As Freedom Forum posted another $48M deficit, non-profit paid retired CEO Overby nearly $1M; new documents disclose a comical money trail

A just-opened Newsroom exhibit tied to a new comedy stretches the free press mission.

Four months ago, Freedom Forum CEO James Duff raised hope for long-needed financial reform at the troubled charitable foundation after years of overspending on construction and sky-high salaries under predecessor Charles "Peanut" Overby, the chief executive for more than two decades.

Duff

There were ample reasons to move quickly. Freedom Forum's money-losing Newseum about news history in Washington had gnawed away at the foundation's crucial income-generating endowment. That spurred deep program cuts -- and an occasionally antic search for more revenue, like the museum's just-opened exhibit promoting Paramount's sequel to Anchorman: The Legend of Ron Burgandy.

Duff was named CEO two years ago -- only the second in the non-profit's history after Overby eased into retirement (or so it seemed) at age 65. He and Al Neuharth had turned the original Gannett Foundation into a refashioned Freedom Forum when the legendary jet-setting chairman retired from the Gannett Co. media giant in 1989. The move has cost Gannett communities nationwide hundreds of millions in lost charitable support, however.

In July, after another round of job cuts, Duff told the Associated Press: "We’ve certainly worked on tightening up on expenditures. I think we’re making good progress. And certainly our numbers are very, very encouraging."

But now, newly released public documents show foundation finances grew even more precarious last year after Overby got a 55% pay raise and Neuharth's compensation hit a record high, jaw-dropping expenditures even for Freedom Forum.

For the seventh consecutive year, Freedom Forum racked up another, enormous deficit: $48 million, according to its annual Internal Revenue Service tax return. Total overspending has now reached $410 million during 2006-2012 alone, the period when the museum moved to new quarters costing nearly twice initial estimates.

By the end of last year, the endowment's value dropped to $351 million, a record low, according to an examination of hundreds of pages of tax returns. In 2000, before the museum buildup, it topped $914 million -- $1.2 billion in today's dollars.

Overby

A contributing factor comes as a surprise. Although Overby ostensibly retired in 2011, the foundation paid him $987,000 in 2012 as chairman of the namesake Overby Center for Southern Journalism & Politics at his Ole Miss University alma mater -- a position previously undisclosed in tax returns. Last year's pay was way up from $638,000 in 2011.

Overby's pay, which included $480,000 in deferred retirement benefits and a $207,000 expense account, was his third highest on record, exceeded only in 2005, when the foundation paid him $1.3 million, and just barely in 2008, when he got $991,000, according to tax returns.

By contrast, the Knight journalism foundation's highest-paid employee in 2012 was CEO Alberto Ibarguen, who got $742,000. With $2.1 billion in assets, Knight is three times bigger than Freedom Forum, even when real estate is included. The Miami-based charity donated $25 million to help open the museum's new home. Ibarguen is a former museum trustee. Knight is now represented on the board by former Gannett executive Michael Maness.

Overby's total: $9.2M
Last year, Overby was once more Freedom Forum's highest-paid employee, bringing to $9.2 million his total compensation since 2000, tax returns show. But he certainly wasn't the only Freedom Forum employee pulling down big bucks in 2012:

Neuharth was paid $602,000 as founder, the most he's ever received in a single year. It included a record $303,000 expense account. Neuharth died last spring at age 89.

Ken Paulson, former CEO of the foundation's First Amendment Center, also got $602,000 -- a record for him, too. That included a $367,000 salary plus $186,000 for his retirement account. In July, he became dean at the College of Mass Communications at Middle Tennessee State University. A former top USA Today editor, Paulson had once been a sure bet to replace Overby.

Finally, Duff earned $514,000, most of which was his $445,000 salary. To be sure, that was far less than in 2011, when he got $1.6 million, almost entirely in deferred retirement pay.

Those fat paydays were followed by another round of cost-cutting early this year. Duff slashed dozens of foundation and museum jobs, sources told me, hitting the First Amendment Center and Diversity Institute in Nashville especially hard. Freedom Forum also canceled the Crazy Horse Journalism Workshop, an annual event encouraging young Native Americans to enter the profession.

Whether Duff has made more progress stabilizing the foundation this year likely won't become clear until late 2014, when the foundation files its next tax return. I obtained a copy of the most recent one on Friday under open records law. They're the only comprehensive source of financial information non-profits are required to make public.

Neuharth

Neuharth's compensation and duties remain a mystery. Freedom Forum has repeatedly refused to detail his job responsibilities whenever I've asked. The tax return only says the late octogenarian media mogul averaged 40 hours a week in his role as founder -- an average $289 an hour.

