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Latest ruling on the Barnes move (Part 1)
Robert Zaller
Justice mocked:
Judge Ott's latest ruling on the Barnes move
ROBERT ZALLER
First of two articles.
The doctrine of “standing” is meant to keep frivolous, time-wasting suits out of court by requiring potential litigants to show a legitimate interest in the matter at hand. It can also be used to deny such interests a hearing. That is what has happened to the latest efforts by the Friends of the Barnes Foundation, students of the Barnes and Montgomery County to reopen the case of the Barnes move from Merion to the Parkway. Montgomery Orphans’ Court Judge Stanley R. Ott, the Great Enabler of the Barnes heist, has refused to hear proposals from the county that would, at no cost to the taxpayer, have made the Barnes solvent in Merion and thus obviated the alleged necessity to move it to Philadelphia.
To understand how cynical Ott’s latest decision is, one must go back to his ruling in December 2004 that granted permission to move. Under state law of that time and in accordance with the provisions of the Barnes trust itself, anyone with a broadly defined “public interest” in the Foundation was entitled to bring violations of the trust to judicial attention. During hearings over whether to allow the world tour of Barnes holdings of 1993-95, Ott’s predecessor, Louis Stefan, granted full standing to Barnes students opposed to the tour. This set an appropriate precedent for Ott, who willfully ignored it. He gave the students only the weakest possible standing, that of amicus, or friends of the court. This denied them the opportunity to compel discovery, present evidence, and make counter-proposals.
Ott’s ruling would have been less damaging had Pennsylvania’s attorney general, whose office has statutory oversight and responsibility for charitable and educational enterprises such as the Barnes, played an appropriate adversarial role in court. But the Attorney General did not play such a role. Instead…
“The Attorney General did not proceed on its authority and even indicated its full support for the petition [to move the Barnes] before the hearing took place. . . . the Attorney General’s Office merely sat as second chair to counsel to the Foundation, cheering on its witnesses and undermining the [Barnes] students’ attempts to establish their issues. The course of action chosen by the Attorney General prevented the court from seeking a balanced, objective presentation of the situation and constituted an abdication of the office’s responsibility.” [Emphasis added]
This devastating critique of the attorney general’s performance came not from some diehard opponent of the move, but from Judge Ott himself. It came not at the end of the proceedings but at the beginning of a nine-month adjournment ordered by the court to give the Barnes’s attorneys time to regroup and present a minimally competent case.
The trustees’ fiscal recklessness
At this point, of course, Judge Ott could have taken matters into his own hands. Seeing the fiscal recklessness with which the Barnes trustees had spent the Foundation into chronic deficit and apparent insolvency— including multimillion-dollar legal fees in a suit against the Barnes’s neighbors and Lower Merion Township— and seeing as well the obvious dependency of the Foundation on a self-interested outside party (the Pew Charitable Trusts), Ott might have appointed a special master to review the Foundation’s finances and take control of its operations. This would have been all the more obvious a remedy given the gross bias toward, not to say evident collusion between, the attorney general and the petitioners and sponsors of the move.
Ott might have conducted an investigation on his own of the relations among the attorney general, the trustees and the consortium of philanthropies— including not only the Pew but the Annenberg and Lenfest foundations— so eager to promote the move and certify its necessity. He would not have been unaware of the fifty-year legal vendetta conducted by Walter Annenberg against the Barnes trust, or the fact that the trust strictly precluded any involvement by the Philadelphia Museum of Art, whose board chair was Gerry Lenfest, in the affairs of the Barnes Foundation.
The deficit was vastly overstated
These are things that Judge Ott could have done, but did not. He did order an examination (not an audit) of the Barnes Foundation’s books. This examination, by a firm with its own ties to sponsors of the relocation, revealed that the actual operating deficit of the Barnes was not the $2.1 million claimed by the trustees, but $1.0 to 1.2 million. (A later examination of the Federal 990 tax forms filed by the Foundation revealed that the actual deficit, as certified by the Barnes, had never been as high as $1 million in any year after 2000, and in 2003, the year the petition for the move was filed, was all of $15,000.)
What this information told Judge Ott was the same thing it would have told you and me. The trustees had overstated the Foundation’s actual deficit, and therefore perpetrated a fraud upon the court. If their manifest recklessness, delinquency and incompetence hadn’t been sufficient grounds for removing them from control of the Barnes Foundation, their blatant effort to deceive Ott himself would have mandated it.
Can you see what’s coming next?
A curious coincidence
Judge Ott did not rebuke or penalize the petitioners, let alone remove them from control of the Foundation. But where, in fact, did that specious $2.1 million deficit figure come from?
