Nonprofit Governance: The Bizarre Case of the Socialite Fundraiser Extraordinaire and a $450,000 Footnote on the Audit

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Dede-Wilsey

Balenciaga and Spain Opening Gala / Viva Vivanista

October 19, 2015; San Francisco Chronicle Blog

As the de Young Museum celebrates its tenth anniversary in San Francisco, local philanthropist Dede Wilsey, who is both the president of the board of trustees and CEO of the Fine Arts Museums, which includes the de Young and the Legion of Honor, is under scrutiny for authorizing an otherwise-unsanctioned $450,000 payment to a staff member who had retired.

Michele Gutierrez, the Fine Arts Museums’ CFO and the whistleblower in the case, says Wilsey convinced her to co-sign the check based on her assurances that the board had been informed and had approved the payment. (The museums’ governance setup is described here.)

Wilsey cannot be criticized for a lack of energy as a champion of the museums; she has been credited with raising $190 million to establish the de Young in 2005 (including a $10 million donation from her). In fact, she is a local fundraiser extraordinaire, having also helped raise $3.2 million for Immaculate Conception Academy, $16.6 million for Grace Cathedral, and more than $400 million for the UCSF Medical Center at Mission Bay. And she was lead sponsor for a $22 million capital campaign for an extension to the opera’s digs, now to be called the Diane B. Wilsey Center for Opera.

It may be interesting to readers to review this network map for Wilsey from a 2013 article in Muckety where she was described as “something of a potentate,” as “having too much clout,” and at one and the same time the museum’s “savior and potential destroyer.” The article was one of many published in the wake of more than two dozen firings and leavings. The New York Times also covered the story:

Criticism has come from outside the institution as well. Last June a city audit condemned the museums for eliminating term limits for the board president, a move championed by Ms. Wilsey, who has held the seat since 1998. The audit also noted that oversight of the “budget, financial audits and facilities is not being conducted in a public or transparent manner.”

“Aha!” you say, the perfect individual to have in three positions of power in a publicly funded institution.

According to this article in San Francisco Magazine, Wilsey is unthwartable:

“No one would dare to criticize Wilsey in public,” says one person connected with the Fine Arts Museums. But everyone with money in San Francisco has a story of how she goes about extracting it, from a benign trading of favors to something a bit more uncomfortable. “It’s always convivial until the teeth lock in and the victim has nowhere to run,” former Fine Arts Museums director Harry Parker once said. San Francisco businessman Warren Hellman thinks the key to Wilsey’s fund-raising ability is her own willingness to give. “She’ll call you and say, ‘Here’s my project, and I’m putting in such and such amount. What are you putting in?’ And she’s one of the few people who decides in her own mind what she thinks other people are capable of giving. If you come back with less, she’ll say, ‘I think you ought to rethink that.’”

So major socialite donor/CEO/president of the board of trustees all in one package—where are the checks and balances? Is it any wonder that some report that Wilsey has become “autocratic and whimsical?” As mentioned, staff turnover has been pretty rapid of late, and now the same may be developing at the board level. Fellow board members Bernard Osher and Jack McDonald are reported to have resigned over the lack of controls, and a complaint has been made to the city, which contributes $16 million a year to the two museums, overseen by the board, and to state attorney general Kamala Harris. (Harris’s office has reportedly requested a financial accounting.) But the trustees themselves say they have already had an internal investigation done, and all is well.

Bill Huggins, the recipient of the $450,000 (why that sum?) made $82,000 annually as a city-assigned engineer. He retired in September 2014 after a heart attack and now collects a $56,580 annual pension. His wife, Therese Chen, is director of registration at the de Young and was known for doing favors for Wilsey, though she is on a leave of absence to care for her husband.

Gutierrez says after she co-signed the check, which was released in May 2014, she found out that the Finance Committee, which includes Osher, had not in fact authorized the payment. Apparently, Wilsey was taken to task by Osher, but insisted that as CEO she was authorized to make the payment.

Wilsey’s personal publicist later released a statement claiming the payment was “made under the recommendation” of CFO Gutierrez as “a disability severance payment authorized under Section 5.102 of the City Charter.” It also claimed that the payment was approved unanimously by two full boards and two audit committees, albeit with Osher and McDonald abstaining. Reports suggest that this approval came nine months after the fact, and that the payment was a mere footnote in the audit.

Gutierrez has since been demoted from CFO to director of finance, whereupon she filed her whistleblower complaint.

The thing is, it sounds like Wilsey could very well have come up out of her own pocket with what to her may seem like spare change for her friend’s husband, but maybe she believes—with some justification—that the Museums’ budget is her own pocket. In any case, the problem remains: What the heck do you do with a prolific fundraiser who has a lock on decision-making at a nonprofit that is supposed to be acting in service to the public? Who wants to tell Wilsey that maybe it’s time to resign one or two of those positions? Maybe the attorney general?—Ruth McCambridge

  • Ann Treboux

    Wilsey was a SFAC Commissioner during the
    Luis Cancel era. She is a trustee for the War
    Memorial and which creates a conflict of interest for the Wisley Center for Opera on the 3rd floor.
    Will see be taking objects from there to her home to display for parties? I refer to the Degas
    painting she took from the DeYoung. There is
    No term limit on her appointment over there either.

    What about her Ethics filings? Doesn’t appear
    in order.