More Questions Are Raised About Grammy Finances

Grammy chief C. Michael Greene faced intensifying questions Tuesday about his management of the organization that sponsors the prestigious music awards, as a prominent member of its board of trustees called for a review of the organization’s finances.

A representative of a leading nonprofit group in New York also demanded a fuller accounting of the finances of the National Academy of Recording Arts and Sciences, or NARAS, before she turns over $600,000 the group raised to bring the Grammy ceremony to New York this year.

The Times also learned that a former academy employee lodged a complaint this week with the Internal Revenue Service questioning the academy’s accounting practices. The former employee filed a report and was told that the complaint would be forwarded to the IRS Criminal Investigation Department.

An article in The Times on Sunday, based on federal income tax filings, court papers and other public documents in addition to extensive interviews with current and former NARAS employees, reported on a variety of controversies surrounding Greene’s management of the Santa Monica-based Grammy organization. The article noted that Greene’s salary of more than $757,000 exceeds that of many corporate executives and chiefs of other nonprofit, tax-exempt organizations.

It also disclosed that one of the recording academy’s philanthropic arms, MusiCares, has consistently spent less than 10% of its income on its principal charitable goal--providing emergency financial assistance to indigent, unemployed and infirm individuals in the music industry--while spending three to four times as much on overhead, fund-raising and other administrative costs.

Greene, preparing for this evening’s gala presentation of the 1998 Grammy awards in New York, could not be reached for comment Tuesday. He has denied any wrongdoing, and a spokesman for NARAS said the organization would be sending a letter pointing out a series of inaccuracies in The Times’ reporting. But by late Tuesday, The Times had received no such letter.

The trustee calling for the internal review of NARAS is William J. Ivey, who is the director of the Nashville-based Country Music Foundation and chairman-designate of the National Endowment for the Arts. Ivey, a trustee on the recording academy’s national board, said from Washington that he and other members of the board of the Nashville chapter intend to call for a review of the issues raised in the Times article.

“In the past, the Nashville trustees have played a leadership role in calling for investigations of allegations about the national office,” Ivey said in a phone interview Tuesday. “It is my assumption as a trustee that we will be getting together within a week in Nashville and are likely to take the lead in that kind of action again.”

Meanwhile, a representative of New York City Public-Private Initiative Inc., a nonprofit group of 85 business leaders who collected about $625,000 over the last year for the Grammy Host Committee, said she will send a letter to Greene demanding an accounting of where the money will be spent.

“The L.A. Times article that appeared on Sunday raised some concern regarding where the contributions raised by the host committee are actually going to go,” said Tamra Lhota, president of the organization. She said the host committee would expect the accounting to cover “where the funds being contributed by the host committee will be going and . . . what programs they will be utilized for. The host committee will also request an accounting for last year’s funds. In the event that we do not receive proper documentation from NARAS, I will take up the question with the board of directors as to whether to withhold the funds that we have raised.”

Greene was unavailable for comment Tuesday on Lhota’s and Ivey’s actions. Recording academy Chairman Phil Ramone, an independent record producer, did not respond to calls for comment.

In a statement the recording academy released Monday to other news organizations, NARAS contended that The Times misinterpreted MusiCares’ financial records. The statement said the article failed to consider MusiCares’ spending on such items as a health insurance program and on a “planned health-care facility.”

However, in an interview with The Times during the article’s preparation, Greene acknowledged that no national insurance program exists. “In terms of me being able to stand up and say we have a national insurance program, I haven’t been able to do that for two years now,” he said.

MusiCares and NARAS officials queried about the health-care facility project before the article’s publication said, moreover, that no plans, site, schedule or budget have been drawn up for any such facility, and no formal assessment of the need for it has been undertaken.