children who attend WCU.
This guy really believes he's above it all. You would think he'd have the good sense to funnel money away from a GCI paper's locale, but that's just it -- it's not about sense, it's about this guy's brazen sense of entitlement.
I absolutely just can't get over the nature of the pure coldheartedness and audacity of it during this time of pink slips, and that's the real story here.
12:04 is so right.
ReplyDeleteAnd what is being done about it? Written about it?
Look at this month's AJR - it is almost as if there is no crisis in the print media today! The publication should be devoting page after page to this crisis, yet..... AJR and even Columbia J Review are in the pocket of Gannett or are afraid to offend them.
The state AP chapters are the same way - they fear Gannett corporate so they are reluctant to report the truth about Gannett.
And today's Newswatch??? Boring drivil/.
10:55, I hope you're not in the newsroom!
ReplyDeleteHey 10:55, that is what Jim is doing - reporting on 'wrong doing'.
ReplyDeleteP.S. Thanks for stopping by Craig!
Fantastic reportig Jim. Bravo. I am a very senior person at Gannett (although not senior enough to receive the GMC perks) and I have to say that Craig Dubow and Gracia Martore have both lost the confidence of this management team.
ReplyDeleteThis is appalling and Craig Dubow should just resign. He truly is an embarrassment to the company, the loyal employees and this management team.
Great work, Jim, but I think you overstepped in reporting your opinion as fact that "nothing is illegal." The facts aren't clear to me that it's not illegal.
ReplyDelete"Transparency" is the key word, and it's the reason this ought to be investigated by federal and local prosecutorial authorities.
Gannett Foundation is a nonprofit that by law must hold the documents proving the paper trail on that $40,000. If its documents don't show what students got the scholarships and for how much, it's no longer eligible for 501c tax-exempt status. Nonprofit status is not transferrable.
Gannett can't create its own law for itself in giving "quiet" bennies to top brass. The Foundation could lose its tax exemption and its officers held personally liable if they know this and fail to act.
Dubow uses his office address, true, but clearly the contract stipulates all documentations are to be given NOT to the Foundation but to individuals: him and his wife, who has no apparent legal obligation to Gannett or the Foundation. Her inclusion has legal ramifications.
The contract, according to what you've reported, gives the Foundation no legal authority to proof of the trail on Foundation money.
That's a problem. And, as someone said, the signators on that contract -- WCU and the Dubows -- knew it was a nonprofit's money in hand here, not "family and friends" of the Dubows. That's fraud, the way I see it.
Ultimately, aren't the foundation's board of directors responsible for these smarmy tricks to launder nonprofit money for personal use? As long as the Dubows get to decide what counties qualify and require recipients to thank them, personally, the foundation money is being used for personal gain ... and a full investigation may well reveal more lucrative personal gain, given the Dubow's vacation home there at coincidental timing.
ReplyDeletewhat a tempest in a teapo
ReplyDeleteJim,
ReplyDeleteFabulous job you've done on this. Dubow must be seething as Connell does the consoling.
Is there any news out there you can dig up on other GCI execs doing anything like this?
Bean Counter here: As long as the cash went directly from the Foundation to the school there is no fraud or tax problems. For Dubow there's no issue even though it honors him. This is no different from the IRS viewpoint then when there's a walk for cancer/aids/MS/March of Dimes etc and you donate in a participants name. The contribution is deductable for you because it went to an IRS approved non-profit or charity. Dubow has no tax liablility because he received no FINANCIAL benefit. This only gets into fraud if Dubow received the funds directly from the foundation. In that case the foundation violated the law because it gave funds to a non-approved individual. Dubow only gets in trouble if he takes a deduction he's not entitled to, i.e he claims the $40k deduction even though it wasn't his money. Let's be honest neither one of these happened. The Foundation donated directly to the school and there's no way in hell Dubow took the deduction because the corporate tax department which probably oversee's his return or does it for him wouldn't do something so obviously stupid and illegal because they as the preparer would also have liability.
ReplyDelete6:11 Mr. Bean Counter shouldn't you be giving financial advice to the 140 $50,000 per year employees that were laid off so that we could pay Debow $7 million?
ReplyDelete10:09 PM:
ReplyDeletewhy are you mad at the bean counter? All he did was help us non-bean counters out with the tax details.
6:11 Bean Counter, you profess to know a lot of detail about Dubow's and the Foundation's tax returns. Either you are the Gannett and/or Foundation and/or Dubow's accountant, or you're talking out of school and merely speculate about what might have been reported, same as any of us nonbean counters.
ReplyDeleteBut you still aren't a lawyer and have no business giving assurance everything is legally sound.
It may or may not be true no direct cash went into Dubow hands, but what is certain is Craig and Denise lied on the contract when they testified the money came from "family and friends." If it's all on the up and up, why wouldn't they have reported the money came from "the Gannett Foundation, Craig Dubow, director (or whatever his title there)"?
It's as simple as that. Any falsification in a legal contract calls for legal investigation.
Why do you suppose he did that? And what entitlement does Denise have to be a part of the contract?
12:22 am: You wrote: "what is certain is Craig and Denise lied on the contract when they testified the money came from 'family and friends.'"
ReplyDeleteThat is not necessarily the case. The Dubows could have established the scholarship fund with the expectation AT THE TIME that it would be funded by "family and friends.'' Later, they could have changed their mind, and allowed or encouraged the Gannett Foundation to make contributions.
In that case, the original contract remains accurate as to the circumstances at the time it was signed.
This is all fascinating, though I admit to still being a bit confused by it all. You're writing like an insider blogger (which you are, obviously) but if this were an actual newspaper piece, I suspect an editor would tell you that it needs some other sources for context.
