Saturday, July 26, 2008

Shriners Look At - But Don't Deal With - Financial Improprieties

In Friday's New York Times, Stephanie Strom reported about the findings of an investigative committee created by the Shriners of North America and the Shriners Hospitals for Children.  Much of the report from the committee focused on allegations surrounding the refusal of an employee to hire a particular direct-mail fundraiser.  The committee found that the chairman of the board of trustees of the Shriners, Ralph Semb, tried to fire a Shriners fund-raising employee who refused to hire a direct-mail company Mr. Semb and Gene Bracewell, another board member, wanted the employee to hire.  The company appeared to have close ties to a company headed by the son of a close friend of Mr. Bracewell.  That company, Vantage, had done some fundraising work for the Shriners in the past and the results were unsatisfactory.  In a campaign that raised $46.2 million, the Shriners received only $2.5 million. 

The committee recommended that Mr. Semb and Mr. Bracewell be reprimanded for a breach of the Shriners' conflict of interest policy and ethics policy, but the Board declined to take any action penalyzing the two men.  The two men deny any wrongdoing.

The committee had intended to investigate financial improprieties alleged by a longtime financial executive, but the Board disbanded the committee before the committee completed its investigation.  At the Shriners' annual meeting, a discouraged member of the committee told Shriners that they should expect an investigation by an Attorney General or the IRS.


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