Monday, January 18, 2010

Documents reveal $1.4 million in special bonuses given to Freedom Forum and Newseum employees

[The Newseum opened in 2008 in Washington, D.C.]

The non-profit Freedom Forum foundation and its signature project, the Newseum in Washington, D.C., paid $1.4 million in bonuses to its top employees in 2008 -- a year when the foundation's endowment suffered multimillion-dollar losses, and the museum began a series of layoffs that extended through last year, newly released public documents show.

The bonuses included $375,000 to Freedom Forum Chairman and CEO Charles Overby (left), bringing his total 2008 pay to $991,044 in compensation and expenses, the documents show. The museum's then-president, Peter Prichard, got a $225,000 bonus; his total pay and expenses for the year were $665,927, the documents show.

The pay packages emerged in annual Internal Revenue Service tax reports for 2008, made public under IRS regulations. They are the most recent IRS reports filed by the two organizations, so do not include payments for last year. I received copies of the reports over the weekend after requesting them last week from Freedom Forum. (Download your own copies for free.)

The 2008 bonuses included amounts deferred from the previous five years that were "contingent upon successful completion" of the Washington complex that houses the Newseum, plus Freedom Forum's offices, an apartment building, a restaurant and other facilities on Pennsylvania Avenue, the documents show. For example, Overby got a $100,000 bonus "based on 2007 performance," plus $275,000 in contingent bonuses from 2002-2005, the documents show.

The non-profit journalism foundation was established in 1991 by former Gannett Chairman and CEO Al Neuharth, with $650 million in assets from the old Gannett Foundation. The foundation and the Newseum, a museum about news, are managed by Overby and a number of other former Gannett executives and employees.

The Newseum complex's projected cost started at $250 million. But it mushroomed quickly, ultimately costing $450 million by the time it opened in spring 2008 -- three years late, according to my review last year of Freedom Forum and Newseum documents and IRS reports. Since its opening, the Newseum has struggled to control expenses; layoffs and other measures have reduced staff by 23%.

My review last year showed the foundation had given at least $67,500 to an adoption agency in Cocoa Beach, Fla., started by Neuharth's wife. Those gifts were among hundreds of grants made in 2000-2007 to non-profit groups that seemed to share little in common with the foundation's mission to support free press and free speech. A similar pattern emerged in the 2008 documents.

The 2008 returns show that Neuharth, 85 (left), was paid $225,000 in compensation, and another $231,953 in unspecified expense reimbursements. He did not receive a bonus. Neuharth worked an average of 40 hours per week, and his title is listed simply as "founder,'' the documents show. With his 2008 pay, Freedom Forum has now paid Neuharth nearly $1.3 million in compensation and expenses since 2006 alone, public documents show.

I've asked a Freedom Forum spokesman to explain the criteria for the bonuses, as well as its board of trustees's role in their approval. I also asked about the duties Neuharth performed for his compensation.

Freedom Forum and the Newseum are legally separate entities, each with their own governing boards. (Here's the Newseum's board of trustees.) The two boards have considerable overlap, however, and both include many long-time Neuharth associates; one member is his daughter, Jan Neuharth.

Overby and Prichard, who retired last year, have been the highest-paid employees of the two organizations for several years. In 2007, when no bonuses were paid, Overby got $577,024, and Prichard got $397,690, that year's tax reports showed. Prichard was a former top editor of USA Today before joining Freedom Forum and the Newseum. He was replaced last year by Ken Paulson, who also was USA Today's top editor at the time.

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

24 comments:

  1. Seems fair.

    Newspapers will editorialize about the bonus tax, about Wall St. greed, and the like, but I guess it's okay to pay those kinds of salaries to guys that work at non-profits.

    No wonder Paulson left USA TODAY... he did it for the pay raise.

    ReplyDelete
  2. Noteworthy: reporting on nonprofit financials has been in the spotlight recently, thanks to The Smoking Gun's recent item about the Wyclef Jean Foundation's forms 990. Jim turned (some of) us on to the forms last year.