His $303,000 expense account suggests he traveled a lot, two years after double knee replacement surgery left him riding an adult-sized tricycle near his seaside estate in Cocoa Beach, Fla. He died in April after sustaining injuries following a fall at home.

His 12-page will signed in 2009 included detailed plans for three memorial services, but no bequests to Freedom Forum or the museum. However, he did order their names chiseled on his headstone. And the Neuharth family is listed among donors of $100,000 or more to the museum.

Meet the boss: his daughter
Freedom Forum's latest deficit came during Neuharth daughter Jan Neuharth's first full year chairing the 11-member board of trustees. She replaced Overby. The foundation paid her $50,000 last year.

Jan Neuharth

There is considerable overlap between Freedom Forum's trustees and the museum's, which is a legally separate entity. Many are long-time close associates of Al Neuharth.

Duff is on both boards. So is Neuharth's Cocoa Beach attorney, Malcolm Kirschenbaum, and the former Gannett newspaper publisher Mike Coleman. One of the more high-profile trustees is PBS NewsHour co-anchor Judy Woodruff.

Over the years, Freedom Forum and the museum have become a popular way station to retirement for many other top Gannett executives, including Peter Prichard, chairman of the museum board and another editor of the paper Neuharth founded, USA Today. As a Freedom Forum trustee, Prichard was paid $44,000 last year.

That the foundation and museum have been run by former newspaper editors, rather than trained professionals with experience in the field, suggests a major reason why both entities have become such financial boondoggles.

Duff, 60, is an attorney who came to his job without any discernible experience in museum or foundation work. He was chief administrator of the sprawling U.S. court system, with 35,000 employees and a $7 billion budget. Before that, he was managing partner of the Washington office of Baker, Donelson, Bearman, Caldwell & Berkowitz.

The office, which did legal work for the foundation, was founded by Howard Baker Jr., former majority leader of the U.S. Senate for Tennessee. Freedom Forum's tax return says he's a trustee and secretary, but the foundation's website says only that he's trustee emeritus. Overby, Paulson and the foundation also have deep Tennessee ties.

Overby lives in upscale Franklin, Tenn., which draws country music stars from nearby Nashville. In addition to his Freedom Forum pay last year, he also earned $200,000 as a director at for-profit prison operator Corrections Corp. of America in Nashville. He's been on the board 12 years, piling up 89,000 CCA shares, mostly options, with a gross value of $3.2 million, according to U.S. Securities and Exchange Commission filings.

Screenshot from retirement video.

(In court, CCA is at odds with Freedom Forum's free press and free speech mission. It has unsuccessfully opposed Tennessee open-records laws, arguing it shouldn't be required to disclose public documents about lawsuits against the company. CCA is a major government contractor. Overby has contributed $25,000 to its political action committee since 2009, according to the non-partisan Center for Responsive Politics.)

From Franklin, it's a four-hour drive to the Ole Miss campus' Overby journalism center. The center got its name after Freedom Forum donated $5 million to the school, one of a slew of eyebrow-raising grants. It's unclear whether it will continue paying him a six-figure salary as the center's chairman. On his retirement as foundation CEO, the university hosted a testimonial dinner that included a breathtakingly hagiographic video called Charles Overby: A Journey of Courage. It describes the $450 million museum as his "bold idea."

$27 million for museum
Whatever Duff accomplishes in belt-tightening, he won't immediately escape Freedom Forum's biggest ongoing obligation: the museum, which had 374 employees and a $68 million budget last year. The foundation gave the museum $27 million vs. $30 million in 2011. Freedom Forum's total 2012 spending last year was $56 million vs. $55 million. It generated only $8 million in revenue, producing the enormous deficit. The largest operating expenditures were employee pensions, salaries and wages.

The museum has fought for a Washington audience where many must-see attractions are free. It charges $22 for adults, although tickets are sometimes discounted. Admission revenue has barely budged since it opened in 2008. Last year's $7 million was virtually unchanged from 2011.

Newseum's Washington exterior.

As with many cultural institutions, it derives most of its revenue from contributions, facilities rental and concessions: $13 million in 2012, according to the tax return.

Its collection is eclectic, reflecting the breadth of its First Amendment mission: three-ton chunks of the Berlin Wall, newspaper comics and cartoons, and perhaps its most visible exhibit, an online collection of newspaper front pages from around the world.

But as the news industry grows more diffuse in the Twitter age, the museum has stretched the bounds of what might advance the foundation's free press ideals. The newest display -- Anchorman: The Exhibit -- is as much a promotion for Paramount's latest comedy as it is about journalism. The museum says the exhibit explores sexism in 1970s newsrooms. Its perhaps unintentionally arch Twitter hashtag: #stayclassynewseum.

Presley got star treatment in 2010.

