Getty Trust Update

On several prior occasions, I have reported on the problems facing the Getty Trust.  For the latest developments, see Edward Wyatt and Randy Kennedy, California Attorney General Appoints Overseer of Reforms at J. Paul Getty Trust, NY Times, Oct. 3, 2006.

Here are some excerpts from this report:

Ending a 14-month investigation, the California attorney general appointed an independent monitor on Monday to oversee reforms at the J. Paul Getty Trust, one of the world’s richest cultural organizations. The inquiry determined that the trust’s former president, with the approval of the Getty board, misspent trust money on his wife’s travel, used employees for personal errands and made improper payments to a graduate student.

Although the attorney general, Bill Lockyer, found that the former president and the board violated their legal duties, he declined to take civil or criminal action against them. The report stated that the misuse of funds did not result from fraud and that the value of a settlement between the former president, Barry Munitz, and the trust exceeded the value of the losses from any improper payments. * * *

Notably, the attorney general found that a number of actions by Mr. Munitz that were approved by the board were consistent with the trust’s charitable purposes. These included sending a staff member to Israel to observe an academy for chess, a game that is one of Mr. Munitz’s favorite hobbies; furnishing the office of a former Getty Trust executive at another Los Angeles County arts institution; and sponsoring a luncheon at which Mr. Munitz was given an award. * * *

It is the first time that the California attorney general has imposed an independent overseer in an enforcement action against a charitable trust, although the procedure has been used in consumer settlements, including one this year with Ameriquest Mortgage Company after an investigation into allegations of predatory lending practices.