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OT: Pat Haden/not looking good in LA Times - Printable Version

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OT: Pat Haden/not looking good in LA Times - TreesAndBirds - 06-18-2016



http://www.latimes.com/local/lanow/la-me-ln-mayr-foundation-20160617-snap-story.html


Re: OT: Pat Haden/not looking good in LA Times - Cadet84 - 06-18-2016

USCumbag >:(

Re: OT: Pat Haden/not looking good in LA Times - washingtonismoney - 06-18-2016

Just about to post it. Particularly rich since, we were assured, Pat Haden was the ethical guy.

Re: OT: Pat Haden/not looking good in LA Times - fullmetal - 06-18-2016

Life is good for Haden, isn't it? 

Re: OT: Pat Haden/not looking good in LA Times - 82 Card - 06-18-2016

Since when is ragging on anything at $C OT around here?

Re: OT: Pat Haden/not looking good in LA Times - Nan3cy - 06-18-2016

(06-18-2016, 02:17 PM)82 Card link Wrote:Since when is ragging on anything at $C OT around here?

+1

Re: OT: Pat Haden/not looking good in LA Times - Mick - 06-18-2016

(06-18-2016, 12:12 PM)TreesAndBirds link Wrote:http://www.latimes.com/local/lanow/la-me-ln-mayr-foundation-20160617-snap-story.html

Bad dog, Pat.  Very bad dog.  You're going to get punished....

Re: OT: Pat Haden/not looking good in LA Times - 81alum - 06-18-2016

That is so wrong on so many levels.  1) Paying himself large sums for what should be charitable work.  2) Nepotism.  3) Making the fund a private SC affair.  Yes, this was the man who was supposedly ethical.  This is truly sleazy.  I wonder if he violated any laws?

Re: OT: Pat Haden/not looking good in LA Times - 2006alum - 06-19-2016

Glad to see ESPN pick up on this. It really is pretty scandalous when you look at how little the foundation was awarding in grants per year relative to the paychecks him and his family.

And seriously - if he was recused from all USC decisions, and USC received close to half of all grants, doesn't that mean he was recused from roughly 50% of the foundation's work? Come on!

Re: OT: Pat Haden/not looking good in LA Times - Mick - 06-19-2016

it's been a while since I've had the relevant tax course, but I was under the impression that a foundation needs to pay out a minimum of 5% of the fund's assets.  The fund has $25 million in assets, meaning they'd have to pay out a minimum of $1.25 million annually.  Instead, it appears that they paid out $644,000 last year.  In 2008, they paid out $1.1 million.  The 5% includes reasonable administrative expenses, but what is reasonable when directors are looting the fund?  They might have an IRS issue here, though they do have a year to make up the shortfall.

Odd aside: Other than USC, their top 10 investments were Srs. of St. Joseph Carondolet/St. Mary's Academy; Jesuit (Loyola Marymount University, Loyola Marymount University, U of San Francisco, Verbum Dei); Diocesan (Bishop Amat), Interdenominational Christian (Azusa Pacific), Disciples of Christ (Chapman).


Re: OT: Pat Haden/not looking good in LA Times - BostonCard - 06-19-2016

(06-19-2016, 04:09 PM)Mick link Wrote:it's been a while since I've had the relevant tax course, but I was under the impression that a foundation needs to pay out a minimum of 5% of the fund's assets.  The fund has $25 million in assets, meaning they'd have to pay out a minimum of $1.25 million annually.  Instead, it appears that they paid out $644,000 last year.  In 2008, they paid out $1.1 million.  The 5% includes reasonable administrative expenses, but what is reasonable when directors are looting the fund?  They might have an IRS issue here, though they do have a year to make up the shortfall.

Odd aside: Other than Unbelievably Spoiled Children, their top 10 investments were Srs. of St. Joseph Carondolet/St. Mary's Academy; Jesuit (Loyola Marymount University, Loyola Marymount University, U of San Francisco, Verbum Dei); Diocesan (Bishop Amat), Interdenominational Christian (Azusa Pacific), Disciples of Christ (Chapman).