The exhibit includes props, costumes and footage from 2004's Anchorman: The Legend of Ron Burgundy, starring Will Ferrell. Organized with Paramount, it opened Thursday, ahead of Dec. 20's debut of the sequel Anchorman 2: The Legend Continues. The foundation's website features a trailer for the movie. Paramount didn't make any payments to the museum, according to The New York Times.

To be sure, the exhibit isn't the first devoted to an entertainer; in 2010 the subject was Tennessee's adopted son, Elvis Presley.

A $650 million start
Neuharth, after retiring as Gannett's controversial CEO and chairman, held onto the company's philanthropic arm and installed Overby as chief executive. Founder Frank E. Gannett originally established the Gannett Foundation in 1935 for the benefit of Red Cross chapters and other needy causes in communities where the newspaper publisher did business.

Frank Gannett

Neuharth pressured Gannett to buy back $650 million in company stock that was the entirety of the foundation's endowment, then gave it a new name and mission, transforming it into a global journalism charity.

But in 2000, he and Overby shifted gears, focusing the foundation's money on one project: the museum. A promoter of the First Amendment, the museum also was to be a lasting physical legacy of Neuharth's life and career. Housed in a mammoth 643,000-square foot complex on a $100 million Pennsylvania Avenue parcel in Washington, it also is home to Freedom Forum's headquarters.

Opened years late for a whopping $450 million -- nearly twice initial estimates -- the museum now accounts for virtually all the foundation's annual gifts to non-profits. It wasn't Freedom Forum's first experience with runaway construction spending, however.

In 1994, Overby negotiated a 17-page settlement with New York's attorney general when the foundation was still incorporated in New York. Overby and Neuharth agreed to curtail what the attorney general called excessive spending on Freedom Forum's first headquarters, such as a $40,000 desk for Neuharth's office. Its provisions effectively remained in force only three years, however.

Neuharth and the other trustees paid $175,000 in restitution to the foundation. He later called the payments "utter nonsense," made simply to avoid a costly court case, according to Editor & Publisher. "Darts and arrows like this go with the territory for any action-oriented organization," he said.

A "font-tastic" t-shirt.

Under the settlement, Neuharth gave the Gannett Foundation name back to the company, which launched a new one under the same name. It has never returned to its former financial clout. Its most recently released tax return, for 2011, says it made $5.4 million in grants. Administrative overhead totaled only $194,000, however.

Where the original Gannett foundation supported untold numbers of community groups, Freedom Forum is spending down its endowment while the museum's gift shop sells $20 gag t-shirts and bangle bracelets. The foundation's administrative costs hit $28 million last year -- not including another $28 million for the museum.

But what about Elmira?
The museum's website features a by-the-numbers breakdown of its operations, such as the weight in pounds of the artifacts moved in for the 2008 reopening (145,460), the height in feet of the building's tallest point (137) and the number of TV studios (2).

Here are some numbers for last year that didn't get mentioned:

• The museum's operating expenses: $185,850 per day.
• Admissions revenue: $19,672 per day.
• Foundation grants to the U.S. Equestrian Team (Jan Neuharth is a horse enthusiast): $1,000.
• Overby's compensation: $475 per hour.
• Grants to non-profit groups in Elmira, N.Y., where in 1906 Frank Gannett started his company: $0.

Related: Read and download Freedom Forum's 2012 tax return and the Newseum's. Plus: See this spreadsheet showing foundation financial data for 2000-2012. And: Can Ron Burgandy save the Newseum?

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.

Sponsors | $60, and a gift from Boom-Z-Boom

I'm happy to acknowledge a $60 gift I got today via snail mail from a reader in Washington, who said in a note: "Thanks for the good work and a good forum. Keep it up!"

With advertising, that brings my income so far this quarter to $634, as follows:

• Reader donations: $140
• Advertising: $494

I'm also belatedly acknowledging a very special donation: $300 from Naja Hara. Longtime Gannett Blog readers may know Hara as Boom-Z-Boom, the stage name she used when she was an exotic dancer in Rochester, N.Y. (On her website, you can read about her close relationship with Al Neuharth, the legendary Gannett chairman and CEO who died in April.)

Through her publicist, Hara told me: "It is my belief that Gannett Blog provides not only necessary information about Gannett Corp. activities but also provides a worthy platform for those individuals to air their grievances within that company. I believe that those who use this blog should appreciate it, as I do. Thank you for your hard work."

I'm trying to earn $4,000 quarterly, through donations of $5 per reader, plus advertising sales. Please use the "Donate" or "Subscribe" tools in the green rail, upper right. Or mail cash and checks payable to: Jim Hopkins, 584 Castro St. #823, San Francisco, Calif., 94114-2594.

