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Eminent Domain and the Barnes
Robert Zaller
Eminent domain, or:
Stripping the house that Barnes built
ROBERT ZALLER
Eminent domain, my legal dictionary says, is “the right of the state or sovereign to take private property for public use.” Derived originally from Norman feudal tenure, in which all property was held from the king, it is in modern times a mark of sovereign authority. The Fifth Amendment to the Constitution recognizes it, subject only to the payment of “just compensation” to the dispossessed owner. The state, of course, defines what is just.
Public use is a slippery concept. Eminent domain has typically been invoked for such projects as road-building and slum clearance. Private interests-— developers, railroads, the highway lobby— have effectively defined public use since the founding of the Republic. Lately, however, the abuse of eminent domain has attracted considerable attention. In Kelo v. The City of New London (2005), the U. S. Supreme Court held that the government may condemn private property directly on behalf of private interests, with no pretext of public benefit other than a vaguely defined expectation of economic development and consequent revenue enhancement. In the Kelo case, homes were to be torn down to create space for a shopping mall. The justices’ august wisdom was not popular, and movements began in several states, including Pennsylvania, to protect property from unjustified seizure.
Pennsylvania itself, however, has taken the next logical step in the evolving usurpation of property rights. It has permitted a consortium of private interests to effectively exercise a power of eminent domain, with the blessing of the courts, the governor, and the Attorney General’s office. The consortium consists of the Pew Charitable Trusts, the Annenberg Foundation, and the Lenfest Foundation, and their object of prey is the Barnes Foundation. The Barnes, say Pew et al., is an asset for community development, wasted (and wasting) in the wilds of Lower Merion, but a dollar machine if moved to the Ben Franklin Parkway. The public interest cannot but be served by rescuing its masterworks from their sylvan retreat and putting them on display in an urban pillbox. Tourists will flock; tax dollars will flow. All that is necessary is to condemn some property, in this case some prettily painted pieces of canvas. It won’t be destroyed— only advantageously relocated. The building that housed it won’t be torn down— well, not necessarily, or at any rate not yet— only gutted.
Where are the cops?
I might say with equal plausibility that the contents of Fort Knox would be more advantageously housed in my backyard than in Tennessee. The problem is that I can’t convey billions of dollars of assets to my own private use without a proper title to them. Not unless my name is the Pew Charitable Trusts.
Normally, if someone breaks into your house and takes your goods, the police won’t hold the door for him as he walks out. But if you’re the eighth largest foundation in the country, the cops will help you load up the truck.
That’s exactly what has happened in the case of the Barnes. Willful mismanagement rendered the Barnes vulnerable to a hostile takeover, and the Pew was more than ready to play the part. All that was needed was a go-ahead from the courts: the eminent domain part. That there was even a contested proceeding was due only to the heroic efforts of the Barnes’ students to get legal standing in the matter. They were given only enough to stand by helplessly as Montgomery County Orphans Court Judge Stanley Ott, exchanging pleasantries with the Barnes board’s attorney Arlin Adams, his erstwhile colleague on the bench, waved the “petitioners” on through.
High-priced talent, low-quality preparation
Not enough attention has been paid to this judicial travesty. The Orphans Court exercises oversight of charitable trusts, and possesses power to alter their terms and application in accordance with the legal principle of least deviation. This principle states that the terms of a trust should be altered only to the extent necessary to enable them to carry on the trust’s intended purposes. Beyond this, the attorney general exercises “broad supervisory authority over all property committed to charitable purposes through decedents’ estates, trusts, foundations,” and other associations and devisements. This authority is the common law power of parens patriae, and it requires, by Pennsylvania law, that the attorney general be “a party of record to every proceeding affecting a charitable trust.”
How did these agencies discharge their responsibilities in the matter of the Barnes Foundation? Despite a high-priced legal team furnished by the Pew, the Barnes trustees came before the court in December 2003 so poorly prepared that Judge Ott ordered them to reframe their petition. When they returned, months later, they claimed that the $2.5 million annual deficit they were running compelled them to seek the greener pastures of Center City. But an audit disclosed that the actual deficit was less than half that amount, and the “plan” they put forward to restore solvency entailed a permanent yearly deficit of $4.5 million.
The attorney general’s silence
The attorney general’s office, in the person of Lawrence Barth, sat silent throughout the proceedings, made not a single representation on behalf of the trust, lodged not a single objection to the petitioners’ grand scheme to overturn it in its entirety, and indeed asked not a single question of them or their lawyers. Reader, believe it, for I was there. Barth’s sole effort on behalf of the indenture of trust of Dr. Albert C. Barnes was to ask the students and their supporters for a protest button to decorate his office. Parens patriae.
