‘Questions of conflicts of interest are not unknown at Carnegie (Hall)’

Very thoughtful piece on the Carnegie Hall board wars by Russell Platt in the New Yorker.

Sample:

Questions of conflicts of interest are not unknown at Carnegie. The last big one occurred in 2007, when the hall awarded the son-in-law of Sanford I. Weill, the board chairman at the time, a multimillion-dollar contract to renovate Carnegie’s tower studios into rehearsal rooms and educational spaces. Weill’s involvement in the appointment of Perelman—who, upon becoming chair, pronounced that he wanted to bring more pop acts to Carnegie—was also pivotal. To calm the ensuing controversy, Weill told Bloomberg News that in naming Perelman, a notoriously aggressive and litigious corporate raider, to the chairman’s post, the public would “see a nicer, kinder, less litigious Ron than you’ve seen in the past.” Now we know how that worked out. 

Read the full article here. The only element missing is the personal animus between Perelman and Blavatnik – something both of them should have clarified before the chairmanship was settled.

 

carnegie hall interior

 

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  • I very much appreciate Platt’s article. It’s not terribly common for American arts journalists to so candidly address problems with America’s private donor system. His comments are rational, measured, and important. One of his views, however, troubles me:

    “But the reluctance of Gillinson and his staff to provide detailed information about profits and losses of particular concerts to Perelman and the board is entirely justified: if artists’ fees (which are often extremely high) at such a prominent venue as Carnegie were distributed to board members, the information would find its way to the Internet in a matter of days.”

    Carnegie Hall is a non-profit, which is defined as an organization serving the public interest. If we do not know in fairly close detail how they spend their money, including artists’ fees, how can we know they are serving the public interest? Far too many of the salaries and fees paid by non-profits have become unnecessarily exorbitant. Our society needs to rethink this problem and create new Federal and State legislation to insure that our non-profits genuinely serve the public interest. The first step is for the public to be well-informed about what these fees and salaries are. Enough with fat cats secretly stuffing their pockets with the money of our public charities.

  • I really dislike reading such ill-informed pieces as the one by Russell Platt in the New Yorker. Before simply rehashing what has already been reported, he might try to inform himself on the history of U.S. philanthropy to add some genuine insight. I suggest he begin by reading Historical Perspectives on Nonprofit Organizations in the United States
    by the late Peter Dobkin Hall (http://www.hks.harvard.edu/fs/phall/Herman-CH1.pdf). He might also research the requirements for governance of 501(c)(3) organizations. The Attorney General’s Office certainly has. Mr. Platt’s conclusions may be a little more measured.

    • There’s an irony in “A Met Fan” commenting on the nature of philanthropy. The Met’s budget of $320 million is twice as much as comparable houses in Europe, even though cities like London, Paris, Vienna, and Munich also have very high costs of living. (And of course, crowing that the Met is better than those houses is ridiculous. The Vienna Philharmonic, for example, is the pit orchestra of the Vienna State Opera.)
      The Metropolitan Opera disclosed last June, as reported by the WSJ, that its general manager, Peter Gelb, earned a total of $2.1 million in salary and benefits in 2013

      See: http://www.wsj.com/articles/metropolitan-operas-general-manager-made-2-1-million-in-2013-1434139629

      In 2009, Carnegie Hall paid Clive Gillinson $800,000. By 2015 it was $2,235,308 – an increase of 180%.

      In 2011, the four top stagehands at the Metropolitan Opera earned more than $500,000 each in total compensation (including retirement and other benefits.)

      Carnegie’s five full time stage hands average more than $400,000 each.

      Five stage hands at the David H. Koch Theater make more than the paid highest ballet dancer.

      For documentation of these numbers see: http://www.nytimes.com/2013/12/28/arts/hey-stars-be-nice-to-the-stagehands-you-might-need-a-loan.html?_r=0

      The USA is the only developed country in the world to use a private funding system for the arts. These numbers show how dysfunctional it has become. Legislation is needed to correct these problems with non-profits. And most importantly, our anachronistic private funding system needs to be replaced with public systems which are much better at cost control.

      • Stagehands’ compensation is covered by IATSE (union) contracts which include longevity, benefits, overtime and the fact that they are on-call for everything that goes on in the house. Comparing their union-negotiated compensation with that of CEOs’ is a bit disingenuous.

        • Odd how there’s not a single theater or opera house in Europe that has to pay stage hands $400,000 per year — or even half that amount. Americans are so special…

  • Thank you Russell Platt for a piece that shows some understanding of the arts and their dependence on recruiting trustees who understand the culture of the arts, and know where their expertise begins and ends.

  • I was interested in the reference to Clive Gillinson’s salary increase, so I have just checked the Carnegie Hall 2013 990 for the year referred to above, and this is what it says: His salary was $929,440 with a total reported compensation package of $2.2 million. Column 3 reported for that year includes $1,083,200—a one-time-only amount tied to a retirement plan that vested in that year, which I assume has to be reported as taxable income? Sometimes useful to check the facts?

    • I’m sure we all wish we had close to a million dollar a year salary, and could cash in another million from a retirement plan after ten years at work. And let’s pay the stage hands $400,000 per year. Truly in the spirit of a non-profit…

  • As Paul Krugman recently reported, last year the bonuses paid by the Wall Street Banking industry wwere twice the total income of all minimum wage earners in the entire country. See:

    http://www.businessnewsmedia.net/article/4191308344/wall-street-bonuses-and-america-s-minimum-wage-earners/

    One can quibble over the numbers but the larger picture remains. Our non-profits, which are mostly controlled by the wealthy, seem to follow in this ethos. In 2006, for example, Philippe de Montebello was given a $3.25 million bonus to recognize his 30-year service to the Metropolitan Museum of Art. One can only dream of what that money might have done for educational programs in a city where nearly half the people live in poverty. See:

    http://www.huffingtonpost.com/2014/04/30/nyc-poverty_n_5240355.html

    I hope arts journalists will continue to take a closer look at what is going on with our non-profits. Something stinks, and no one is talking about it.

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