Big Al | In death, he really did have it his way

The plan wasn't nearly as over-the-top as "Operation Serenade," the code name President Ronald Reagan's advance men used when they orchestrated his seven-day state funeral in 2004.

Still, Al Neuharth left nothing to chance for his own sendoff last month. Well before he died at 89 on April 19, following a fall at his seaside estate in Cocoa Beach, Fla., the retired Gannett chairman and CEO drafted the blueprint for his last hurrah, according to public documents released today.

First and foremost, there was to be no traditional funeral. "Instead," he directed in his Last Will and Testament, "I request three memorial celebrations of my life."

One was to be in Brevard County, Fla., preferably at Florida Today facilities. A second, at the headquarters of the Freedom Forum foundation and Newseum he launched in Washington. And the third at the University of South Dakota south of tiny Eureka, and the family plot where he asked to be buried under a headstone adorned with the logos of USA Today and other media companies he founded.

"Invitations, the program and all other aspects of the celebration shall be carried out as I have previously discussed in person and in writing," Neuharth said -- duties handed to associates including his long-time consigliere Charles "Peanut" Overby.

'I used to be Al Neuharth'
That program ultimately included a seven-minute video starring Neuharth himself. (Dressed in two of his signature colors, gray and orange, and pointing at the camera, he says: "Hi. In case you've already forgotten, I used to be Al Neuharth.")

Neuharth

And true to his gold-plated philosophy that "first class costs only a few dollars more," Neuharth said the sky was the limit in how much those three celebrations could cost.

Those wishes are perhaps the most interesting details -- save one other -- in the 12-page will, a copy of which I obtained this morning from the Brevard County clerk under Florida's open-records law. The document is a testament to a life and career that made him one of the last modern-day media moguls -- and a man with an obsessive attention to detail.

Signed Dec. 30, 2009, the will doesn't reveal dollar amounts of any specific bequests from an estate almost surely valued in the multimillions of dollars, amassed during his 26 years as a jet-setting GCI executive, ending with his retirement in 1989.

Instead, all his assets were folded into the Allen H. Neuharth Revocable Living Trust when he signed his will. He named his daughter Jan Neuharth and his long-time friend Malcolm Kirschembaum, a Cocoa Beach attorney, as personal representatives to handle his estate.

Echoes of Sinatra
The service at Freedom Forum was held May 15 before 500 friends, family members and other guests. Musical accompaniment, also presumably at his request, included the Frank Sinatra classic My Way. That song selection was hardly surprising: He and his buddies were Gannett's version of the rat pack, with Neuharth dressed in sharkskin suits in the Sinatra role.

His signature on the will.

During his heyday as GCI's chief executive, USA Today reported in his obituary, Neuharth "maintained sprawling suites at the Waldorf Towers in New York City and the Capital Hilton in Washington, and he traveled on a corporate jet with its own shower."

A Newseum report called the May 15 event "a unique send-off that ranked with the memorial services of Ford Motor Co. founder Henry Ford II and Pulitzer Prize-winning humor columnist Art Buchwald, two celebrations that Neuharth admired and cited as 'full of felicity.'" (Indeed, Buchwald announced his own death in a New York Times video.)

Burial followed three days later at South Dakota's Eureka Cemetery, alongside his parents, brother and sister-in-law. (In fact, the will indicates he was cremated.)

In all, his final passage at the top was a long, long way from his very modest childhood. Born March 22, 1924, Neuharth grew up in a German-speaking household in rural Eureka and Alpena. When Neuharth was only 2, his father died, leaving his mother Christina to raise him and his older brother Walter by washing dishes and taking in laundry. Her story would reverberate across GCI decades later in Neuharth's management style.

A missing name

Neuharth-Ozgo

The one other interesting detail I noticed in the will forms a sad coda to his life. In identifying his family members, he lists his third wife, Rachel Fornes, and their six adopted children; two grandchildren; and his first wife, Loretta Neuharth, and their two adult children: Jan and Dan.

But conspicuously absent is any reference to Rosamunda Neuharth-Ozgo, almost certainly ending her long quest for Neuharth to publicly recognize her as his daughter from a year-long affair she says he had in the early 1960s.

In that matter, Neuharth seems to have had his way, too.

Related: from Princess Diana to Michael Jackson, other wills of the rich and famous.

By the numbers | GCI's next CEO, through the ages

Gannett's workforce has gotten smaller and younger since 2006 as the company shed 20,000 employees, many in their 50s or older -- easy targets to save multimillions in payroll dollars.

But at the company's highest echelons, the workforce is no less gray. From the board of directors to the CEO and other officers, their average age in 2006 was 57. By last year, the average had hardly changed: 56, according to a review of regulatory filings.

