LACMA unconcerned by attorney general’s finding on trustee Jamie McCourt

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Should the Los Angeles County Museum of Art be concerned because the California attorney general’s office recently determined that one of its trustees –- Jamie McCourt –- had improperly received personal benefits from a Los Angeles Dodgers charity she helped oversee as its vice president?

LACMA’s answer is ‘no’ -- and two outside experts on nonprofit boards and governance agree.

Last week the Los Angeles Times reported that the Dodgers Dream Foundation, which builds youth baseball fields and provides college scholarships for minority students, contracted with a public relations consultant in late 2008 for work that the attorney general subsequently determined was “primarily for the benefit of a member of the board of directors rather than the Dodgers Dream Foundation.”

Interviews and a foundation tax return indicated the unnamed board member was Jamie McCourt.

The attorney general told the Dodgers Dream Foundation in March that the $122,352 expenditure failed to comply with state law governing nonprofit organizations, and that the foundation’s overseers should repay that amount to the charity. A foundation attorney said Dodgers owner Frank McCourt, Jamie’s ex-husband, had done so from his personal funds.

“We don’t have the facts, and it has nothing to do with LACMA,” museum spokeswoman Barbara Pflaumer wrote in a response to a Times inquiry. “We can say [McCourt] has been a good trustee” who serves on the acquisitions committee, makes the annual six-figure contribution expected of board members, and “has actively participated at meetings and programs.”

McCourt joined LACMA’s board in 2009, months before the turmoil surrounding her marriage and the Dodgers’ finances became public. Asked last week whether the attorney general’s action regarding the Dodgers Dream Foundation could pose problems for her service at LACMA and USC, where she is also a trustee, her spokesman, Matthew Hiltzik, said it was “a non-issue.”

The Dodgers Dream Foundation had four trustees in 2008 and five during 2009, its tax records show, with Frank McCourt as president and Jamie McCourt as vice president. At LACMA, Jamie McCourt is one of 50 trustees, according to a roster on the museum’s website.

Two experts on nonprofit law and governance said they saw no need for any action by the LACMA or USC boards, as long as they are confident that McCourt complies with their own conflict of interest policies, which typically require board members to report any situations where they might stand to gain financially from the institution’s dealings.

At most, said Jack B. Siegel, head of Chicago-based Charity Governance Consulting, and Arthur Rieman, an L.A. attorney specializing in nonprofit law, other boards on which McCourt serves might want to informally remind her about their policies.

LACMA’s Pflaumer said the museum’s trustees make annual disclosures regarding possible conflicts of interest, and affirm that they’ve received, read and understand its policies on ethics and conflicts of interest. The conflict of interest policy, posted on LACMA’s website, warns against “private business or professional activity that would be or appear to be in conflict with the best interests of LACMA, or which would otherwise appear likely to affect adversely the confidence of the public in LACMA’s integrity.”

Lapses or neglect by trustees are not an arcane or merely hypothetical subject on the L.A. art museum scene.

Following an investigation begun in 2005, the attorney general determined that the J. Paul Getty Trust’s board and its former president, Barry Munitz, had misused money for lavish travel, gifts and other perks. Rather than issue sanctions, the attorney general appointed a monitor to ensure that the Getty followed through on promised reforms.

An attorney general’s investigation also ensued from the Museum of Contemporary Art’s financial crisis in 2008. Investigators determined that the museum board for years had violated state law prohibiting spending endowment funds for purposes other than what donors had specified. The attorney general required MOCA trustees to receive special training in their fiduciary duties, and ordered the museum to hire a consultant to advise it on financial improvements.

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-- Mike Boehm