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>see the actual Study: Siegel Report on Financial Issues...
Contact: Nicole Possert
(323) 255-5792; (323) 449-6998 cell
For Immediate Release
Study Shows Autry Gained Control of the Southwest
Museum Using A Misleading Merger Balance Sheet Exposes Gene Autry Museum's
Long-touted $100 Million Endowment Fib
Los Angeles – (March 20, 2008) -- A study released today concludes
that in Merger Agreement documents signed on behalf of the Autry
Western Heritage Museum in March 2003, Jackie Autry, the widow
of singing cowboy Gene Autry, and other officers gave a misleading balance
sheet to the Board of the Southwest Museum that showed the Autry had "current
assets" exceeding $100 million when in reality the Autry had a $98
million Pledge to contribute, payable upon the death of Mrs. Autry.
The study by Mr. Jack B. Siegel of Charity Governance Consulting,
LLC states: “The Autry Museum was not in much better financial
condition than the Southwest Museum once the Pledge is removed from the
analysis. Ignoring the Pledge is appropriate given the fact that a significant
portion of it will not be converted into cash for some two decades when
actuarial tables are taken into account. … Despite the widespread
benefits from increased transparency, the Autry Museum still chooses to
keep the Pledge, its terms and the circumstances surrounding it shrouded
in mystery.”
The report is being released by the Friends of the Southwest Museum
Coalition to bring transparency, better accountability and to
reverse the hypocritical decision-making made by Autry. “The way
in which Autry portrays their business is disingenuous and this study
sheds light on how these glaring discrepancies point to an unscrupulous
approach in their business dealings,” said Nicole Possert, Chair
of the Friends of the Southwest Museum Coalition, a group of about 70
community-based, state-wide, and national organizations concerned about
the museum future of the Southwest Museum, Los Angeles’ first and
oldest museum institution.
Mr. Jack B. Siegel is a nationally respected author and expert on non-profit
financial and governance issues. After studying the merger documents and
other financial papers, he has concluded that the Autry's Merger Balance
Sheet was misleading and not in accordance with generally accepted accounting
principles. Siegel observed that the representations of the Autry may
have induced the Southwest Museum Board, the California Attorney General,
major donors, and various public groups concerned about Autry's sincerity
to fulfill merger promises to allow the merger to proceed when, had the
true nature of the Autry's financial position been known, other options
might have been more thoroughly explored.
"We thought Autry was the ‘cash-rich but collection poor museum’.”
said Possert. “At the time of the 2003 merger, Autry CEO John Gray
re-affirmed this belief by stating that the Autry had a $100 million endowment
gift from Mrs. Autry. It's a completely different story when the 98% of
the gift is just a pledge on paper with a promise to pay 20 or more years
from now. Mr. Siegel’s report now shows how so many people and the
media have been misled by Autry."
Siegel also concluded that while the Autry Museum booked the $100 million
gift, announced in 2000 by Mrs. Autry, as a new asset that plumped up
the Museum's stature in the non-profit world, the Autry Family Foundation,
controlled by Mrs. Autry, booked no liability to pay its $100 million
pledge. According to Siegel, the Autry Family Foundation's tax returns
showed no corresponding liability recorded and only about $17 million
of assets which is not nearly enough to pay the pledge if Mrs. Autry died
unexpectedly.
The study comes at a time when the Autry National Center, the renamed
institution after the merger with the Southwest Museum, is under ongoing
criticism for breaching other terms of the Merger Agreement by failing
to act as a proper fiduciary towards all of the assets of the Southwest
Museum and seeking permits from the city of Los Angeles to relocate the
primary museum use by almost doubling the size of its building on leased
land in Griffith Park.
"It has become abundantly clear," said Possert, "that the
Autry National Center intends to ignore its promises in the Merger Agreement
to maintain the independence of the Southwest Museum institution."
According to Possert, the Autry refuses to fully rehabilitate and continue
use of Los Angeles's first and most historic museum building as the primary
exhibition site of the Southwest's collection, even though a professional
study in 2004 by Brenda Levin and Associates factually concluded that
the entire building could be successfully rehabilitated to museum display
standards for just under $23 million and be economically viable as a museum.
“Autry would rather throw over $100 million into a new building
than invest $23 million into rehabilitating and creating one of the finest
museums in Los Angeles. Anyone interested in fiduciary responsibility
might question that hypocritical decision-making and wonder if the Southwest
Museum merged under false promises from the beginning,” Possert
concluded.
Siegel points out in his report that the Los Angeles City Recreation and
Parks Commission and City Council will be the next group of persons wondering
whether Autry really has the financial capacity to carry out its commitments.
The Autry Museum sits on land in Griffith Park for which it wants to continue
to pay $1 per year under a lease-hold agreement. The current value of
that bargain lease in high-cost Los Angeles is $10.4 million. The City
is being asked to dedicate more scarce parkland resources to the Autry
which amounts to a multi-million dollar additional public subsidy. Siegel
points out those City officials have every right to demand that Autry
make public its pledges and true financial condition before making any
decision about the proposed expansion in Griffith Park. Siegel notes that
while lots of people were enticed by the $98 million of “current
assets” on the Merger Balance Sheet, those receivables were anything
but current.