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MOCA ordered to revamp its budget practices

The California Attorney General’s office says the museum mismanaged its finances and abused state law.

April 16, 2010|By Mike Boehm, Los Angeles Times

When board members were told the attorney general was insisting they attend a training session about their financial responsibilities, Young said, "I think a couple of people said, `Gosh, I know all that stuff.' We said, `We're glad you know it, but we have a requirement that you have the same information as all the other board members, and that we're all operating on the same set of assumptions and policies.'" He likened the exercise to the emergency instructions flight attendants give before a plane takes off — dull for experienced airline passengers, potentially crucial new information for others, but a sensible precaution for all.

Munger,Tolles & Olson, a law firm that represents MOCA, has provided the fiduciary training pro bono in both group and individual sessions, Young said, with all new trustees receiving it as they join.

A spokeswoman for the Attorney General's office said Thursday penalties could include a requirement that board members repay money drawn improperly from an endowment, but "whether and how that occurs is based on the facts and circumstances of each situation."

Los Angeles attorney Douglas Mancino, an expert on nonprofit law, said that California law absolves volunteer board members of personal liability in cases of overspent endowments, as long as they didn't benefit personally. He said that one possible penalty could be removal from a board, which would require the attorney general or a fellow board member to bring a lawsuit.

The portrayal of an uninformed MOCA board in the attorney general's letter conflicts with accounts some museum board members and former members gave in interviews at the time of its crisis in 2008. Susan Bay Nimoy said at the time that she had left the board in 2006 out of frustration with MOCA's overspending. "We all got the financial reports and saw exactly what was happening," she recalled. "Some people saw it and tried to tell the leadership that this was a train wreck waiting to happen. Those of us who protested were ignored, and we left."

Jeffrey Deitch, a high-profile New York City art dealer, is giving up his business to become the museum's director starting June 1. He'll be the fourth director since MOCA's founding in 1979.

mike.boehm@latimes.com

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