As part of the petitioners’ plan to move, the Pew had agreed to put up a permanent endowment of $50 million, whose annual income would have been just about enough to fund such a deficit. As the students’ attorneys pointed out, with an actual deficit only half or less the sum claimed, an endowment of $20-25 million would do the same job. Even without a capital campaign, the Foundation could raise such a sum simply through the sale of assets unrelated to its educational mission and unprotected by its trust.
Not only did Ott reject such a proposal out of hand, but he also mandated that the full $50 million endowment be part of any adjudication. In other words, the Barnes did not need the $50 million, but it was going to get it anyway; and, by coincidence, the Pew Charitable Trusts alone were pledging such a sum.
Strange future projections
One would think that Judge Ott’s excess of caution would mean that the finances of the move would be airtight. But the plan he approved involved an ambitious three-campus model— the construction of a new facility in Philadelphia to house the permanent Barnes gallery collection, the retention of the Merion estate as an administrative base and a horticultural center, and the development of the 137-acre Ker-Feal farm in Chester County as a center for early American art— which presupposed a best-case annual shortfall of $4.5 million.
In other words, an alleged deficit of $2.1 million, put forward to justify moving the Barnes but only half that in fact, was actually to be doubled (and the real deficit quadrupled), not for a period of transition but in perpetuity. Even these numbers depended on an annual draw of 200,000 visitors in Center City (later raised to 250,000), based on 70 hours a week of public access. No art institution in Philadelphia other than the Art Museum draws more than about 60,000 visitors a year; no museum in the world stays open ten hours a day, seven days a week.
The number of studies produced to support even these dire estimates? None. To all intents and purposes, the figures were simply plucked out of thin air. Even at that, what they represented was simply a formula for bankruptcy. A third-grader could have done the math. Judge Ott, the king of his Alice in Wonderland courtroom, apparently read all plus signs as minus, and all minus signs as plus.
Where were the adversaries?
The judiciary is our last line of defense against tyrannical usurpation or abuse of the public interest before we reach for pitchforks and muskets. But the Barnes hearings of 2003-04, which resulted not only in Judge Ott’s granting permission to move the Foundation but also in his approving a plan to expand its board with Pew-nominated trustees, had to raise a question.
If there was no adversarial presentation in Judge Ott’s court, it was because he wanted it that way. If there was no discovery, which would have revealed the scandalous collusion of Governor Rendell, the legislature, and the attorney general concerning the move, it was because Judge Ott forestalled it. If there was no consideration of alternatives to the move, it was because he precluded any.
To read Part 2, which considers the 2007-08 hearings before Judge Ott, click here.
Judge Ott's latest ruling on the Barnes move
ROBERT ZALLER
First of two articles.
The doctrine of “standing” is meant to keep frivolous, time-wasting suits out of court by requiring potential litigants to show a legitimate interest in the matter at hand. It can also be used to deny such interests a hearing. That is what has happened to the latest efforts by the Friends of the Barnes Foundation, students of the Barnes and Montgomery County to reopen the case of the Barnes move from Merion to the Parkway. Montgomery Orphans’ Court Judge Stanley R. Ott, the Great Enabler of the Barnes heist, has refused to hear proposals from the county that would, at no cost to the taxpayer, have made the Barnes solvent in Merion and thus obviated the alleged necessity to move it to Philadelphia.
To understand how cynical Ott’s latest decision is, one must go back to his ruling in December 2004 that granted permission to move. Under state law of that time and in accordance with the provisions of the Barnes trust itself, anyone with a broadly defined “public interest” in the Foundation was entitled to bring violations of the trust to judicial attention. During hearings over whether to allow the world tour of Barnes holdings of 1993-95, Ott’s predecessor, Louis Stefan, granted full standing to Barnes students opposed to the tour. This set an appropriate precedent for Ott, who willfully ignored it. He gave the students only the weakest possible standing, that of amicus, or friends of the court. This denied them the opportunity to compel discovery, present evidence, and make counter-proposals.
Ott’s ruling would have been less damaging had Pennsylvania’s attorney general, whose office has statutory oversight and responsibility for charitable and educational enterprises such as the Barnes, played an appropriate adversarial role in court. But the Attorney General did not play such a role. Instead…
“The Attorney General did not proceed on its authority and even indicated its full support for the petition [to move the Barnes] before the hearing took place. . . . the Attorney General’s Office merely sat as second chair to counsel to the Foundation, cheering on its witnesses and undermining the [Barnes] students’ attempts to establish their issues. The course of action chosen by the Attorney General prevented the court from seeking a balanced, objective presentation of the situation and constituted an abdication of the office’s responsibility.” [Emphasis added]
This devastating critique of the attorney general’s performance came not from some diehard opponent of the move, but from Judge Ott himself. It came not at the end of the proceedings but at the beginning of a nine-month adjournment ordered by the court to give the Barnes’s attorneys time to regroup and present a minimally competent case.