    ReplyDelete
  3. Here we go - no Gannett news so the blog turns to the FF whipping boy for something to write about. Keep those hits and minimum ad rates floating!

    I've cut back my visits here for two reasons: 1- there's nothing much to read; 2- no need to support the tiny ad rate base.

    ReplyDelete
  4. Well, this proves Jim is really back!
    Great stuff. Keep it up.

    ReplyDelete
  5. The Gannette culture: Do as we say, not as we do.

    ReplyDelete
  6. This posting is highly relevant because it shows the culture of privilege and greed that has infected Gannett's leadership for much of its history. Good job, Jim.

    ReplyDelete
  7. Anonymous "here we go" means the Gannett goons are back, trying to sabotage this site again. Jim, a blog is not journalism, it's okay to reject comments that are obviously from someone at the Newseum. And speaking of that terrible name, is it true they got the name Newseum by conducting a contest in a fourth grade class?

    ReplyDelete
  8. Great piece. Thanks.

    ReplyDelete
  9. hey, anonymous 12:42:

    nobody who ever worked for gannett or related entities ever thought management was smarter than a 5th grader, so why not let the 4th grade name the newseum?

    8- )

    ReplyDelete
  10. This detail didn't make it into the post, so I'm posting it here:

    CEO Charles Overby's 2008 compensation included $11,386.16 for "club dues," according to the Newseum's IRS report. The filing doesn't identify the club(s), however.

    ReplyDelete
  11. I'm the one that said "here we go" and I'm as far from being a goon as you can be. I resent the suggestion I am a goon from someone that obviously doesn't know jack shit. Just because I think talking about the FF, etc., is stupid doesn't make me a goon.

    ReplyDelete
  12. I don't work for Gannett nor do I know Jim. But this piece is spot-on. These bonus payments are appalling not just because of the layoffs and cuts the Newseum has experienced but also because it's a bomb and the blame rests solely on these people's shoulders. I work in a corporate executive position for another DC-HQed national news org and have dealings with the Newseum for a while. Let me note only a few problems:
    --it missed its supposed "final" opening day by at least a half-year. Its decision to be secret about this problem meant that they didn't let organizations - including journalism organizations - know that their events had to go elsewhere at the last minute. I was assisting with one such industry professional organization that was suddenly scrambling to find a new spot.
    --It has done nominal marketing at best. I know Newseum mgt will argue this point but where is promotion of ongoing events, special events, destination marketing? Visitors to DC barely know about it, while those of us in DC who should be a consistent recurring base of attendees have no motivation. Their big project? A series about the future of journalism, involving only people who have been in the field for decades who've shown little interest in the future. (That's not a shot against those 50 and beyond, a demo in which I'm a member, but those who aren't embracing or even aware of what's emerging.) This is laughable.
    --You want to hold an event at Newseum? You must use the in-house catering service to whom the Newseum executives gave exclusivity: Wolfgang Puck, one of the most expensive in the business. I wanted to host an after-hours event for our entire employee base in DC, as a thank-you, so they could enjoy the Newseum. I wanted to offer light refreshments. The WP proposed menu was ridiculous; even after asking them to severely cut back (and I'd let everyone know that I had to be cheap so we could hold the event), it was 3x what I was budgeted for. I'm not naive: I've done these events for more than 20 years for major media companies in NY and LA and know what's reasonable. When I asked the catering rep to be more helpful since we were talking about a media company with a tight budget, I got an eye roll (!) and told "it's Wolfgang Puck." Frankly, it shouldn't be.
    --Newseum is a non-profit. The fact that it made a donation to another non-profit is sketchy. The fact that that donation went to an organization that has nothing whatsoever to do with media and/or journalism - which most media organizations set as rule #1 for its philanthropic efforts - is a disgrace.
    I don't know much about FF, but the Newseum is a closure waiting to happen. Many museums are facing the padlock in the current economy and most of these are relevant but simply mismanaged. The Newseum should not expect that it has an open checkbook available from its legacy media company supporters, who will ultimately seek ROI on their contributions. The up and coming media companies - thanks to the focus of the Newseum - have no emotional connection to it. The blame lies with those who received these bonuses.

