Los Angeles’ Museum of Contemporary Art has appointed three new trustees, including Bruce Karatz, the former chief executive of KB Homes who was convicted three years ago on four felony counts of failing to disclose the backdating of stock options.
Also joining the board are prominent investor Stanley Gold and Beverly Hills attorney and art collector Orna Amir Wolens, who has been a member of the Hammer Museum’s Hammer Circle support group.
MOCA’s announcement Wednesday that Karatz, Gold and Wolens had been elected to the board follows museum leaders’ recent decision to remain independent rather than accept an offer from the Los Angeles County Museum of Art to absorb MOCA. Instead, MOCA announced two weeks ago that it was stepping up its own fundraising efforts, with a goal of amassing a $100-million endowment.
The board said at that time that the museum already had received board member commitments that would lift the endowment past $60 million.
Karatz is a protege of Eli Broad, the billionaire founder of KB Homes and MOCA’s biggest financial backer. The former executive joins his wife, Lilly Tartikoff Karatz, on the museum board.
“MOCA is a dynamic part of the cultural identity of Los Angeles,” Karatz said in a statement. “I am delighted to be part of the board that will help ensure MOCA continues its tradition of impressive, groundbreaking exhibitions.”
Karatz’s 20-year run as KB Home’s chief executive ended in 2006 amid federal investigations into backdating of stock options used to boost corporate executives’ compensation.
In 2010, he was convicted in U.S. District Court in Los Angeles on four felony counts. He was sentenced to five years’ probation, including eight months of house arrest, as well as 2,000 hours of community service and a $1-million fine. Karatz, who had earned more than $230 million in his last three years at KB Home, also paid more than $7 million to settle a separate civil lawsuit brought by the Securities Exchange Commission.
Backdating to increase the value of stock options is legal if publicly disclosed; Karatz was convicted of failing to make the necessary disclosures to the company’s accountants, and in a 2006 quarterly financial report. The jury acquitted him on 16 other counts alleging that he had intentionally defrauded shareholders.
Philanthropically, Karatz has been a major supporter of Homeboy Industries, the Rev. Gregory Boyle’s effort to provide jobs and training for former gang members, and he was co-chair with then-Mayor Richard Riordan of a mid-1990s initiative that raised $15 million in donations to outfit all Los Angeles Police Department precincts with computers.
Gold is the chief executive of Burbank-based Shamrock Holdings, created as an investment vehicle for the Walt Disney family. He was a staunch ally of Roy E. Disney, Walt’s nephew, and with him led a shareholder revolt in 2004 that eventually forced the ouster of Michael Eisner as chairman and chief executive of the Walt Disney Co.
“For years, I have watched MOCA grow into a contemporary art powerhouse,” Gold said in a statement released by MOCA on Wednesday, “and I am excited to be part of MOCA’s future.”
Roy Disney died in 2009, and Gold continues to run Shamrock Holdings as an investment vehicle for Disney family members and other wealthy investors. Last year, Gold and Disney family members made an unsuccessful bid to buy the Los Angeles Dodgers.
Gold also serves on the boards of USC, where he was chairman from 2002 to 2008, and of the Natural History Museum of Los Angeles County. Gold was instrumental in negotiating the Walt Disney Co.'s 1997 gift of $25 million for construction of MOCA’s neighbor, Walt Disney Concert Hall. Roy Disney gave an additional $5 million that was earmarked for Disney Hall’s smaller, CalArts-run venue, REDCAT (the Roy and Edna Disney/CalArts Theater).
New MOCA board members pay a $250,000 induction fee and commit to annual contributions of at least $75,000.
The new trustees bring MOCA’s board roster to 35 dues-paying members. Seven others who are honored as “life trustees” for significant service to the museum and are excused from paying dues but also don’t have a vote.
Four others, museum director Jeffrey Deitch, chief financial officer Michael Harrison, Los Angeles Mayor Antonio Villaraigosa and Los Angeles City Council President Herb Wesson serve as “ex-officio” board members who serve because of the offices they hold.
The two elected officials have votes; their presence on the MOCA board was engineered in the early 1980s by Joel Wachs, then the City Council president, as a condition for MOCA’s long-term $1 a year lease on the Geffen Contemporary building. The converted city-owned warehouses in Little Tokyo became MOCA’s initial venue in 1983.