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Burning Down the House: The Woodruff Art Center and the Missing Money

The Woodruff Art Center is a well respected art organization and a major cultural player in Atlanta. Comprising the Art Center, The Atlanta Symphony Orchestra and The High Art Museum, Woodruff is a large presence in the South.

Like every other nonprofit art organization it faces challenges in raising enough money to maintain viability. A few years ago it was hit by a scandal that should have shaken it to its core.

As the Atlanta Journal-Constitution reported:

“Former Woodruff Arts employee pleads guilty to embezzlement”

Read the story here:

http://www.ajc.com/entertainment/former-woodruff-arts-employee-pleads-guilty-embezzlement/IWIqwMnrH6UIVGgXsO2STJ/

And the Hoovers have their say here:

https://archives.fbi.gov/archives/atlanta/press-releases/2014/former-woodruff-arts-center-employee-sentenced-for-embezzlement

And here’s an examination of the story and what it means for nonprofits:

http://www.windhambrannon.com/lessons-learned-from-employee-fraud/

But drill down a little deeper and the story begins to cough up some curious issues and generate unanswered questions.

From the Atlanta Journal-Constitution (emphasis added):

“When the center announced last November that it had been defrauded, it said it had been victimized out of $1.438 million. On Tuesday, neither the U.S. Attorney’s Office nor the Woodruff would explain the discrepancy between that amount and the amount cited in Clark’s plea.”

So let’s unpack this: The Woodruff Art Center gets fleeced for nearly $1.5 million even though it only has 13 vendors raising questions not only about the man who ripped-off the center but, also about the quality of…well the quality control exercised by the center in regards to auditing its finances.

And just as importantly it raises another troubling question: Where did the other $400,000 dollars go?

Was it a mistake to begin with? Meaning the incompetence of the Woodruff is worse than what was demonstrated by losing the money to begin with?

Or was the Woodruff covering up another crime or a case of “creative financing” that if revealed would open a very unpleasant can of worms?

And do note the AJC’s use of “would” vs “could” – as in nobody wanted to explain vs the fact they could but…decided to keep their mouths shut instead.

Far be it for The Ink to cast aspersions but let’s consider that the boss of the Woodruff Art Center has a background in one of the more creative territories of American business.

Virginia Hepner came over to the Woodruff from Wachovia Bank because when you think performing arts quite naturally you think of a massive bank that was, it turns out, up to its eyeballs in laundered Mexican drug money.

Hepner bio:  https://www.woodruffcenter.org/About-Us/People/Virginia-Hepner

Wachovia and drugs: https://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs

There is absolutely no evidence that we are aware of linking Hepner to laundering money. Except that she was working for a company with the ethics of…well a drug lord’s accountant which, it turns out, is exactly what Wachovia was.

Weasels, the late and dearly missed Hunter S. Thompson, would have said, stick together until they get hungry, the drugs run out and the fast food joints are closed.

Did the Woodruff stop for a moment to consider that Wachovia was ethically radioactive and had a business culture dominated by moral hermaphrodites? Apparently, and sadly, the answer appears to be yes, so they hired Hepner and no doubt would say she was in a completely different department and had no connection what-so-ever to the blood and cocaine soaked wads of cash floating through Wachovia’s servers.

And of course Wernher Von Braun had nothing to do with the nasty bitz he was only doing research. That’s why his autobiography was titled: I Aim for the Stars…

And as a wit put it: and it should have been subtitled: But sometimes, I hit London.

But not to worry, displaying the wisdom for which they are famous, The Woodruff has found Hepner’s replacement:

http://artsatl.com/news-doug-shipman-replace-virginia-hepner-ceo-woodruff-arts-center/

And what does a few minutes of digging on the internet reveal? That Doug comes from the same slime pit as Hepner. As a former employee of Boston Consulting tells it in relating his work for the international beast:

“What did surprise me was the offer BCG made to me as I was on the way out the door. In exchange for me signing an agreement, BCG would give me the rough equivalent of $16,000 in UAE dirhams. Much of it looked boilerplate, like any common compromise agreement used in Europe — in return for some money, I would stipulate that I hadn’t been discriminated against on the basis of race or gender, etc.

But the rest was very clearly a non-disclosure agreement, and it made me uncomfortable. I signed a non-disclosure agreement when I first took the job, but that only covered BCG’s intellectual property and client identities, things that seemed entirely reasonable to protect. This agreement went much further. Not only did it bar me from making any disparaging comments about BCG or my work experience, but I wouldn’t even be allowed to reveal the existence of the non-disclosure agreement itself. The implication was clear: I could either be a cheerleader for BCG or stay silent, but anything else would bring swift legal retribution. When I asked to have the non-disclosure clauses removed, I was told that the agreement was a standard offer to employees, and that its terms were non-negotiable.”

Read the whole article here:

http://tech.mit.edu/V130/N18/dubai.html

and for another perspective on the veracity of the article see this:

http://www.ianfraser.org/the-story-bcg-offered-me-16000-not-to-tell/

In other words Doug comes from a “culture” that breeds conformity, loose morals and situational ethics all in the name of…

And let’s be proactive – Doug & Co. will point out all the “good works” his former consulting company has done…but let’s be clear – in the world of Nonprofit fundraising…it’s all about the Benjamins.

Sure they put on concerts for kids, and help incarcerated and at risk youth. And only a savage would dismiss the cultural significance of classic music.

Just don’t look behind the curtain.

So, to review: the Woodruff has sloppy accounting, gets ripped-off, can’t explain a nearly half-million dollar discrepancy in what it reports and what it has, utilizes a CEO with a colorful management background, weathers the negative PR and replaces the former banker with a man who comes from a consulting group that is to the arts as Al Capone was to community organization.

Terrific.

The arts in America are in good hands. They’re being looked after by people for whom the following always seems to apply:

“When I hear the word culture, I reach for my gun”

Or in the case of the Woodruff and the Chicago Symphony Orchestra…they reach for someone’s credit card. In the case of the CSO…just make sure you actually gave permission for them to use it…

Next: The Woodruff branches out and purchases a for-profit fundraiser…

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