Martore

Indeed, when directors promoted Gracia Martore to chief executive in October 2011, she was 60 years old -- and already within five years of mandatory CEO retirement age, in an industry roiled by far younger executives and entrepreneurs.

It's probably too soon for the board to disclose a CEO succession plan to shareholders. Nonetheless, it's worth noting that possible internal candidates to succeed Martore are now 55, 54, 50 and 48 years old.

As shareholders gather tomorrow for their annual meeting, here are some key numbers about age:

26

Average age of entrepreneurs funded by well-known Y Combinator business incubator

29

Facebook CEO Mark Zuckerberg (on his birthday next week)


30
Frank Gannett, when he founded the company

50
Martore's predecessor, Craig Dubow, when he became CEO

55

Average of Fortune 500 CEOs

56

Average of Gannett's current 27 officers and directors *

61

Martore

69

GCI's oldest board member, Duncan McFarland

89

Al Neuharth when he died late last month

107

Gannett Co. Inc.

* listed in the company's 2012 Annual Report

Related: the shareholder proxy report, with the main agenda for tomorrow's meeting

Big Al | In death, a businessman to the very end

[Neuharth's gravestone, which he erected prior to his death]

Former Gannett Chairman and CEO Al Neuharth, who died April 19 at age 89, will be buried in a public ceremony in his hometown on May 18 at South Dakota's Eureka Cemetery, alongside his parents, brother and sister-in-law.

His gravestone, which he bought and had placed alongside his family's graves, lists as his accomplishments the businesses he founded: USA Today, the Freedom Forum foundation, Florida Today in Brevard and the Newseum in Washington, according to the Aberdeen American News. He poked fun at himself by also engraving "SoDak Sports 1952 (failed 1954)," for his first media venture.

Neuharth was born in Eureka March 24, 1924, the youngest of two brothers.

Arrangements were made with Lien-Straub Funeral Chapel of Eureka.

[Photo: American News]

In Neuharth obituaries, a name hardly mentioned

Neuharth-Ozgo vs. Neuharth

It is Rosamunda Neuharth-Ozgo, and she told me her story late one spring afternoon in 2009, over coffee in a Washington-area restaurant. (Read the version she wrote herself.)

Today, of all days, her name and claim deserve to be mentioned prominently.

Bulletin: Neuharth is dead at 89, after fall at home

The newspaper Al Neuharth famously launched 30 years ago is now reporting that he died today as a result of injuries following a fall at his home in Cocoa Beach, Fla.

"Newsroom smart and board room savvy," USA Today reports, "Neuharth was audacious, flamboyant and a self-described 'dreamer and schemer.' He used all those talents, and a dose of Midwest charm and common sense, to help build Gannett into one of America's largest media companies."

Big Al | How Feinstein rolled out the red carpet

In a recent column, David Rossie, the retired associate editor of the Press & Sun-Bulletin in Binghamton, N.Y., recalls a hilarious task handed to him in 1984, when he was part of a Gannett team covering the Democratic National Convention in San Francisco's Moscone auditorium.

On Day One of the convention, a crisis occurred at Gannett HQ, when word came that a corporate plane carrying Gannett president Al Neuharth would be landing at the San Francisco airport, where civilian motor vehicles were prohibited on the tarmac.

A Gannett limo would not be able to pick up Neuharth as he alighted from the plane. He would have to walk to the terminal, like other mortals. Something had to be done. And it was. Deponent, who was hanging around doing nothing, was sent to the auditorium to seek out then-Mayor Diane Feinstein. His task: To ask that she intervene to allow a Gannett limo onto the tarmac to pick up the boss as he arrived.

The mayor obliged. I don’t know if Neuharth ever thanked her, but I became an instant fan and remain one.

Earlier: In Gannett jet use, a perk that's literally priceless.

Big Al | He may still be behind the wheel at 98

That's Al Neuharth, the retired CEO and USA Today founder.

Freedom Forum paid new CEO Duff $1.6M in 2011, documents show, amid signs of more fiscal distress

The financially troubled non-profit foundation paid CEO James Duff $1.6 million during his first four months on the job in 2011, a year when the Newseum's operator ran a $47 million deficit, newly released public documents show.

Duff

The disclosure comes with fresh warnings of financial trouble. Today, Freedom Forum laid off 20% of approximately 150 employees at the Washington museum and other programs financed by the foundation. These are just the latest cuts since the museum opened in new quarters in 2008 that cost nearly double the original $250 million construction estimate.

Foundation officials have not responded to my questions about the layoffs, which I confirmed through sources.

Even by the standards of his well-compensated predecessor, Duff's pay is a jaw dropper. Since 2000, when spending went into overdrive, the foundation never paid retired CEO Charles Overby that much in a single year.

