Malaysian Money Scandal Touches Leonardo DiCaprio Charity and California Community Foundation

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August 17, 2016; Hollywood Reporter

What does the 1MDB embezzlement scandal in Malaysia have to do with philanthropy in California? Quite a bit when the connection is movie superstar Leonardo DiCaprio, his charitable endeavors, and whom he might be counting among his friends and “collaborators.” Quoting the Hollywood Reporter, “According to the Justice Department, certain donations to the Oscar winner’s charity came directly from a multibillion-dollar embezzlement drama in Southeast Asia.”

It’s not unusual for celebrities to have charities named after them. In fact, DiCaprio once had such a charity, according to GuideStar. The “Leonardo DiCaprio Charitable Foundation” dissolved in 2008, apparently transferring its assets to the California Community Foundation. The current “Leonardo DiCaprio Foundation” (LDF) is, in fact, a donor-advised fund (DAF) administered by the CCF.

Unfortunately for an inquisitive press and federal investigators, DAFs don’t allow for much in the way of nonprofit transparency. LDF has a six-person staff not paid by the community foundation, including a “global finance chairman” who might be named Milutin Gatsby (yes, Gatsby, like the F. Scott Fitzgerald novel character DiCaprio played in the movie remake). DiCaprio’s DAF hasn’t made Gatsby available for an interview. Neither the CCF nor the LDF have agreed to answer questions about the DiCaprio fund’s specific structure, operations, or finances. There has also been no mention of DiCaprio making personal donations to his DAF.

Two years ago, a gala in St. Tropez hosted by DiCaprio was reported to have raised $25 million for the LDF, but as noted at the time, there was no public accounting. Also, as those familiar with nonprofit special events fundraising are aware, an announced total often is a gross figure, neglecting to account for event costs or funds accumulated elsewhere and attributed to the event’s total.

This year’s event was reportedly attended by 500 people, with a minimum ticket price of almost $12,000 per person. However, even this $6 million figure is unreliable because some guests may have paid more and other guests (particularly some celebrities and hangers-on) may have received complimentary tickets. The Leonardo DiCaprio Foundation (the donor-advised fund) claimed $45 million in 2016 gala receipts, with proceeds to be used for global conservation efforts. However, with no documents being provided and no access to DiCaprio or LDF fund staff to substantiate what was actually raised and how it was really spent, it’s impossible to know what’s really happening. With such a well-known figure claiming to raise millions for his eponymous philanthropy while refusing to disclose specifics, we may see increased calls for accountability and disclosure specific to donor-advised funds.

Will the California Community Foundation continue to remain silent on the LDF’s activities? How will the notoriety associated with LDF’s activities and its possible ties to a multibillion-dollar offshore investment scandal currently under federal investigation affect CCF’s fundraising and operations? In particular, how will it affect CCF’s 2015 pledge to spend $1 billion over ten years to support Los Angeles–area nonprofits?—Michael Wyland

  • stephanie sandler

    If the fundraising was conducted within the DAF at CCF, the special event fundraising would be reflected in CCF’s 990, particularly because it is probably one of the top special events of the year. If the ticket purchases were not directed to the DAF, then they are not eligible for a tax-deduction. There is no legal requirement for transparency if the fundraising was done outside of ANY charitable vehicle. Whether it is a DAF or not is not much of an issue.