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Nonprofits Panel Puts Getty on Probation

The 60-day penalty is for failure to turn over all data sought in a probe of the trust's finances.

December 21, 2005|Robin Fields | Times Staff Writer

The Council on Foundations, the main industry group for the nation's nonprofits, said Tuesday that it has placed the J. Paul Getty Trust on probation for 60 days after the trust failed to turn over all the information requested for an investigation into its financial practices.

The council began its inquiry in June, spurred by reports in The Times that the Getty's chief executive, Barry Munitz, had spent the trust's money on lavish pay, travel and perks and appeared to have influenced the sale of Getty property to Los Angeles billionaire Eli Broad, a close friend.

The Getty did not turn over any records requested by the council until this month, trust officials acknowledged.

"We need more information before we can determine if the charges are accurate," said council President Steve Gunderson. In placing the trust on probation, he said, "We've put a timeline on this."

In a letter to John Biggs, chairman of the trust's board, Gunderson said the council would "await the receipt of that information before making further decisions regarding the foundation's membership status."

Getty officials said they were responding as quickly as they could, trying to balance the council's demands with those of the California attorney general's office, which is also investigating the trust's use of tax-exempt funds.

"We have gathered so far 60 boxes of material for the attorney general," Biggs said. "We have a group of very expensive lawyers working on this investigation, including through weekends. Given that, I don't know what more we can do."

The Getty's probation was the first ever imposed by the council, acting under a new ethics policy adopted last year. The policy requires that whenever misconduct allegations are leveled against a member, a confidential review must be conducted by a panel from outside the institution in question.

The council, whose membership includes about 2,000 nonprofit organizations nationwide, has been strengthening its emphasis on accountability in recent years.

Though the probation carries no financial penalties and does not signify a finding that the Getty violated ethics standards, others in the nonprofit world said it struck a blow to the trust's image.

"It's bad for the Getty," said Claire Peeps, executive director of the Santa Monica-based Durfee Foundation, which makes arts grants and belongs to the council. "My sense is the Getty has a sterling reputation and extraordinary track record of contributions to the field that has been besmirched by these recent allegations."

As the loudest voice on Capitol Hill for foundations, trusts and other grant-making organizations, Peeps said, the council plays a central role in the nonprofit field.

Nonprofits are also under heavy outside pressure to demonstrate fiscal responsibility: The Senate Finance Committee is reviewing the laws that govern the organizations and proposing more restrictions on how they use their resources.

Sen. Charles E. Grassley (R-Iowa), the committee's chairman, has sharply criticized the Getty, saying its board "has been spending more time watching old episodes of 'Lifestyles of the Rich and Famous' than doing its job of protecting Getty's assets for charitable purposes."

The $9-billion Getty Trust -- the world's richest art institution -- has been the target of criticism much of this year.

Besides the reports about Munitz, the Getty's former antiquities curator, Marion True, is on trial in Rome, accused of trafficking in looted artifacts. Officials in Italy and Greece have identified dozens of allegedly looted works at the Getty.

True retired in September after The Times questioned trust officials about a $400,000 loan she received with aid from a key supplier to the Getty Museum.

In October, the Getty launched its own investigation, forming a special committee composed of five board members, assisted by attorney Ronald L. Olson, to look into issues related to the trust's finances, governance and antiquities acquisitions.

Trust officials said the committee hoped to conclude its review by the end of January, when they have promised to provide additional information to the Council on Foundations.

Gunderson said the council was sending two messages in placing the trust on probation.

"The first is that we take the allegations very seriously," he said. "The second is that we are committed to working with the Getty, to help them correct the problems and to operate in a more appropriate way."

Times staff writers Jason Felch, Ralph Frammolino and Christopher Reynolds contributed to this report.

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