A matter of trust
THE J. PAUL GETTY TRUST hired a new museum director on Monday, hoping to open a new chapter in the museum’s 52-year history.
But it will be tough for the incoming executive, 47-year-old Michael Brand, to make a fresh start as long as allegations of lavish spending and questionable dealings by Getty officials hang like a dark cloud over the hilltop campus. Those reports have not only damaged the Getty’s image but also increased the public’s skepticism about nonprofit institutions in general.
Because state and federal taxpayers subsidize the trust, it has a duty to use its enormous resources -- an endowment worth $5 billion, $4 billion in other assets and millions of dollars worth of donations and sponsorships -- for the public good, not private gain. But recent reports in The Times about the perks and power conveyed on Barry Munitz, the trust’s president and chief executive, have created the perception that Munitz and the board of trustees view the Getty as their plaything.
The Getty has long held an exalted place in the art world, with its diverse collections, incomparable setting and unmatched wealth. But these most recent disclosures show the foundation to be exceptional in an entirely different way. They bring back unpleasant memories of the tales of corporate greed earlier this decade, when it seemed that every scandal could be traced to an “imperial CEO” and his all-too-compliant board.
For Munitz, it seems, no perk was too extravagant (a $72,000 Porsche SUV) or too trivial (umbrellas delivered by express mail when he was on the road). And the foundation’s board -- headed, ironically, by John H. Biggs, former chairman of one of the world’s largest retirement systems, who is a longtime proponent of tougher oversight and greater accountability in the corporate world -- was entirely too willing to grant his wishes, or at least allow his wishes to be fulfilled.
As is the case with many a corporate scandal, no single decision made by either Munitz or the board may be indefensible. It is the pattern of behavior that is disturbing.
Among the most troubling revelations was the sale of Getty-owned real estate in Brentwood for substantially less than its appraised value to billionaire Eli Broad, a close friend and professional associate of Munitz. Getty documents show Munitz planned the strategy for the negotiation and discussed the property in person with Broad.
Given the closeness of their relationship -- they vacation abroad together -- the sale raises legal and ethical questions.
The California attorney general’s office has opened an inquiry into the sale and other activities at the Getty, including Munitz’s pay and benefits package, reimbursements, grants, gifts to trustees and expenditures made for his wife.
The increases in Munitz’s compensation and the awarding of expensive perks, even during austere times, have raised eyebrows throughout the U.S. nonprofit sector.
Auditors from the Internal Revenue Service found nothing wrong with Munitz’s pay or perks in 2001, 2002 and 2003, Getty officials say. Yet the Getty’s willingness to pay for Munitz’s luxuries and cater to his whims betrays a culture of entitlement inappropriate for a tax-exempt charitable foundation.
These issues might be easier to ignore if they were the only sour notes struck at the Getty. Munitz’s tenure got off to a strong start as he focused the trust’s sprawling enterprises on four core missions: the museum, its research and conservation institutes, and its grant-making foundation. And the Getty Museum has become a major public attraction, drawing more than 1.3 million visitors last year.
On the other hand, current and former Getty employees blame Munitz’s management style for a “toxic atmosphere.” Many of those employees still lament the abrupt departure last year of museum director Deborah Gribbon, who cited broad philosophical differences with Munitz.
Meanwhile, the Getty’s acquisition of antiquities has come under scrutiny in an Italian court, where Marion True, curator for antiquities at the Getty Museum and director of the Getty Villa, stands accused of criminal conspiracy to receive stolen goods and illicit receipt of archeological items. The indictment also alleges that True essentially laundered goods that were purchased by a private collection and then sold to the Getty, creating phony documentation.
The Getty trustees have defended Munitz in letters to The Times, saying that his spending had been appropriately vetted by the board or its designees. And in fact, the board’s policies and procedures for executive salaries, employee travel and reimbursements meet the recommendations made this year by a blue-ribbon panel on nonprofit governance.
The board, which is packed with Munitz’s friends and professional associates, seems blind to the appearance that Getty funds are being used not for the public’s enrichment but to pamper Munitz. The revelations are likely to make it more difficult for Brand, the new museum director, to complete one of the tasks Munitz has assigned him: raising money from corporate sponsors and private donors. Those supplications will be difficult enough, given the Getty’s famously deep coffers.
More important, though, the Getty trustees have a responsibility to the many other charitable organizations that rely on donations and taxpayer subsidies to do their work. They simply cannot feed the public’s cynicism about what the administrators of charities do with their money.
“Public trust is essential to a viable nonprofit sector,” the blue-ribbon panel on nonprofit governance said in its report in June. “Strengthening this trust depends on the extent to which charities and foundations operate transparently, prevent fraud and the enrichment of insiders and other abuses, and serve the purposes for which they have been created.”
The Getty board should heed that message now and start rebuilding the public’s faith in how the institution spends its money. The trustees should also consider whether Munitz is the right man to lead the Getty into its next chapter.