Most of Duff's pay, $1.4 million, came as a contribution to his employee benefit plan. Just $182,000 was direct compensation, according to the foundation's 2011 IRS tax return, which I received from the organization under federal open records laws. It is the most recent return on file.

The return reveals a sixth consecutive year of staggering deficit spending, as Freedom Forum continued pumping money into the museum about news history that moved to its new home on Pennsylvania Avenue more than four years ago. The foundation is housed there as well.

Endowment plunges again
Combined, the foundation's annual deficits have now reached $361 million for 2006-2011 alone, tax returns show. To cover that, administrators have dipped into an endowment of stocks, bonds and other savings that should be Freedom Forum’s chief income source. As a result, the endowment's value plunged to $368 million by the end of 2011 vs. $706 million in 2006, according to the returns. (Read the foundation's full 52-page tax return for 2011.)

Neuharth

Freedom Forum is the original Gannett Foundation, renamed and given a new mission in 1991 under the leadership of retired Gannett Chairman and CEO Al Neuharth. Gannett launched a new foundation hewing to the original mission: supporting communities where the company does business. But its spending has never approached what it once was.

Duff, who is 58 years old, took over in the fall of 2011 when Overby retired as Freedom Forum's first chief executive. In his final year as CEO, the foundation paid Overby $638,000. That included $383,000 in salary, $131,000 for his benefit plan, and $125,000 in expenses.

It's unclear why Duff received such a large payment for only four months' work. Freedom Forum declined to answer any questions I posed about the tax return, including about Duff's compensation. Indeed, for five years now, foundation officials have turned aside all my questions other than to acknowledge receiving them.

In addition to leading Freedom Forum, Duff is CEO of the Newseum and the foundation’s Diversity Institute.

Overby

Pay beats Gates Foundation
The most Overby was ever paid in a single year was in 2005, when he got $1.3 million. That included a one-time $785,000 distribution from a supplemental retirement plan that had been discontinued, according to that year’s IRS tax return.

Duff’s $1.6 million dwarfed that of the CEO at one of the world’s biggest philanthropies: the Bill & Melinda Gates Foundation, with about $35 billion in total assets. Named for Microsoft’s co-founder, the Seattle-based foundation focused on health care paid chief executive Jeffrey Raikes $975,000 plus $80,000 in expenses in 2011, according to its IRS tax return.

To be sure, Duff and Overby weren't the only administrators paid richly by the foundation, which has a long-standing reputation as a haven for retired Gannett executives.

Neuharth, who is 88 years old, got $525,000 as the foundation's founder, roughly the same as the year before. That included a $225,000 salary and $290,000 for expenses. As in the past, the tax return said he worked an average 40 hours a week. It did not spell out his duties.

Ken Paulson, who was briefly in line to succeed Overby until a management shake-up two years ago, was paid $368,000 in salary and $118,000 in benefits and expenses as CEO of the First Amendment Center in Nashville. That was 10% less than in 2010. Paulson was USA Today's top editor before joining the foundation in 2008.

John Seigenthaler, founder of the First Amendment Center, got $200,000, plus another $93,000 for expenses and benefits. He is USAT's first editorial director and a former editor of The Tennessean in Nashville.

And John Quinn got $150,000, plus $121,000 for expenses, as advisor to the foundation. He leads a scholarship program for minority students financed by the foundation. Quinn was editor of USAT and retired as head of Gannett's News Department.

A financial black hole
Neuharth retained control of the original Gannett Foundation even after retiring from the media giant. He pressured Gannett to buy back some $650 million in company stock that was the entirety of the foundation's endowment, then gave it a new name and mission to transform it into a global journalism philanthropy.

Exterior of Newseum

But in 2000, he and Overby shifted gears, focusing the entire foundation's philanthropy on one project: the Newseum. As much as a promoter of the First Amendment, the museum is meant to be a lasting physical legacy of Neuharth's life and career.

Opened years late and at a cost of $450 million, the museum now accounts for virtually all the foundation's annual gifts to non-profits.

In 2011, the foundation gave $30 million to the museum out of a total $32 million in contributions. It spent another $23 million on expenses that included among the largest categories: salaries, wages and benefits ($7.2 million), professional fees ($5.5 million) and depreciation ($4.4 million).

Overall, spending dropped 17% from $66 million in 2010. And that lowered the annual deficit to $46.8 million from $55 million the year before.

But the endowment once more heaved. By 2011's end, the value of the foundation's stocks, bonds and other non-real estate assets fell 13% to $368 million. That was in a year when the overall stock market was unchanged, based on the widely followed S&P 500 index.

The endowment's present value isn't public; the 2012 tax return won't be filed until well into next year. (This spreadsheet shows selected financial data for Freedom Forum for 2000, plus 2006-2011.)

