Monday, June 06, 2011

In Freedom Forum's new CEO, a chance for better governance -- with a revamped board of trustees

Freedom Forum's announcement last week that it had hired a new CEO -- only the second in its 20-year history -- is a major milestone for an organization with deep ties to Gannett. James Duff, an attorney who runs the federal courts' administrative operations, starts this summer, according to the non-profit organization devoted to First Amendment issues.

Unfortunately, the foundation left many questions unanswered in its statement on Tuesday. They include the future composition of the governing board of trustees, and whether that body will be reformed to make the organization more accountable to the public -- and less to the whims of Founder Al Neuharth and his confidants.

Duff, 57, will succeed Charles Overby, the foundation's CEO since its start, Freedom Forum said; Overby turns 65 in September.

Neuharth, the retired Gannett chairman and CEO, launched the charity in 1991, using $650 million accumulated by the original Gannett Foundation over nearly six decades.

Freedom Forum is best known for operating the Newseum, a museum about news history in Washington that moved to new quarters in spring 2008, years late and $200 million over its initial $250 million construction budget. Annual spending by Freedom Forum and the museum has skyrocketed, contributing to $224 million in foundation overspending during 2007-2009 alone, further weakening its crucial income-producing endowment. That's drawn national attention.

Overby's future role?
Despite its stated free speech, free press mission, Freedom Forum has too often operated opaquely, failing to keep the public fully informed. For example:

Will Duff succeed Overby in all his roles? Overby is chairman of the foundation's nine-member board of trustees -- a key position, where he can set the agenda for the overall organization. The statement is silent on this question; it says only that Duff was appointed to be CEO and president of the foundation.

What's more, Overby is also chairman and CEO of the Newseum; it is a legally separate entity from Freedom Forum. The museum has its own 22-member board of trustees, although it gets most of its funding from the foundation.

Is Duff to succeed Overby in those important Newseum positions as well? Once more, the statement doesn't make that clear. Far more important, will Duff even get a seat on the two boards?

Will the foundation's board of trustees be replaced, and the number of seats increased? It now comprises just nine people, virtually all close friends of Neuharth's. (One of them is his daughter, Jan Neuharth.)

Club Cocoa Beach
The board's clubby composition creates the appearance, if not the fact, of a private Neuharth family foundation, rather than the public trust that laws mandate. Indeed, the foundation's giving in recent years has included more than $70,000 to an adoption agency controlled by Neuharth's wife in Cocoa Beach, Fla., near their oceanfront estate. What's more, Neuharth, 87, has continued to draw a paycheck for services the foundation refuses to detail. As founder, he got paid $216,094 in wages plus $262,235 for expenses in 2009, the most recent public IRS tax reports show.

The foundation's Duff statement quoted retired Freedom Forum president Peter Prichard, who led the search, as saying: "Our pool of candidates was exceptionally well-qualified. We considered nationally known journalists, journalism school deans, university presidents, law school deans, business leaders and prominent lawyers. We’re especially grateful that we were able to attract and to hire Jim, who is among the best of the best."

Prichard doesn't say whether any of those candidates, in turn, seriously considered the Freedom Forum job. Did they? Or was Prichard's statement suggesting the search was more competitive than it really was? Other questions:
  • Did Prichard and his professional headhunters at the Isaacson, Miller firm in Boston consider anyone with experience running a foundation?
  • Did they consider anyone with a background in museum administration?
  • Was Duff the foundation's first choice in this go-around? (He's actually the second CEO-in-waiting, following former USA Today Editor Ken Paulson's unexpected departure last August.)
  • How much will he be paid? Overby got $449,000 in wages, benefits and expenses in 2009.
To be sure, Duff isn't entirely a stranger to the foundation, to the museum -- or to politics, an arena Overby knows well. From 2000 to 2006, Duff was an attorney and board secretary for the foundation and its affiliates, while he was in private practice at Baker, Donelson, Bearman, Caldwell & Berkowitz. The Washington firm was founded by Howard Baker, the U.S. Senate's former majority leader, and Freedom Forum's current board secretary.

Newseum's exterior
Duff is now chief administrative officer of the U.S. court system. Since his appointment in 2006 by Supreme Court Chief Justice John Roberts, he has overseen the federal judiciary’s 35,000 employees and its $7 billion annual budget, the Freedom Forum statement says. From 1996 to 2000, Duff was administrative assistant to Chief Justice William Rehnquist and was his liaison with Congress, the executive branch, plus state and federal organizations. (Duff was so close to Rehnquist that he was one of eight pallbearers at the justice's 2005 funeral.)

