Top officials of California’s oldest private children’s welfare agency have agreed to repay the organization $41,600 for pricey restaurant meals, hotel charges and attorneys fees, the state attorney general’s office announced Wednesday.
Under the agreement, James T. Spradley Jr. and two top aides of the Children’s Home Society (CHS) will repay the expenses without admitting guilt or losing their leadership posts at the century-old organization.
The Los Angeles-based agency, which provides foster care and adoption services, has 19 offices statewide, about 300 employees, a $16-million annual budget and a clientele of about 10,000 needy children.
The settlement marks the end of the state’s one-year investigation into reports by The Times that CHS officials engaged in questionable spending practices, including parties and meals for the staff at expensive restaurants.
Attorney Richard Simmons, who represents the agency, said its 21-member board continues to have complete confidence in Spradley, crediting him with the agency’s enormous success since he took over in 1985.
The Times reported in late 1992 that an internal audit of CHS found that Spradley and three aides spent $303,000 on meals, entertainment, travel and other expenses during a four-year period.
Spradley, who approved his own expense accounts, spent more than $155,000 for expenses, including the purchase of personal items ranging from tuxedo shoes to tennis balls and luggage, the audit found.
On 100 occasions, auditors said, he spent at least $100 on CHS staff and executives. This included a $483 tab at the Fleur de Lys restaurant in San Francisco for a staff party.
Deputy Atty. Gen. James Cordi said in an interview Wednesday that Spradley has agreed to repay the organization $15,247. Most of the amount, he said, represents restaurant bills, but it also includes about $2,000 in hotel charges in Los Angeles, where CHS already was renting an apartment for Spradley.
The expenses were incurred between 1988 and 1992, Cordi said. He declined to detail all the expenses covered by the settlement.
Spradley’s top aides, Anelia Nunez-Wells and Katherine Neworth, will repay meal charges of $3,461 and $1,667, respectively, Cordi said.
The three people also pledged to repay a portion of CHS’s legal fees incurred as a result of the attorney general’s investigation, or $21,252.
Spradley declined to comment, saying that the CHS board has directed him and his staff to refer all calls to Simmons.
Spradley is paid $244,000 a year in salary and benefits, up from $184,000 in 1991 and $92,000 in 1988, records show. In reviewing his compensation, the attorney general’s office concluded it was not excessive.
Under Spradley’s tenure, records show that by 1991 the agency bolstered its financial reserves from $3.8 million to $13 million and reduced its debt from $2.4 million to nothing.
Between 1989 and 1991, the agency cut back its program services from $16.6 million to $13.3 million. And a staff of 700 employees was trimmed to 300.
The agency’s funding comes from public service contracts, foundation grants, corporate gifts and individual donations. The backbone of the organization has been its statewide network of auxiliaries and thousands of volunteers who raise more than $1.5 million a year for CHS through bake sales, road races and other fund-raisers.
After reports of the agency’s spending in December, 1992, CHS sued its former controller, Mike Love, alleging that he breached his fiduciary trust by obtaining and disseminating “confidential financial and proprietary information” belonging to CHS. The suit was recently dropped.
At least half a dozen of the CHS’s 147 auxiliaries called for Spradley’s resignation or said they planned to withhold money from the group or suspend fund-raising events.
Also, three board members resigned after expressing concerns about Spradley and the board’s handling of allegations against him.
Simmons acknowledged some ordinary turnover among board members whose terms had expired but said that nobody resigned because of the Spradley allegations.
The agency, he said, “is obviously pleased to put this matter behind it.”