Bernard Kerik’s Unusual Philanthropic Management Practices
What is there in the word "philanthropy" that reads "plunder" in the view of some political leaders? In the story of the ongoing and really terribly sad professional disintegration of Bernard Kerik, a tax exempt foundation serves as the venue for the current investigations earning the former NYPD Commissioner unwanted headlines.
When Kerik was commissioner of the City's Department of Correction and later as Police Commissioner, he also ran the New York City Correction Foundation, serving as its President. During Kerik's watch, the sole authorized signatory for the Foundation, one Frederick Patrick, managed to loot the foundation of $137,000 (or at least that's what prosecutors were able to get him to cop to). A rising star in the City's law enforcement bureaucracy, Patrick was at one point also commissioner for juvenile justice and the Police Department's deputy commissioner for community affairs. According to prosecutors, the thieving foundation honcho Patrick used part of his swag for phone sex with Riker's Island jail inmates.
Kerik was shocked, shocked! that such things would be happening to the Foundation during his watch.
Oops, but there was more, reports of another bit of money missing from the Foundation, maybe $800,000, perhaps as much as a cool million. Apparently, one of the Foundation's sources of money was from rebates on overpriced cigarettes sold to jail inmates (obviously, the New York City Correction Foundation was not much focused on inmates' health and longevity). The mission seems to have been spent on something, but it isn't clear exactly what. Foundation spokespersons (presumably no longer Patrick who went to jail in 2004 and got out in July of 2005) said it paid for holiday parties for inmates and "promotional videos", though evidence, records, and receipts for the expenditures seem to be difficult if not impossible to locate. Promotional videos for the jails? Come again?
Apparently, according to Newsday's Ellis Henican, one foundation board member quit when the treasurer, the aforementioned Patrick, refused to produce financial reports. Not Kerik, who blissfully floated abve the scandal in his foundation.
Ultimately, in Kerik's case, he seems to have channeled Rick Santorum's sense of foundation oversight, ethics, and stewardship, which we covered here in the DMI Blog. Remember Santorum's explanation to an incredulous Don Imus that despite his being the founder and chair of the Operation Good Neighbor Foundation, the Pennsylvania Senator really didn't know much about his own charitable institution, didn't engage in even basic oversight of its operations, and basically showed up only for the photo ops of handing out checks to delighted nonprofits. When challenged about his protege Patrick's dipping into the foundation kitty, Kerik reportedly claimed a defense befitting Santorum's style of philanthropic management: Why should the president of a charitable foundation know what's going on in the place?
Claiming an undocumented nanny problem, Kerik withdrew his name as a leading candidate to be President Bush's Secretary of the Department of Homeland Security. It seems like more than a nanny problem was in play here. In his autobiography, Kerik compared himself to his rigorously ethical Police Commissioner predecessor, Teddy Roosevelt. Pardon us, but without even standing Roosevelt up next to Kerik's other personal and professional peccadillos, there's no way that TR would have countenanced the lackadaisical, slipshod purported philanthropic operations of Kerik's New York City Correction Foundation.
As the press plumbs the nooks and crannies of Kerik's NYPD track record, other items related to charity and philanthropy have emerged: reports of using $3,000 in Police Foundation funds to manufacture 30 busts of the then NYPD commissioner to be handed out as mementos; reports of a questionable law enforcement support group, the Federal Law Enforcement Foundation, headed by a Milstein Properties bigwig, providing top floor Battery Park City apartments for Kerik and his chief of staff; reports of his being extra nice to publisher Judith Regan in return for her nearly $500,000 contgribution to the New York Police and Fire Widows and Orphans Fund.
There are almost Shakespearean tragic dimensions to Kerik's downward spiral from 9/11 hero to disgraced former Homeland Security nominee. But he might have sidestepped some of the problem if he had realized that foundation presidents like himself, just like the EDs and chairs of other 501(c)(3) nonprofits, are responsible for how the charitable funds entrusted to their stewardship are used. It's a matter of public trust, and Kerik looks like he's failing that trust.