Few stories have created more of a storm or been more oddly reported in the
last year or so than the financial troubles of the Milwaukee Public Museum. Last
week’s Milwaukee Journal Sentinel article on the indictment of the
museum’s former chief financial officer, Terry Gaouette, followed that pattern,
offering an incomplete story to readers.
It was in May 2005 that the Journal Sentinel reported the museum’s
huge shortfall and essentially blamed it all on Gaouette. I wrote a couple of
columns suggesting that much of the fault lay with the board of directors, which
oversaw the museum’s operations. Soon after, the JS did an investigative
story headlined “Hands-off board hurt museum,” documenting all of the ways the
board failed in its responsibilities. Six months after that, a county audit
concluded that the board failed to properly oversee Gaouette and the museum.
But all is now forgotten. Last week’s story simply reported the indictment
without discussing any of the problems of board governance. We are back to May
2005 – it’s all Gaouette’s fault. Get the rope, boys, it’s time for a lynching.
Typically, the Journal Sentinel references past stories when a new
development occurs, but not this time. The JS story had quotes from
county and museum officials praising the indictment, but no one, save Gaouette’s
lawyer, raising the issue of board oversight or questioning whether the
indictment will succeed.
Jack Siegel, an expert in nonprofit governance who’s written
extensively about the public museum’s problems for charitygovernance.com,
says he was interviewed by the paper for last week’s story, but none of his
comments made it into print. Siegel is highly critical of the board, but
apparently no such observations were wanted in this story. (While I don’t agree
with all of his conclusions, Siegel’s Web site is a must-read for those
following the public museum story.)
This was a “lackadaisical” and “hands-off” board, past JS stories
found, whose members were frequently absent from meetings and whose board
president at the time, David Meissner, missed about half of the meetings.
It is a board that “did not have the right controls or committee structure in
place” to detect problems, as current board chair John E. Schlifske has
admitted. The board unwisely combined its audit and finance committees, thereby
ending the normal oversight of operations, and this combined committee, in turn,
rarely met. The board “failed to adequately supervise staff reports and
indirectly fostered a corporate culture that discouraged frank discussion of the
‘downside’ risks associated with the aggressive growth experienced” by the
museum, the county audit concluded. And that’s just a sample of the slams
against the board.
This context is surely important if readers are to understand the charges
against Gaouette. It may be that he falsified documents and made statements that
misled board members, but there is reason to think the board didn’t want any bad
news. And that goes to motive, which is where this indictment seems weak. There
is no accusation that Gaouette pocketed any money (which is what makes the case
different than the OIC, where government money personally benefited former state
Sen. Gary George).
Tucked into the last paragraph of the indictment is the contention that
Gaouette provided false reports to “preserve his job with the museum.” But
Gaouette wasn’t a fund-raiser. Why would he be fired for the shortfall? Why
would he think he need report only good news, unless that was the message he got
from the board?
Siegel predicts that Gaouette’s lawyer will have a field day calling all of
the board members as witnesses. Perhaps. Certainly, this court case is likely to
cause further embarrassment to an institution that can ill afford it. Supporters
of the museum may yet regret pushing for a criminal investigation.
The Strange Saga of UWM’s Research Czar
Remember Abbas Ourmazd, the one-time “czar of research” for the
University of Wisconsin-Milwaukee, who suddenly resigned after a vague
accusation that he wasn’t getting support from the school? It seems there’s more
to the story.
Ourmazd was given a one-year appointment effective July 1, 2005. On July 12,
2006, almost two weeks after his appointment expired, Ourmazd went to the press
and threatened to resign. That, of course, was impossible unless his position
had been renewed. But it hadn’t been.
Nonetheless, Ourmazd’s vague accusation that UWM was not fully committed to
increasing research funding was bad PR for Chancellor Carlos Santiago,
who has staked his reputation on this issue. Ourmazd, however, never made clear
what his accusations were. Why not?
It looks like UWM threw money at Ourmazd to quiet him. Ourmazd’s contract
stated that if his appointment wasn’t renewed, he would still have tenure as a
Department of Physics professor and would collect his original salary of
$240,000 for one year and thereafter would make $192,000. But Tom Luljak,
vice chancellor for university relations, says Ourmazd is getting $256,000 for
the next year and will thereafter get $205,000 per year. Did UWM give him a
$16,000 raise for this year and a $13,000 lifetime raise to be quiet?
Whatever the reason for such a salary, exactly what are taxpayers getting for
their money here? According to a staff person handling inquiries at the
Department of Physics, Ourmazd is teaching no course this semester and is not
scheduled to teach anything for next semester. Luljak suggested that Ourmazd
might do some research work in physics. Nice work if you can get it.
In July, 2005, Milwaukee Journal Sentinel reporter Megan Twohey
wrote a story documenting the fact that four UWM administrators who had resigned
and taken fall-back positions were earning anywhere from $113,000 to $187,000
annually. Their current duties at the university were largely unspecified, which
“raises questions about the university’s management of increasingly scarce
taxpayer dollars,” Twohey wrote.
Twohey was sent an anonymous tip with the information for this story, or so
says a mysterious tipster who recently gave me the information on Ourmazd. This
tipster also sent Twohey the information on Ourmazd some time ago, only to give
up waiting and send the information to me.
Given that Ourmazd is making $69,000 more than the $187,000 earned by the top
administrator Twohey reported on last year, why has there been no reporting on
Ourmazd?
For that matter, why is it front-page news that Milwaukee Area Technical
College President Darnell Cole just got raised to a $210,000 salary for
running such a huge institution, but there’s no headline to tell us that Ourmazd
is collecting $256,000 for doing next to nothing?
I have no grand theory as to why the news wasn’t covered in this case. But as
always, we’re more than happy here at Milwaukee Magazine to provide an
outlet for such stories.
Short Take
The Greater Milwaukee Committee report on the county budget hasn’t yielded
any breakthroughs yet, but it has focused attention on the key issue of
healthcare costs. And there are signs that the GMC has nudged County Executive
Scott Walker, the County Board and union leaders to approach the issue in
a more cooperative and constructive fashion. Any such progress on this
intractable issue would be welcome.
