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The Munitz Collection

Getty's chief executive has been highly compensated during a time of austerity. His management style has come under scrutiny as well.

June 10, 2005|Jason Felch, Robin Fields and Louise Roug | Times Staff Writers

The world's richest art organization was facing hard times in spring 2003.

On a Wednesday in late March, seven security managers were called into a conference room at the J. Paul Getty Trust's hilltop campus in Brentwood and told that their positions had been eliminated.

It was the first in a series of layoffs and cutbacks that year at the Getty. The trust's endowment had lost more than $1 billion in two years, mostly because of declining stock markets. Despite its reputation for bottomless wealth, the Getty was pinching pennies.

But the cuts didn't apply to everyone.

Days after the security layoffs, trust Chief Executive Barry Munitz drove up the Getty Center's winding driveway in a new Porsche Cayenne. The Getty paid $72,000 for the SUV. When ordering it, Munitz told an aide it should include the "best possible sound system," "biggest possible sunroof" and "power everything...."

For The Record
Los Angeles Times Wednesday June 15, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 62 words Type of Material: Correction
Getty chief -- An article in Friday's Section A about Barry Munitz, chief executive of the J. Paul Getty Trust, said that a former employer, Maxxam Inc., had assumed responsibility for Munitz's portion of a $1-million fine that was part of a settlement with savings-and-loan regulators. In fact, Maxxam assumed responsibility for paying $1 million, but it was restitution, not a fine.

Munitz is a man of grand appetites, a player among Los Angeles' elite whose effusive personality and risk-taking management style have won praise even as they have alienated some of the trust's most respected staff members.

During his seven-year stewardship, Munitz has led the Getty through a trying period of change. But he has also pushed the limits on how nonprofit organizations use their resources.

Documents show that Munitz has spent lavishly, traveling the world first class at Getty expense, often with his wife, staying at luxury hotels and mixing business with pleasure.

Munitz's total compensation topped $1 million in 2003, placing him among the highest-paid foundation chiefs, museum directors and university presidents in the nation, according to published salary surveys and a Times review. That same year, as the Getty eliminated raises for other employees, Munitz asked for an increase that brought his 2004 pay package to more than $1.2 million.

Getty officials justified his compensation by saying the trust is a uniquely complex institution that places extraordinary demands on its leader. Yet, while running the Getty, Munitz has also had time to serve on more than a dozen corporate and nonprofit boards, work that earned him at least an additional $180,000 in cash or stock options in 2004.

In balancing outside pursuits and in managing the Getty, employees and critics say, Munitz has blurred the line between his own interests and those of the organization he leads.

Records show that he has employed the Getty's money and reputation to do favors for friends, once using trust letterhead to petition a state agency on behalf of a securities trader -- related to his wife by marriage -- convicted of fraud in the 1980s.

He has dispatched his office's driver to pick up videotapes of recent episodes of "Law & Order" and "The West Wing," instructed his assistants to express mail him umbrellas when he travels, and asked them to track down items for his wife, Anne T. Munitz.

"ATM saw in Europe but can't find her Tropicana blood orange juice, no pulp, not from concentrate," Munitz said in one dictation. "Can you look on the website and find out where we can get this on a regular basis locally?"

Under the tax code, nonprofits must use their resources for the public good. The Internal Revenue Service considers excessive pay, travel and perks to be "self-dealing": the illegal use of tax-exempt resources for private benefit.

Last year, the IRS launched an initiative to review executive compensation at nonprofits after a series of abuses were discovered elsewhere in the country. Congress is also considering the first major overhaul of laws governing nonprofit organizations in 30 years, spurred by reports that some of them have misused tax-exempt money.

In written responses to Times questions, Getty officials said the board explicitly authorized Munitz's pay, travel and participation in outside activities.

A recently completed IRS audit of the Getty's 2001, 2002 and 2003 fiscal years found nothing wrong with Munitz's pay, perks or financial practices, they said. They said the trust adhered to tax regulations. Getty officials conceded that two grants questioned by The Times had been made in violation of the tax code, but said the deficiencies were later addressed.

No matter how regulators view Munitz's actions, the deeper wounds may be internal. His critics say he has filled the Getty's top ranks with loyalists, transforming the trust into a bitter, divided place that has hemorrhaged talent.

"Barry and his key staff members not only lack the expertise, but have little regard -- and actually seem to have contempt -- for those who do have it," said Barbara Whitney, who resigned in 2004 as the museum's associate director for administration and public affairs.

"The people who dreamed the Getty Center, designed it, worked together, built it, and then opened it to the public with such acclaim and success -- within a few years of the opening, those same people were being treated like idiots by a handful of bureaucrats that Munitz brought in," she said.

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