The arguments Mr. Barth should have put forward were all contained in the students’ amicus brief, presented to the court on September 30, 2004. Noting that the actual deficit disclosed by the auditors invalidated the entire premise of the petitioners’ case, it pointed out that no other remedies— including an increase in attendance levels and admission charges— had been seriously canvassed, nor had any serious fund-raising been attempted. (The then-director of the Barnes, Kimberly Camp, responded under questioning by the students’ attorneys that she did not know and could not estimate the amount of moneys raised by the Barnes Foundation in the previous fiscal year.) Barth offered no comment on the amicus brief.
Please note that the court had originally denied the students full legal standing on the grounds that the trust was represented by the attorney general. Judge Ott himself observed in his January 2004 ruling that “The attorney general . . . had an absolute duty to probe, challenge and question every aspect of the monumental changes under consideration. . . . [Yet] the attorney general did not proceed on its authority and even indicated its full support for the petition before the hearings took place. . . . The course of action chosen by the Office of Attorney General prevented the court from seeing a balanced, objective presentation of the situation, and constituted an abdication of that office’s responsibility.”
Nevertheless, Judge Ott continued to deny the students full legal standing. He might also have appointed a trustee ad litem to challenge the petitioners. This, too, he did not do. Instead, he chose to allow proceedings to continue in the absence of the “balanced, objective presentation” self-evidently required by the “monumental changes under consideration.”
The fix was already in
A bit of background may help explain the strange passivity, not to say manifest bias, of the Attorney General’s Office. In the General Assembly session of 2001, four Senators, including then-President Pro Tem Robert Jubelirer and Philadelphia’s own powermeister Vince Fumo, introduced legislation to authorize $100 million for moving the Barnes Foundation to Philadelphia (Senate Bill 1213, page 244). This was more than two years before the Barnes trustees appeared in court requesting permission for such a move, and while Director Camp was still publicly stating that the Barnes was committed to staying in Merion. The fix, in short, was already in.
The deal being hatched— not by the Barnes trustees but behind their backs by powerful political and moneyed interests— nearly foundered because it entailed expanding the board from five to 15 members. The five original trustees (four of five of whom were chosen by Lincoln University), naturally resisted this plan, because it would have isolated them and diluted their influence. Then-Attorney General Mike Fisher thereupon brokered a deal in which Governor Rendell promised $50 million for two new a
Stripping the house that Barnes built
ROBERT ZALLER
Eminent domain, my legal dictionary says, is “the right of the state or sovereign to take private property for public use.” Derived originally from Norman feudal tenure, in which all property was held from the king, it is in modern times a mark of sovereign authority. The Fifth Amendment to the Constitution recognizes it, subject only to the payment of “just compensation” to the dispossessed owner. The state, of course, defines what is just.
Public use is a slippery concept. Eminent domain has typically been invoked for such projects as road-building and slum clearance. Private interests-— developers, railroads, the highway lobby— have effectively defined public use since the founding of the Republic. Lately, however, the abuse of eminent domain has attracted considerable attention. In Kelo v. The City of New London (2005), the U. S. Supreme Court held that the government may condemn private property directly on behalf of private interests, with no pretext of public benefit other than a vaguely defined expectation of economic development and consequent revenue enhancement. In the Kelo case, homes were to be torn down to create space for a shopping mall. The justices’ august wisdom was not popular, and movements began in several states, including Pennsylvania, to protect property from unjustified seizure.
Pennsylvania itself, however, has taken the next logical step in the evolving usurpation of property rights. It has permitted a consortium of private interests to effectively exercise a power of eminent domain, with the blessing of the courts, the governor, and the Attorney General’s office. The consortium consists of the Pew Charitable Trusts, the Annenberg Foundation, and the Lenfest Foundation, and their object of prey is the Barnes Foundation. The Barnes, say Pew et al., is an asset for community development, wasted (and wasting) in the wilds of Lower Merion, but a dollar machine if moved to the Ben Franklin Parkway. The public interest cannot but be served by rescuing its masterworks from their sylvan retreat and putting them on display in an urban pillbox. Tourists will flock; tax dollars will flow. All that is necessary is to condemn some property, in this case some prettily painted pieces of canvas. It won’t be destroyed— only advantageously relocated. The building that housed it won’t be torn down— well, not necessarily, or at any rate not yet— only gutted.
Where are the cops?
I might say with equal plausibility that the contents of Fort Knox would be more advantageously housed in my backyard than in Tennessee. The problem is that I can’t convey billions of dollars of assets to my own private use without a proper title to them. Not unless my name is the Pew Charitable Trusts.