ReplyDeleteYou're basically alleging that a non-profit foundation is channeling funds to certain key executives so that those execs can make themselves look good by establishing scholarships in their own names. These scholarships curiously don't bear the name of that foundation and don't appear to be restricted by the mission statement of the foundation (i.e. helping to promote Gannett in areas where it has newspapers, etc.). And you're alleging that this is a widespread practice at Gannett.
It's impressive stuff for a lone blogger. But I might suggest that you write the main story as if you were writing for a newspaper with readers who don't about the inner workings of Gannett. You've got lots of trees but I'm not sure I see the forest yet. Your piece begins with a photo of two signatures, but that's so specific a piece of the puzzle that it ends up being confusing. Big picture first, please.
How widespread is all this? You link to another post about the other 15 execs but I'd include all of that in your mainbar here, just for cohesion. Forget linking. You've got these pieces, now paste them all together.
Next, I'd like to see some thoughts from an IRS type about this practice. Is this SOP for foundations related to big corporations? Failing auto makers, even? Computer companies? Nike?
Also, you don't mention it, but I'd love to know how this compares to the goings on at the Freedom Forum, a country club of a retirement pasture where rules seem to be bent to an even greater extreme. Obviously the GF and the FF aren't the same anymore, but as Dan Fogleberg once wrote, "Twin Sons of Different Mothers." (Or maybe, Distant Sons of the Same Mother, I don't know.)
The FF's endowment has been cut to shreds, attendance is way off at the Newseum, they're desperate to host weddings now--did they really need a brand new museum just five years after they built the first one?--but I bet $10 that these kinds of perks have been continuing over there. After all, it was Al and Charles and co. who wrote the book on a lot of this stuff.
Okay, more questions. It isn't until the last graf that you mention what amounts to the 600 pound gorilla in the room. (Elephant? Gorilla? Never sure.) That is, why is Mr. Dubow giving this money to a a fairly small and obscure university, Western Carolina, when he's an alumni of a huge and fiercely proud university himself, the University of Texas. It seems to me that this is incredibly odd, like a CEO alum of Notre Dame who gives his money to a community college in Tallahassee. Why not the U of T???
Obviously, you're doing all of this investigating with the total transparency of the internet, so you forfeit any degree of surprise, but this seems to me the linchpin here. Why Western Carolina? Obviously it's not a Gannett area, so any hope of pretending this donated money could possibly benefit the company is lost. (In fact, the money is restricted to students in three specific counties. Weird.) What is Mr. Dubow hoping to achieve with this donation to this university in this region, where he happens to have a second home?
Perhaps the answer is, as Paul Newman says to Wilford Brimley in Absence of Malice, "They do good work." Meaning there's nothing to see here. Then again, one can't ignore the symbolism of Mark Felt's passing without uttering the phrase, "Follow the money."
Needless to say, you've done all the legwork and we're all just piling on with comments and questions. And the fact that I'm reading this at 2:43 in the morning means you got my attention. So, good work and I look forward to some more follow-ups.
Yeah, I don't really see that argument flying with prosecutors, given the dates and paper trail so far, Jim.
ReplyDeleteI think WCU is required to give public access to the scholarship's full books, including every check received and disbursed, under nonprofit tax law. How much, if any, of the Dubows' own money established it and supported it, and who have been the recipients and chosen by whom? If an independent panel doesn't choose recipients, investigators might consider RICO possibilities.
And this isn't 1950. It may not be irrelevant that an individual not apparently employed by Gannett -- Denise -- is getting benefit of GF money. Spousal laws go only so far. Everyone assumes they file a joint tax return, but I don't see that validated as fact. I don't see an issue with her name on the scholarship, but her signature on the legal documents could be a question if it was established with little or no Dubow money just to create a front for GF to dump cash for a hidden motive.
I would need to see the donor and recipient list before I would believe or disbelieve the validity of this money trail.
The fact Dubow is not the only top brass with this "benefit" also does not automatically conclude the mere existence of the benefit is legal. Gannett's tax lawyers apparently think so, but we have courts because lawyers don't all see the law the same way.
This version of money laundering for personal social benefit, if not more, needs further legal scrutiny.
I agree you overstepped in delaring that nothing illegal happened here. The prosecutor's office, after investigation, would be a privileged source for such a statement, and a grand or petit jury could conclude that as fact.
Having just re-read my post of 2:51 am, I want to make sure you understand that it was not a critique but a request for some clarity. I think you've done a great job.
ReplyDeleteAlso, re the legal debate. Whether there is actual financial misdirection involved here will be scrutinized by folks who know what they're talking about. (I'm not in that group when it comes to the law and foundations.)
But what is not in question is this: Just as the Big 3 automakers chose to fly to Washington in private jets, the Gannett Foundation seems to have no problem channeling funds to executives for pet projects in a time when--how do I say this correctly?--their industry is evaporating and their employees are being laid off left and right. So they deserve the same level of scorn that the auto execs got and Jim deserves the credit for bringing this to light.
10:43 and 2:51 am: Are you kiddin'? This is one of the best comments I've gotten all week! I need more critiques like this. Thank you, very much!
ReplyDelete"Next, I'd like to see some thoughts from an IRS type about this practice. Is this SOP for foundations related to big corporations? Failing auto makers, even? Computer companies? Nike?" wrote a previous poster.
ReplyDeleteI'd like to see some thoughts or opinions from someone famaliar with IRS foundation rules too. But, unlike the previous poster, I could care less if this is SOP in other corporations. If it's wrong, it's wrong---and comparing what Dubow did to others who might have done wrong is just looking for the greatest degree of wrongness IMHO.
I meant SOP in the bad way, like you, not as a means of excusing it.
ReplyDeleteI meant SOP in the bad way, like you. I didn't mean to imply that we should look the other way.
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