The trustees’ fiscal recklessness
At this point, of course, Judge Ott could have taken matters into his own hands. Seeing the fiscal recklessness with which the Barnes trustees had spent the Foundation into chronic deficit and apparent insolvency— including multimillion-dollar legal fees in a suit against the Barnes’s neighbors and Lower Merion Township— and seeing as well the obvious dependency of the Foundation on a self-interested outside party (the Pew Charitable Trusts), Ott might have appointed a special master to review the Foundation’s finances and take control of its operations. This would have been all the more obvious a remedy given the gross bias toward, not to say evident collusion between, the attorney general and the petitioners and sponsors of the move.
Ott might have conducted an investigation on his own of the relations among the attorney general, the trustees and the consortium of philanthropies— including not only the Pew but the Annenberg and Lenfest foundations— so eager to promote the move and certify its necessity. He would not have been unaware of the fifty-year legal vendetta conducted by Walter Annenberg against the Barnes trust, or the fact that the trust strictly precluded any involvement by the Philadelphia Museum of Art, whose board chair was Gerry Lenfest, in the affairs of the Barnes Foundation.
The deficit was vastly overstated
These are things that Judge Ott could have done, but did not. He did order an examination (not an audit) of the Barnes Foundation’s books. This examination, by a firm with its own ties to sponsors of the relocation, revealed that the actual operating deficit of the Barnes was not the $2.1 million claimed by the trustees, but $1.0 to 1.2 million. (A later examination of the Federal 990 tax forms filed by the Foundation revealed that the actual deficit, as certified by the Barnes, had never been as high as $1 million in any year after 2000, and in 2003, the year the petition for the move was filed, was all of $15,000.)
What this information told Judge Ott was the same thing it would have told you and me. The trustees had overstated the Foundation’s actual deficit, and therefore perpetrated a fraud upon the court. If their manifest recklessness, delinquency and incompetence hadn’t been sufficient grounds for removing them from control of the Barnes Foundation, their blatant effort to deceive Ott himself would have mandated it.
Can you see what’s coming next?
A curious coincidence
Judge Ott did not rebuke or penalize the petitioners, let alone remove them from control of the Foundation. But where, in fact, did that specious $2.1 million deficit figure come from?
As part of the petitioners’ plan to move, the Pew had agreed to put up a permanent endowment of $50 million, whose annual income would have been just about enough to fund such a deficit. As the students’ attorneys pointed out, with an actual deficit only half or less the sum claimed, an endowment of $20-25 million would do the same job. Even without a capital campaign, the Foundation could raise such a sum simply through the sale of assets unrelated to its educational mission and unprotected by its trust.
Not only did Ott reject such a proposal out of hand, but he also mandated that the full $50 million endowment be part of any adjudication. In other words, the Barnes did not need the $50 million, but it was going to get it anyway; and, by coincidence, the Pew Charitable Trusts alone were pledging such a sum.
Strange future projections
One would think that Judge Ott’s excess of caution would mean that the finances of the move would be airtight. But the plan he approved involved an ambitious three-campus model— the construction of a new facility in Philadelphia to house the permanent Barnes gallery collection, the retention of the Merion estate as an administrative base and a horticultural center, and the development of the 137-acre Ker-Feal farm in Chester County as a center for early American art— which presupposed a best-case annual shortfall of $4.5 million.
In other words, an alleged deficit of $2.1 million, put forward to justify moving the Barnes but only half that in fact, was actually to be doubled (and the real deficit quadrupled), not for a period of transition but in perpetuity. Even these numbers depended on an annual draw of 200,000 visitors in Center City (later raised to 250,000), based on 70 hours a week of public access. No art institution in Philadelphia other than the Art Museum draws more than about 60,000 visitors a year; no museum in the world stays open ten hours a day, seven days a week.
The number of studies produced to support even these dire estimates? None. To all intents and purposes, the figures were simply plucked out of thin air. Even at that, what they represented was simply a formula for bankruptcy. A third-grader could have done the math. Judge Ott, the king of his Alice in Wonderland courtroom, apparently read all plus signs as minus, and all minus signs as plus.
Where were the adversaries?
The judiciary is our last line of defense against tyrannical usurpation or abuse of the public interest before we reach for pitchforks and muskets. But the Barnes hearings of 2003-04, which resulted not only in Judge Ott’s granting permission to move the Foundation but also in his approving a plan to expand its board with Pew-nominated trustees, had to raise a question.
If there was no adversarial presentation in Judge Ott’s court, it was because he wanted it that way. If there was no discovery, which would have revealed the scandalous collusion of Governor Rendell, the legislature, and the attorney general concerning the move, it was because Judge Ott forestalled it. If there was no consideration of alternatives to the move, it was because he precluded any.
To read Part 2, which considers the 2007-08 hearings before Judge Ott, click here.
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