Normally, if someone breaks into your house and takes your goods, the police won’t hold the door for him as he walks out. But if you’re the eighth largest foundation in the country, the cops will help you load up the truck.
That’s exactly what has happened in the case of the Barnes. Willful mismanagement rendered the Barnes vulnerable to a hostile takeover, and the Pew was more than ready to play the part. All that was needed was a go-ahead from the courts: the eminent domain part. That there was even a contested proceeding was due only to the heroic efforts of the Barnes’ students to get legal standing in the matter. They were given only enough to stand by helplessly as Montgomery County Orphans Court Judge Stanley Ott, exchanging pleasantries with the Barnes board’s attorney Arlin Adams, his erstwhile colleague on the bench, waved the “petitioners” on through.
High-priced talent, low-quality preparation
Not enough attention has been paid to this judicial travesty. The Orphans Court exercises oversight of charitable trusts, and possesses power to alter their terms and application in accordance with the legal principle of least deviation. This principle states that the terms of a trust should be altered only to the extent necessary to enable them to carry on the trust’s intended purposes. Beyond this, the attorney general exercises “broad supervisory authority over all property committed to charitable purposes through decedents’ estates, trusts, foundations,” and other associations and devisements. This authority is the common law power of parens patriae, and it requires, by Pennsylvania law, that the attorney general be “a party of record to every proceeding affecting a charitable trust.”
How did these agencies discharge their responsibilities in the matter of the Barnes Foundation? Despite a high-priced legal team furnished by the Pew, the Barnes trustees came before the court in December 2003 so poorly prepared that Judge Ott ordered them to reframe their petition. When they returned, months later, they claimed that the $2.5 million annual deficit they were running compelled them to seek the greener pastures of Center City. But an audit disclosed that the actual deficit was less than half that amount, and the “plan” they put forward to restore solvency entailed a permanent yearly deficit of $4.5 million.
The attorney general’s silence
The attorney general’s office, in the person of Lawrence Barth, sat silent throughout the proceedings, made not a single representation on behalf of the trust, lodged not a single objection to the petitioners’ grand scheme to overturn it in its entirety, and indeed asked not a single question of them or their lawyers. Reader, believe it, for I was there. Barth’s sole effort on behalf of the indenture of trust of Dr. Albert C. Barnes was to ask the students and their supporters for a protest button to decorate his office. Parens patriae.
The arguments Mr. Barth should have put forward were all contained in the students’ amicus brief, presented to the court on September 30, 2004. Noting that the actual deficit disclosed by the auditors invalidated the entire premise of the petitioners’ case, it pointed out that no other remedies— including an increase in attendance levels and admission charges— had been seriously canvassed, nor had any serious fund-raising been attempted. (The then-director of the Barnes, Kimberly Camp, responded under questioning by the students’ attorneys that she did not know and could not estimate the amount of moneys raised by the Barnes Foundation in the previous fiscal year.) Barth offered no comment on the amicus brief.
Please note that the court had originally denied the students full legal standing on the grounds that the trust was represented by the attorney general. Judge Ott himself observed in his January 2004 ruling that “The attorney general . . . had an absolute duty to probe, challenge and question every aspect of the monumental changes under consideration. . . . [Yet] the attorney general did not proceed on its authority and even indicated its full support for the petition before the hearings took place. . . . The course of action chosen by the Office of Attorney General prevented the court from seeing a balanced, objective presentation of the situation, and constituted an abdication of that office’s responsibility.”
Nevertheless, Judge Ott continued to deny the students full legal standing. He might also have appointed a trustee ad litem to challenge the petitioners. This, too, he did not do. Instead, he chose to allow proceedings to continue in the absence of the “balanced, objective presentation” self-evidently required by the “monumental changes under consideration.”
The fix was already in
A bit of background may help explain the strange passivity, not to say manifest bias, of the Attorney General’s Office. In the General Assembly session of 2001, four Senators, including then-President Pro Tem Robert Jubelirer and Philadelphia’s own powermeister Vince Fumo, introduced legislation to authorize $100 million for moving the Barnes Foundation to Philadelphia (Senate Bill 1213, page 244). This was more than two years before the Barnes trustees appeared in court requesting permission for such a move, and while Director Camp was still publicly stating that the Barnes was committed to staying in Merion. The fix, in short, was already in.
The deal being hatched— not by the Barnes trustees but behind their backs by powerful political and moneyed interests— nearly foundered because it entailed expanding the board from five to 15 members. The five original trustees (four of five of whom were chosen by Lincoln University), naturally resisted this plan, because it would have isolated them and diluted their influence. Then-Attorney General Mike Fisher thereupon brokered a deal in which Governor Rendell promised $50 million for two new a
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