Wine, but No Financials at this Nonprofit’s Board Meetings

July 31, 2018; The Ledger (Lakeland, FL)

The attorney general’s office for the State of Florida is suing to get control over the nonprofit Ritz Theater, saying that it has been mismanaged for more than ten years. This would involve unseating the board of directors and Stella Heath, the executive director, and removing the lien placed on the theater by that executive for $250,000 she says she is owed for unpaid salary between the years of 2006 and 2014. (The whole of what she claims she is owed is $418,000.)

Attorneys for the board claim the action on the part of the state is moot, since the nonprofit has listed the theater for sale. Assistant Attorney General Blaine Winship begged to disagree, challenging the board’s motives behind the sale.

“The Ritz’s current board and Miss Heath, its executive director, have gone and put this on the market in blatant violation of their fiduciary duties,” Winship said Tuesday. “They have done it knowing that this court had this matter pending before it, to have a receiver appointed. I mean, that’s chutzpah to the nth degree.”

Heath’s attorney, David Henry, has countered that the Ritz’s theater’s volunteer board isn’t subject to receivership, arguing that there would have to be fraud or criminality before receivership would be called for. Otherwise, “you would have a parade of not-for-profits in this county, in this circuit, in front of you every given month.”

Really? Coming up with many organizations with such a history of such public infighting and incompetence might be harder than he believes. Though a five-month AG investigation cleared Heath in June 2017 of criminal wrongdoing in filing the lien, locals had been sufficiently concerned that in February, they placed a full-page ad in the local paper under the name Friends of the Ritz, where they called for the board to open its books. The new board president, who had held office for only three days at that time, resigned, saying he wanted no part of the crisis. Community members also contacted Attorney General Pam Bondi’s office asking for its intervention, and two local developers apparently offered $65,000 to acquire seats on the board—a move the board viewed as a hostile takeover attempt.

State attorney’s investigator Stephen Menge wrote in a report that the theater managed over many years to lose the faith of its community.

As a result, the broad base of community support for the board that once existed for the Ritz has been gradually reduced to a very limited number of members hand-picked by its Executive Director Stella Heath. The State Attorney’s Office investigation uncovered a lack of sufficient financial recordkeeping, a disinterested board, who met irregularly, oftentimes while one or more board members drank wine, multiple versions of meeting minutes for the same meeting, and a history of questionable financial decisions were made.

Here is how the Ledger described the management of the organization last year:

[Former Board President Kathleen] Buldini told Menge she signed a number of checks issued to Heath in 2016 that totaled $33,000, but could not tell the investigator who was accounting for funds issued to or owed Heath from before she started.

Once Menge established that Buldini issued Heath checks that had not been tracked, her attorney stopped the interview.

But Buldini kept talking after the interview was stopped.

“She advised she concurred that their organization was not the best run nonprofit organization,” Menge wrote. “However, she believed other local nonprofits ran in a similar fashion.”

Several of the board members said they were unclear about details of the Ritz’s finances, but added that Heath was a hard worker who deserved the money.

Okay—that’s not exactly how it works.

Calling the theater a “monument to incompetence,” Tom Oldt, who belongs to Friends of the Ritz, says he hopes Bondi can make her case so that the Ritz can get the leadership it needs. The next hearing is at the end of next month.—Ruth McCambridge