Wednesday, May 25, 2016

Nice work if you can get it.

Other than sitting around reading, I can’t think of an more ideal profession than working for a foundation. The thought of giving all that money to all those worthy causes, getting to play a real live Michael Anthony, who fronted for John Beresford Tipton on the 1950’s TV show The Millionaire…Well, what could be more fun?

Sure, you’d have to turn down many worthy causes, but think of how much fun it would be to filter out the true unworthies, the charlatans, the faux causes.

Thus it is that, when I have a PowerBall ticket in my possession, I spend time fantasizing about the foundation I would set up, and how I would dispense my largesse. I would not, of course, have to take any compensation, as I would have cagily reserved enough of the lottery winnings to set myself and those near and dear to me up for life.

This is not very likely to happen, of course, but – just in case – I will be going out and buying a PowerBall ticket later today.

Anyway, my secret and unlikely to be fulfilled career goal came to mind when I saw an article by Sacha Pfeiffer in the Boston Globe on a fellow who’d gotten himself appointed trustee to a private foundation. Mark Avery was no relation to May and Stanley Smith, whose charitable trusts he worked for. But he got his position as a trustee the old fashioned way. He inherited from his father.

Between his compensation – way back in 2003, when the Globe’s Spotlight Team did a series on trusts, Avery made $600K a year, plus legal billings (milk that cow!) – and his spending habits, Avery did quite well for himself vis a vis the Smith trusts, which together were worth $500M. But then Avery managed to burn through $52M from one of the Smith trusts. And it took him just six months. How did he manage that feat?

Avery’s blizzard of spending in 2005 included purchasing an air charter company (despite having no background in aviation), Gulfstream executive jets, World War II military aircraft, Czech fighter planes, helicopters, rocket launchers, a patrol boat, and a yacht. He also paid off more than $600,000 in personal debt and bought a $700,000 home. (Source: Boston Globe.)

And here, for your viewing pleasure, is what a $500K patrol boat looks like:


Avery won’t be needing it where he’s going. Which is the hoosegow. For 13 years.

[Ass’t US Attorney Steven] Skrocki and others launched a federal investigation in 2005, and discovered that Avery had persuaded his two fellow trustees — now dead, but at the time in their 70s and “medically challenged” — to “loan” him $52 million in Smith funds. Avery told them he planned to use the money to start an aviation company that would be used for trustee travel, according to court documents.

An aviation company for trustee travel. I see.

Instead, he went wild, making extravagant purchases that prosecutors said “did nothing” to benefit the trusts. Within months, the company was crumbling, Avery was on the cusp of bankruptcy, and the $52 million was gone

Avery would probably have been okay if he’d been content with his pittance of a trustee salary, and whatever he could wave the way of his law firm.  After all, another Smith trustee, Ruth Collins, appears happy with the $125K she draws for 10 hours of work each week. Plus a slight add on:

Her Corte Madera, Calif., company, Adminitrust, billed the Smith trust nearly $1.3 million in 2014 for “trust administration.”

This kind of self-dealing is actually legal, so you’d think Avery might have been a happy camper with his salary plus legal compensations. But it’s the old story. Avery just got greedy.

Now in my PowerBall-funded foundation, all will be on the up and up.

Once I go, whoever’s left holding the bag will get paid for their work. Up to an on the up and up point. Mostly, they’ll get paid to wind the thing down and pay the thing out.

No patrol boats, no Czech fighter planes. Just make some worthy causes happy. A list will be provided, with a few blank spots so that my trustees can add their own favorites. I’ll give them two years to close things out. A year to recover from their profound grief over my untimely demise which, whenever it happens, will no doubt seem untimely – at least to me. And a year to enjoy playing Michael Anthony to my John Beresford Tipton. Have at it!

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