Golden Donors by Waldemar A. Nielsen

Author:Waldemar A. Nielsen [Nielsen, Waldemar A.]
Language: eng
Format: epub
Tags: Social Science, Sociology, General, Philanthropy & Charity
ISBN: 9781351516938
Google: Rx4uDwAAQBAJ
Publisher: Routledge
Published: 2017-07-12T03:27:09+00:00

The Battle Over Trustees’ Fees

In parallel with the running battle over control of Superior Oil and the public sale of its shares, another bitter fight erupted in mid-1982 over the fees taken out of the foundation’s assets by Howard Keck and, until his death, his brother William in their capacity as trustees of the William Keck Trust.

The decree establishing the trust for the benefit of the foundation had become effective in December 1978.

In October 1980 the two, apparently without informing the board of the foundation, submitted a request to the Superior Court of California for fees as trustees of $1 million for the year 1979 plus $150,000 in legal fees to be paid to the firm of Howard’s son-in-law.

The court in mid-1981 reduced their claim somewhat, allowing the two brothers $550,000 in fees and $110,000 in attorney’s costs. Then in July 1982 they requested their fees as trustees for the year 1980. This time they asked for $1,022,448 for themselves and $204,489 for their lawyers.

While the court was considering the request, two enterprising reporters of the Los Angeles Times uncovered the story and inquired of Willametta about her reaction to the fees being requested by her brothers and also about $185,000 in campaign contributions by her brothers to the gubernatorial campaign of Attorney General Deukmejian. She exploded.

The following day the Los Angeles Times story appeared, and Deukmejian, whose office was directly involved in negotiations over the fees to be allowed the Keck brothers, immediately and with some embarrassment returned their campaign contributions.

A week later Deukmejian’s office and the lawyers for the Keck brothers agreed on a mathematical formula for their trustee fees in the future, a formula that allowed them $825,000 for their “services” in the year 1980 plus $190,000 in legal expenses.

At that point Mrs. Day declared herself “outraged by her brothers’ audacity in seeking these outrageous fees” and informed the trustees of the foundation that she intended to submit resolutions at the next board meeting demanding an investigation of the whole situation. She did so, and the board, still dominated by Howard Keck, rejected all of them.

By whatever reasoning the California attorney general’s office may have arrived at its decision concerning the “reasonableness” of the fees it approved, the ordinary citizen in appraising the ethics of Howard Keek’s claims against the charitable assets of the foundation might want to take into account such factors as the following: Keck is himself an immensely rich man with a fortune in the hundreds of millions of dollars; his duties as trustee did not involve more than a few hours of work per year at most; and although he has sought to justify the fees on grounds of the “risk” to which he was exposed in handling the foundation’s finances, his father’s trust specifically absolved him from any such liability.

Indeed, it appears that Keck has been in the habit of supping with a large spoon from the resources of any institution he controls. Until 1982, as CEO of the company, he took

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