I'm actually a bit surprised that the "donations" didn't go to USC feeder high schools.

BC

Re: OT: Pat Haden/not looking good in LA Times - winflop - 06-20-2016

(06-19-2016, 04:09 PM)Mick link Wrote:it's been a while since I've had the relevant tax course, but I was under the impression that a foundation needs to pay out a minimum of 5% of the fund's assets.  The fund has $25 million in assets, meaning they'd have to pay out a minimum of $1.25 million annually.  Instead, it appears that they paid out $644,000 last year.  In 2008, they paid out $1.1 million.  The 5% includes reasonable administrative expenses, but what is reasonable when directors are looting the fund?  They might have an IRS issue here, though they do have a year to make up the shortfall.

Odd aside: Other than Unbelievably Spoiled Children, their top 10 investments were Srs. of St. Joseph Carondolet/St. Mary's Academy; Jesuit (Loyola Marymount University, Loyola Marymount University, U of San Francisco, Verbum Dei); Diocesan (Bishop Amat), Interdenominational Christian (Azusa Pacific), Disciples of Christ (Chapman).

I've never heard of that requirement before and am skeptical.  A capital fund that is trying to grow to a certain dollar amount shouldn't be held to that kind of requirement.

Re: OT: Pat Haden/not looking good in LA Times - washingtonismoney - 06-20-2016

(06-20-2016, 07:04 AM)winflop link Wrote:[quote author=Mick link=topic=15215.msg165261#msg165261 date=1466377765]
it's been a while since I've had the relevant tax course, but I was under the impression that a foundation needs to pay out a minimum of 5% of the fund's assets.  The fund has $25 million in assets, meaning they'd have to pay out a minimum of $1.25 million annually.  Instead, it appears that they paid out $644,000 last year.  In 2008, they paid out $1.1 million.  The 5% includes reasonable administrative expenses, but what is reasonable when directors are looting the fund?  They might have an IRS issue here, though they do have a year to make up the shortfall.

Odd aside: Other than Unbelievably Spoiled Children, their top 10 investments were Srs. of St. Joseph Carondolet/St. Mary's Academy; Jesuit (Loyola Marymount University, Loyola Marymount University, U of San Francisco, Verbum Dei); Diocesan (Bishop Amat), Interdenominational Christian (Azusa Pacific), Disciples of Christ (Chapman).

I've never heard of that requirement before and am skeptical.  A capital fund that is trying to grow to a certain dollar amount shouldn't be held to that kind of requirement.
[/quote]

Mick is correct -- foundations are required to disburse a certain amount every year; idea is to avoid ... just this sort of situation: trustees/whomever enriching themselves without staying true to their cause.

Re: OT: Pat Haden/not looking good in LA Times - oldalum - 06-20-2016

(06-20-2016, 07:21 AM)washingtonismoney link Wrote:Mick is correct -- foundations are required to disburse a certain amount every year; idea is to avoid ... just this sort of situation: trustees/whomever enriching themselves without staying true to their cause.
I don't see how the 5% distribution requirement would prevent a foundation's officers from unjustly enriching themselves. Another view of the purpose of the requirement:

In general, Section 4942 of the Internal Revenue Code requires private foundations to distribute 5% of the fair market value of their assets each year. The intent of this requirement is to ensure that private foundations are serving legitimate charitable purposes and not merely acting as a means for the foundation’s contributors to avoid taxes on their investment earnings. Since private foundations are, by definition, supported by only a few donors, and private foundations pay only a small excise tax of 1% or 2% on investment earnings, it is conceivable that, absent a requirement for private foundations to make annual grant distributions, private foundations could be misused by wealthy individuals as a way to hold investments in a nearly tax-free environment.