The Newseum has struggled to find its place in a city bursting with tourist attractions. Many of Washington's museums, such as the better-known Smithsonian, offer free admission. In contrast, the Newseum's regular adult tickets are $21.95. Admissions generated just $7.1 million in 2011 vs. $6.5 million the year before. Meanwhile, expenses totaled $71 million in 2011.

Still, it's not unusual for cultural institutions to get only a fraction of their revenue from admissions, relying instead on donations and fees as special event venues. For example, the Newseum has sold out its $100 admission packages for the Jan. 21 presidential inauguration parade, which will be staged outside along Pennsylvania Avenue.

A shift in fundraising
In a sign Duff is concerned about finances, the foundation in July hired a new senior vice president of development: Courtney Surls. She had been a development vice president at the University of Southern California, where she worked on the school's $6 billion fundraising campaign.

Today, my tipster tells me Surls has been given an aggressive fundraising target that, even if successful, won’t erase the deficit spending without further cutbacks in overhead. That includes today’s reported 20% workforce reduction.

When it opened, the museum alone had 300 workers. After a second layoff, in 2009, the figure had fallen to about 180. It is a legally separate entity from Freedom Forum, but there is considerable overlap between the museum's trustees and those overseeing the foundation. One of the most high-profile joint trustees is PBS correspondent Judy Woodruff.

Jan Neuharth

Since Duff's arrival, the foundation has shown little signs of governance reform. A year ago, the board of trustees elected Neuharth's daughter, Jan Neuharth, as chairman to replace Overby -- continuing her family's control over what's supposed to be a guardian of money for the broader public good. The insular 12-person board still includes Overby, plus Duff and several other long-time retainers of the elder Neuharth.

Jan Neuharth was paid $51,000 in 2011. She wasn't elected chairman until December of that year, so it's unclear whether any of her compensation reflected her expanded responsibilities.

Duff, a former attorney, came to Freedom Forum with little experience in philanthropy or museum administration. He had previously directed administrative operations for the U.S. federal courts from July 2006 until September 2011, when he took over as the Freedom Forum's CEO.

At the time, the foundation said in a news release that it conducted a nationwide search before choosing him. His qualifications appear to have been his role as legal counsel and secretary to Freedom Forum and the Newseum, when he was a partner at the Washington firm of Baker, Donelson, Bearman, Caldwell & Berkowitz.

The foundation's 2011 tax return doesn't identify its law firm. However, former U.S. Sen. Howard Baker, who is senior counsel at Baker Donelson, is Freedom Forum's secretary, according to the return.

It's noteworthy that, while Freedom Forum's overall spending fell in 2011, legal costs soared to $871,000 from $284,000 in 2010. No explanation was provided, however, and the foundation declined my request for more details.

Big Al | A financial disclosure you don't see here

Testing the bounds of journalism ethics, retired Gannett Chairman and CEO Al Neuharth praises one of his current employers in his weekly USA Today column this morning -- without disclosing that relationship. Freedom Forum and its Newseum have become "a favorite gathering place" in Washington, he says.

Last year, Freedom Forum paid Neuharth, 88, $225,000 in wages plus $286,003 for expenses -- more than in any other year since 2000, according to public IRS tax returns.

Freedom Forum is the original Gannett Foundation.

Related: Gannett's ethics policy. Plus: The newspaper division's policy.

USAT | Neuharth vs. Kramer on sports coverage

[Neuharth and Kramer]

"Some sports scribes have been around so long, they think they know better than managers or umpires or anyone else what calls should be made."

-- USA Today Founder Al Neuharth, writing this morning in his weekly USAT column about whether baseball journalists should vote Roger Clemens into the Hall of Fame following his court acquittal on lying to Congress.

"We’re hiring much more pronounced voices. We’re hiring people you want to listen to, whose take matters to you. It isn’t just about agate sports scores. It’s going to be about the story behind what’s going on in the event."

-- USAT Publisher Larry Kramer, speaking yesterday at the annual conference of the Media and Entertainment Analysts of New York. Listen to a replay of the event; Kramer's remarks start about 37 minutes into the presentation.

Earlier: My live-blog notes on the conference.

Big Al | When reader comments are really tricky

Some stories by and about Gannett executives pose especially thorny challenges when it comes to moderating reader comments. Invite readers to post their thoughts, and you've just created an opportunity to piss off the top brass.

One obvious solution came in 2008 at The Arizona Republic, when Sue Clark-Johnson retired as president of the newspaper division.

So, here we are today, and the Father's Day gift USA Today's editors almost certainly hope to get: an Al Neuharth column that doesn't mention the holiday.

Oh, well: better luck next year.