A chance to make amends
In the months ahead, Duff will have his hands full. Freedom Forum's tax reports show the foundation has been burning through its endowment of stocks and other investments at an alarming rate. Despite a series of layoffs at the Newseum, plus other limited austerity measures, the foundation still serves as a haven for retired GCI executives.

The reconstituted Gannett Foundation never recovered from the loss of its $650 million endowment two decades ago. It had just $15 million in assets at the end of 2009, when its annual spending fell to only $4.1 million. The Neuharth-Overby stewardship of those assets forever deprived scores of communities of hundreds of millions of dollars in charitable support. Duff can't reverse that. But he can help make amends by saving what's left of Gannett's charitable treasure.


  1. Good piece. The Newseum is going through considerable turmoil, and chickens are coming home to roost.

  2. Used to work in that tomb of a building. If Duff's mandate is to save the Newseum, is there a possibility that the other Freedom Forum offices - First Amendment Center and Diversity Institute at Vanderbilt; the Neuharth Center in South Dakota and Big Al's Coco Beach "office" will be shuttered? Also, will the new guy change the Newseum's focus from journalism to include religion, etc. just to broaden appeal and get more paying customers? Washington Post story said attendance is up since last year, but how about actual revenue from ticket sales? They give a million discounts and freebies. And how about all of those $250,000 a year vice presidents, not to mention Paulson's big paycheck to hang out in Nashville. Gonna get ugly.

  3. A classic story, and victim of its own success. It is too wrapped up in the Gannett Co.'s defense of the First Amendment for other newspaper company endowments to want to be involved. They need to pump up endowments, but reporters generally don't have money and those that do prefer to leave it to a church because they need redemption. It is a sorry state for a museum, and the lavish expense account dinners at Wolfgang Puck's are causing big headaches. Good location, but really much too expensive and the building isn't an outstanding work of architectural art like the Canadian Embassy next door, and the Pei building across the street. The architect also made a big mistake replicating Soviet-style propaganda by printing the First Amenment on the front of the building in such big letters. More modesty would have been better.

  4. The only decent income they are getting is from ABC News, which uses space for "This Week, plus special events in which swells like Arianna Huffington and members of white shoe law firms and lobbyists can gaze at the capitol and sample Puck's treats. Hubris got to Big Al's Freedom Forum crowd. The place in Arlington was perfect...not like the middle of D.C., but manageable, both financially and as a museum. Right next to a metro stop. Now, they have the space, but are far behind in displays on the future of news. Media companies that helped the build the place are dead or diminished.

  5. outside of the historical significance, I am constantly amazed at the amount of coverage the freedom forum receives - it has NOTHING to do with Gannett. What is next, the issue of serving coke vs. pepsi? really, if the forum is about Gannett - cut the crap with the freedom forum. It has no bearing at all.

  6. 3:36 From the final paragraph of this post:

    "The reconstituted Gannett Foundation never recovered from the loss of its $650 million endowment two decades ago. It had just $15 million in assets at the end of 2009, when its annual spending fell to only $4.1 million. The Neuharth-Overby stewardship of those assets forever deprived scores of communities of hundreds of millions of dollars in charitable support."

  7. 3:36 If the FF has nothing to do with Gannett, then pls explain Paulson and Overby, and why Overby was invited by Gannett (along with Neuharth) to the Gridiron dinner? I know quite a number of unemployed Gannett execs who would like that sort of treatment and attention from their former employer.

  8. The museum in Arlington was small and quirky enough that it got tons of tourists. I know because I live near there and although it was really off the beaten tourist routes, they came in droves. They made the same mistake building the Crystal Towers. (p.s. that's why I see the connection still between the FF and Gannett).

  9. Amazing how these angels defending Gannett and the Freedom Forum and the independence thereof keep show up when Jim posts on these issues. Jim does most of his postings on what is happening at Gannett, and I think largely USA Today. But post something on the FF, and an angel appears within hours to remind us all that there is absolutely no connection between the two organizations. If that is indeed the case, and frankly I do not know, then why is anyone involved with the FF reading this somewhat obscure blog?

  10. The issue is no one under 40 cares about the FF. It's you dinosaurs that keep harping on it. Enough already, we don't care about it!!!!

  11. I don't know about the old gannett foundation but the newseum is a great place to visit. Also top notch conference center. They are still sitting on top of a billion dollars in assets, there is just a lot more long term debt sitting around. hardly dire straits in my view...

  12. 11:26 Those assets include a lot of real estate, though.


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