http://www.rubinbrown.com/article/3338/Focus-on-Not-For-Profits-Private-Foundations-Must-Meet-the-5-Annual-Distribution-Requirement-While-Ensuring-the-Long-Term-Viability-of-Their-Investment-Portfolios.aspx?articlegroup=1117

Re: OT: Pat Haden/not looking good in LA Times - washingtonismoney - 06-20-2016

(06-20-2016, 09:39 AM)oldalum link Wrote:I don't see how the 5% distribution requirement would prevent a foundation's officers from unjustly enriching themselves. Another view of the purpose of the requirement:

In general, Section 4942 of the Internal Revenue Code requires private foundations to distribute 5% of the fair market value of their assets each year. The intent of this requirement is to ensure that private foundations are serving legitimate charitable purposes and not merely acting as a means for the foundation’s contributors to avoid taxes on their investment earnings. Since private foundations are, by definition, supported by only a few donors, and private foundations pay only a small excise tax of 1% or 2% on investment earnings, it is conceivable that, absent a requirement for private foundations to make annual grant distributions, private foundations could be misused by wealthy individuals as a way to hold investments in a nearly tax-free environment.

http://www.rubinbrown.com/article/3338/Focus-on-Not-For-Profits-Private-Foundations-Must-Meet-the-5-Annual-Distribution-Requirement-While-Ensuring-the-Long-Term-Viability-of-Their-Investment-Portfolios.aspx?articlegroup=1117

As you indicate, it doesn't prevent unjust self-enrichment, but does ameliorate it -- as the quote you've pasted indicates.

Re: OT: Pat Haden/not looking good in LA Times - fishman - 06-20-2016

The key word in the IRS code's 5% requirement is "distribute", which includes both contributions and administrative expenses, such as salaries to officers and directors.  Of course they could question whether the expenses are out of proportion to the contributions being made.  Also, as others have pointed out, there is a carry-over provision that allows a foundation to later make up for a year when its distributions fall below 5% of its endowment.  As a practical matter, the IRS doesn't seem to scrutinize those requirements very closely, but this situation certainly does have a foul odor coming from it.   

Re: OT: Pat Haden/not looking good in LA Times - oldalum - 06-20-2016

(06-20-2016, 10:42 AM)washingtonismoney link Wrote:As you indicate, it doesn't prevent unjust self-enrichment, but does ameliorate it -- as the quote you've pasted indicates.

I'm afraid I still don't understand how the 5% requirement ameliorates paying board members and consultants too much money. In fact, in a way it encourages it because those payments count toward the 5%. The quote addresses preventing donors to the foundation from investing and amassing wealth without paying taxes, not how much it pays the board members and consultants. Haden apparently was not a donor, just a recipient!

Don't think the difference is important to the central point, which is that Haden siphoned off large amounts of money for himself and family that should have gone to support college scholarships. But Haden, great guy that he is, must have concluded the greater good was better served that way, probably based on the Haden trickle-down theory of utilitarianism.

Re: OT: Pat Haden/not looking good in LA Times - Bruce Wang - 06-20-2016

It doesn't surprise me that a corrupt leader from a corrupt institution would steal through legal means.  What's surprising is that he was stupid enough to think he could get away with it.

Re: OT: Pat Haden/not looking good in LA Times - Mick - 06-20-2016

(06-20-2016, 12:27 PM)Publius link Wrote:It doesn't surprise me that a corrupt leader from a corrupt institution would steal through legal means.  What's surprising is that he was stupid enough to think he could get away with it.

To me, that's the least surprising part.  This is an AD who ran down onto the field to hector officials.  he's thought he was Teflon for a long, long time.

Re: OT: Pat Haden/not looking good in LA Times - fullmetal - 06-20-2016

(06-20-2016, 12:27 PM)Publius link Wrote:It doesn't surprise me that a corrupt leader from a corrupt institution would steal through legal means.  What's surprising is that he was stupid enough to think he could get away with it.

He was right about getting away with it up to a certain point.  If charges can be filed, I hope they will be.