Saturday, September 5, 2009

More on Executive Compensation

The Boston Globe reports that Massachusetts Attorney General Martha Coakley unveiled plans to closely scrutinize executive compensation in the state's nonprofit health care sector.  This is interesting for a couple of reasons.  First, it seems to belie what I often tell my Nonprofit Law students about the lack of scrutiny of nonprofit organizations at the state level.  In my home state of North Carolina there are plenty of laws and reporting requirements on the books, but no one in state government seems to pay attention unless an enterprising newspaper reporter sniffs out a scandal.  In contrast, Massachusetts has a history of holding nonprofits' feet to the fire.

Second (and I realize this second point may partly contradict the first), it raises the question whether such intensified scrutiny of nonprofits is tied to political ambition.  When I was practicing law in Boston in the early '90s, the then-Attorney General Scott Harshbarger spearheaded a high-profile effort to examine compensation and conflicts of interest in Massachusetts' educational nonprofit sector.  Harshbarger landed some big fish, including the then-President of Boston University, John Silber.  If memory serves, Harshbarger wasin the process of lining himself up for a run for governor at the time.  It may or may not be a coincidence that Martha Coakley's plans to rein in nonprofits coincides with her announcement that she is seeking the United States Senate seat left open by Ted Kennedy's passing.  

I have heard it said that the initials A.G. stand for "aspiring governor."  Is that why Massachusetts nonprofits are coming under scrutiny at this particular time, or is it merely evidence of a rare state that takes its monitoring responsibilities seriously?


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