    ReplyDelete
  13. Slow day, Jim? Please don't tell us you returned to blogging to write this kind of nonsense. There was a time I supported your efforts and this blog, but that day has passed. For the sake of your remaining readers write something worth reading.

    ReplyDelete
  14. For what it's worth, 2:31 p.m., what Jim writes is compelling news that doesn't appear anywhere else. It's worth my time. Sorry you don't get into it.

    ReplyDelete
  15. Absolutely terrific reporting! You are really amazing.

    ReplyDelete
  16. I've never read this blog before and saw a reference to this article/blog in an email newsletter that I receive. I'm a former Gannett employee that left with no ill will towards their company and I still work in the industry.

    What is reported here is disgusting. The compensation is way out of line. Let's cut the staff and give ourselves a hefty bonus - really...

    Donating money to an adoption agency? Am I missing something - how does that have anything to do with furthering the future of journalism.

    What amazes me more, are the negative comments from people that I'm reading towards the person that wrote this. Maybe the guy has an axe to grind with Gannett and that's why you don't like him? I say don't shoot the messenger on this one. This is good reporting and a story that needs told. What is happening at the Newseum is just flat out wrong.

    ReplyDelete
  17. Jim, when you tried to reach the Execs for comment, what did they say?

    ReplyDelete
  18. I first began writing about the Freedom Forum's financial picture in April 2008 -- going on two years ago. After initially telling me that she would respond to my questions, the organization's spokeswoman has not responded once to any of my queries, other than to provide copies of its IRS reports. (These reports must be made available, under IRS rules.) I find this very strange, given that the non-profit foundation is devoted to protecting the First Amendment.

    ReplyDelete
  19. Did you try reaching them for comment on THIS article? If the spokeswoman did not respond, did you try contacting anyone else?

    ReplyDelete
  20. On your first question: Yes. Please re-read the post, and you'll see this, which was part of the original text:

    "I've asked a Freedom Forum spokesman to explain the criteria for the bonuses, as well as its board of trustees's role in their approval. I also asked about the duties Neuharth performed for his compensation."

    On your second question, I posed my questions to one media contact, who said he would forward them higher up, to the spokeswoman. I haven't heard back from either one. Based on my past experience, I did not and do not think they will respond.

    ReplyDelete
  21. Indeed, the closest that foundation spokeswoman Susan Bennett has come to responding to anything I've written was when she defended Freedom Forum gifts to an adoption agency started by Al Neuharth's wife. Her defense, that the gifts were "given in accordance with the law," came in remarks she made to the New York Post in January 2009.

    ReplyDelete
  22. As your time allows, please keep the blog going. It's a fine service. The Newseum is a mess, run by pastured former execs, certainly not museum professionals. While the top folks there sit at the trough, those who actually do the work get pay freezes and pink slips. Meanwhile, the mission of the museum gets lost, as exhibits celebrate the anniversary of Woodstock (huh?) and the 75th birthday of Elvis (what???). What does that have to do with the First Amendment and the practice of journalism? It's goofy and Disney-esque. In a highly competitive museum market along the Mall, this lack of professionalism coupled with the failure to maintain the vision of the institution will lead to further layoffs of the remaining smart folks and, eventually, the Newseum's demise. Such a shame. I wonder what the board of trustees is thinking right now.

    ReplyDelete
  23. Woodstock and Elvis share at least one thing in common: music, a subject of great interest to one of the Newseum's highest-ranking administrators.

    ReplyDelete

Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

Note: Only a member of this blog may post a comment.