Did the Getty get off easy?

THE CALIFORNIA attorney general’s investigation of the J. Paul Getty Trust concluded this week with not much more than an admonishment of the wealthy but beleaguered art institution for its financial misdeeds and misjudgments. Why was the Getty let off the hook with a slap on the wrist for the transgressions of its former president, Barry Munitz, and its trustees -- some of whom (including chairwoman Louise Bryson) still serve?

True, the Getty prudently preempted more serious punishment by instituting needed governance reforms before the attorney general could force it to do so. But the buzz about Atty. Gen. Bill Lockyer’s light touch has been so great that his spokesman, Tom Dresslar, felt compelled to rebut “the notion that the trust got off easy” even before the question was asked.

“They paid a price,” Dresslar said. “They were the subject of a critical report issued by the attorney general to the public. They will be subject for the first time in California history to continued oversight by an independent monitor [former Atty. Gen. John Van de Kamp].... The trust was made whole for improper expenditures.”

But was it?

The problem with the 12-page public summary of the attorney general’s findings is that there is no way of knowing. Dresslar declined to release the facts and figures on which the report’s conclusions are based, asserting that information acquired during the investigation is “exempt from public disclosure under the Public Records Act of California.” Similarly, the Getty’s vice president for communications, Ron Hartwig, told me that “the Getty will not be making public” more detailed information.

So we have to take on faith the attorney general’s justification for his restraint: that “the trust has been compensated for the losses” from improper expenditures, thanks to its monetary settlement with its former president. Munitz resigned in February amid a firestorm over his misuse of funds. He agreed to pay $250,000 to the trust and forfeited a severance package of more than $2 million.

But we have no way of doing the math to calculate whether the payment by Munitz did, in fact, provide adequate compensation, because the report gives no figures for his wrongful expenses. Among those listed in the report: travel expenses for his wife, excessive travel expenses for himself, using employees to run personal errands and paying fees to a graduate student/consultant who “did insufficient work ... to legitimately earn those fees.”

Even worse, the report supplies no data to support its conclusion that more serious -- and potentially far more costly -- alleged irregularities were undeserving of censure.

Take Munitz’s generous compensation: $962,526 in 2005. The report provides no figures to support the conclusion that it was reasonable compared to chief executives at other nonprofit charitable organizations. Indeed, a recent survey by the Chronicle of Philanthropy found that Munitz was the second-highest paid executive of any cultural nonprofit in the country.

Similarly, the report supplies no comparables to support its conclusion that the Getty’s $2-million sale in 2002 of a residential lot in Brentwood to businessman and collector Eli Broad was reasonable. It only quotes one unnamed “independent real estate appraisal expert” who “concluded the fair-market value of the property at the time was $1.8 million.” As the report notes, Broad is “allegedly a close friend and professional associate of Dr. Munitz.”

But by far the biggest expense that Munitz may have caused the trust is the $3 million paid to Deborah Gribbon, who resigned as director of the J. Paul Getty Museum in 2004 and received this monetary settlement. “At the time she resigned, Dr. Gribbon had a claim against the trust for unlawful ‘constructive discharge,’ as well as other potential employment-related claims,” according to the attorney general’s report. The exact nature of those claims has never been disclosed. But when I asked Dresslar if, as has been widely assumed, Munitz’s actions had led to Gribbon’s claims, the spokesman replied (inaccurately but revealingly), “I think we pretty much came out and said that in the report.” He added that Munitz had not been asked to compensate the trust for the Gribbon settlement because the expenditure was deemed a “proper” expense of the trust. Without it, he said, the Getty might have been subject to even greater expenses and damages, stemming from litigation.

The much-publicized personal friendship between Munitz and Lockyer made it all the more essential for the attorney general’s report to provide sufficient detail to instill confidence in its findings. With this report, and with the refusal by all parties to provide further details on its findings, it’s not just the Getty Trust that has shown disregard for its public trust, it’s also the California attorney general’s office.

The damage that this sorry episode inflicted on public confidence in the Getty and, by extension, all nonprofits is perhaps the biggest cost of the inadequate oversight by the Getty’s board of Munitz’s actions -- a loss for which there can never be adequate compensation.