Big Al | Circulation? It's Mr. Schwarzenegger calling

[Targets: Schwarzenegger and Trump]

Once more threatening USA Today's fragile circulation, Founder Al Neuharth has dissed another celebrity. Friday, in his weekly USAT column, Neuharth mentioned Arnold Schwarzenegger's 2003 election as governor in a recall vote.

"Californians chose Schwarzenegger from among 135 candidates," he wrote. "Many, including his wife, Maria Shriver, later regretted that choice."

Earlier: Donald Trump cancels subscription after Neuharth column.

In new battle of the egos, it's Big Al vs. Big Hair

[Mogul mugs: Neuharth and Trump]

Retired Chairman and CEO Al Neuharth landed the first punch Friday in his weekly USA Today column. He even gave his opponent, real estate developer Donald Trump, a chance to hit back in the same column. The match so far:

Round 1

Neuharth, 88, wrote: "Trump is a smart guy in some ways. But he's a clown who loves doing or saying things, no matter how ridiculous they may be."

Trump, 65, replied: "I met Al Neuharth through George Steinbrenner, who felt sorry for Al after he left as head of his company. He sits pathetically watching the Yankee games alone. Al is an angry man who likes making up stories — and using me to stay relevant. I haven't spoken to him in years!"

Round 2

Today, Trump tweeted: "Just cancelled my subscription to @USATODAY. Boring newspaper with no mojo -- must be losing a fortune. Founder @AlNeuharth has always been a lightweight -- just like his paper."

Earlier: Big Al gives USAT publisher Hunke the big finger.

Big Al: two other women who could have run GCI

Neuharth

In his weekly USA Today column this morning, retired Chairman and CEO Al Neuharth identifies those two women, as he describes how Gannett's first female chief executive, Gracia Martore, "wowed" shareholders at Tuesday's annual meeting.

Earlier: How Neuharth's mother, Christina, shaped the company that became today's Gannett.

By the numbers | Hourly pay rates compared

A reader at one of Gannett’s Midwest newspapers sent me a copy of their pay stub this week, including a note about their low hourly rate that said: “I’m sure there are many worse!”

Indeed, given the size of the company’s workforce -- 31,000 employees -- there probably are a few who get paid less. But not many.

Following are gross hourly pay rates based on a 40-hour week, except where indicated; figures for the top brass are according to their 2011 compensation.

$13.50

per hour for that Midwest newspaper employee

$15.40 

Jim Hopkins, Gannett blogger *


$246
Al Neuharth, Freedom Forum founder **

$752 

David Payne, chief digital officer

$794 

Dave Lougee, broadcasting division president

$1,053 

Paul Saleh, chief financial officer

$1,317 

Bob Dickey, president of the U.S. newspaper division

$2,256

CEO Gracia Martore ***

$5,892 

Craig Dubow, retired chairman and CEO ****

* based on 20-hour week.
** wages and expenses for 2010.
*** Martore's hourly pay exceeded the Midwest employee's monthly pay ($2,160).
**** Although Dubow resigned Oct. 6, figure assumes he was paid for 52 weeks.

Note: federal minimum wage has been $7.25 an hour since 2009.

Related: this table shows 2011 pay for six-highest paid executives.

What's your hourly rate? 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.

[Image: a time clock]

Big Al | USAT fumbles on the one-yard editing line

In his $100,000-a-year-for-life column yesterday in USA Today, Founder Al Neuharth takes on the college football scandals at the University of Miami and Ohio State -- then squarely assigns responsibility.

Neuharth

"Whenever anything goes wrong at work or at play, the boss ultimately is to blame,'' he writes. "The boss at colleges or universities is the president. Not the athletic director or the coach."

At Miami, that would be Donna Shalala -- a fact Neuharth notes, even though he says it's "difficult," because he's known her personally for a long time. He then sums up her career in three sentences:

"Shalala has been Miami's boss since 2001. She came there after eight years in President Clinton's Cabinet as secretary of Health and Human Services. Her educational administrative credentials include heading Hunter College in New York and the University of Wisconsin."

But as Anonymous@10:21 p.m. asks: "Anyone guess what salient piece of information he chose to omit?"

Me thinks 10:21 is referring to the fact that Shalala was a member of Gannett's board of directors from 2001 until just four months ago.

Now, USAT is generally good at reporting Gannett's role in news stories. That's a step quality newspapers take to alert readers to possible conflicts of interest. As a reporter there, I once wrote about lax supervision by the board of directors at GlobalCrossing, the bankrupt telecommunications giant. Appropriately, the paper disclosed in the story that then-CEO Doug McCorkindale was one of those board members.

Neuharth's columns, however, have always appeared to get very light editing. Yesterday's was one of the more egregious examples.

Earlier: Shalala's statement on Miami's football scandal.

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.

Duff

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:

Overby

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.)

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.