Apparent Foundation Abuse and Neglect in North Fort Meyers, Florida

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January 22, 2016; The News-Press (Ft. Myers, FL)

The News-Press in Fort Meyers has done an exposé on a foundation there that reminds us of the stories of philanthropic self-dealing broken by the Boston Globe’s Spotlight Team in 2003.

The president (and treasurer, and trustee) of the John E. and Aliese Price Foundation in Florida, T. Wainwright Miller, has died, but far from leaving a public in mourning over the death of an admired philanthropist, he has left a mess. The foundation has $8.99 million in assets, down from the $19.3 million it had in 2000. And no, it is not a spend-down foundation…just, apparently, abused and neglected.

Melanie Payne and Amy Bennett Williams report that while at the helm of the foundation, Miller was paid $112,000 a year for dispersing an annual average of $225,000 in grants. The foundation also purchased two company cars for Miller out of the pot—a $45,000 Lincoln Town Car, and a $69,000 Cadillac—and it purchased office furniture and computer equipment for his home office for those late nights of making laborious grant decisions.

But there were no big grants. There was a slate of 35 beneficiaries and a board, the trustees of which made $8,000 annually, which met twice a year to vote on the awards. The meetings tended to last an exhaustive 30 minutes. It will probably surprise no one that Miller’s wife was on that board. And maybe you will not be surprised to hear that some of the grantees had their tax-exempt status revoked. The News-Press reports that the foundation spent a big 70 percent of its income on salaries and administrative expenses.

So, at least the organization made some grants, right?

The most consistent and greatest beneficiary of the Price Foundation’s grants was the Baptist Foundation of Fort Myers. That nonprofit charity’s only income, for the majority of the 18 years for which the News-Press could obtain records, came from Price Foundation grants. For many years, Miller was a trustee of the Baptist Foundation, a relationship not disclosed on Price Foundation reports to the IRS.

Since 1997, the Price Foundation has granted the Baptist Foundation $276,000, according to the Baptist Foundation records. After receiving funds from the Price Foundation, the Baptist Foundation made loans and grants to individuals, some of whom shared the last name of the Price Foundation’s only full-time employee, Laurette “Laurie” Claypool. Other loans and grants were made to neighbors, friends, and associates. One of the Baptist Foundation’s grants went to pay attorney fees for John Mark Kulo, a man with an extensive criminal record. Kulo is an inmate with the Florida Department of Corrections, currently serving a sentence for a fraud conviction, according to state records.

It is unclear what the criteria were for Baptist Foundation scholarship grants. The News-Press made numerous attempts to reach James Humphrey, the president of the Baptist Foundation and former mayor of Fort Myers, but he did not return three calls nor respond to an email.

Many of the loans, according to IRS records, do not appear to have been paid back. And nearly all of the recipients of loans and grants listed an address of 1279 Lavin Lane, North Fort Myers, Price Foundation headquarters. For example, all four of the 2014 individual grant recipients were listed at that address.

Who kept the books for the Baptist Foundation but Laurie Claypool? When asked if she was related to grant and loan recipients named Claypool, she demurred, writing in an email, “I have no authority from the Baptist Foundation’s president to release any information to you.”

Foundation Board member Russell Priddy, who is married to the founder’s granddaughter, accepts that the oversight has been scant. “The financial information the board is furnished with is a very collapsed version of a balance sheet and income statement,” Priddy said. “There’s a dollar figure on there and financials, but we were given no breakout.” But as this reporter points out, all Priddy needed to do was to look where the reporter did, on the Form 990s.

Priddy said he made motions in recent years to reduce board members’ pay and cut Miller’s salary, but none of the other trustees supported him. “After two unsuccessful attempts, I had my fee reduced to $1,000 a year,” Priddy said. That reduction took place for the fiscal year that ended September 30th, 2015, but payment to the other trustees and Miller remained the same, he said.

While Priddy declares that the board will do better in the future, is there any conceivable reason why it should be allowed a second chance at governance? Shouldn’t the IRS and Florida AG’s office take some action in this matter, up to and including criminal fraud charges and recovering some of the misused funds?—Ruth McCambridge

  • Jason Kingsley

    In this case, the fraud was egregious and could not have been simply a mistake. So, no, this board should not have a second chance, and the Baptist Foundation should be investigated, too.

    There are cases I have seen, though, where misspending has been accidental, because staff members simply did not have experience enough to know the can and cannot of grant funds. The language used by some granters was so heavy, staff simply didn’t realized that the funds could only be spent for specific parts of their organization. They used the designated funds for non-designated projects and operational costs, but never for money going to staff or their family and friends. Luckily, the granter caught it pretty early through reporting requirements, and was understanding about the error. The granter provided education to the organization, and the error was fixed.