Since 1954, the Humane Society of the United States has exposed inhumane practices in puppy mills, campaigned against the ivory trade and raised money to find a better home for Keiko, the whale in the movie “Free Willy.” The most influential animal welfare group in the country, it has huge support: Last year, animal lovers gave it $37.6 million.
Today, the two top officers at the society’s Gaithersburg headquarters and a former protege are trading accusations that each has used the society to advance his private financial interests.
Their feud has resurrected a seven-year-old controversy about financial dealings between the society’s leadership and a few members of its board of directors — and advocates for the society worry that it could threaten the group’s most precious asset: its reputation.
The society focuses on animal lovers, including “people living on fixed incomes,” said Sam Bowman, a New York investment banker. Bowman left the society’s board in 1988 after a bitter dispute, which remained largely internal, over some of the financial issues now resurfacing. “These appeals come in about animal abuse, and they send in $5 or $10,” Bowman said. “And then it goes out in ways that one can’t account for.”
Some allegedly went out to David Wills, the former head of the animal cruelty investigations division, according to a lawsuit filed in federal court in Baltimore. The society is suing Wills, contending that he defrauded it of more than $93,000. Chief Executive John Hoyt and President Paul Irwin hired Wills in 1990, against the wishes of some board members.
Hoyt in particular considered Wills a protege, according to them both. But their cordial relationship ended in October, when the society fired Wills for listing personal expenses on his expense account and charging it for payments to “confidential informants” who didn’t exist, the suit asserts. The alleged fraud came to light, according to documents in the court files, when the society began investigating claims that Wills had sexually harassed two women on his staff.
Wills denies all the allegations and has responded with a lawsuit of his own against the society and the women who accused him, saying that he is being defamed and that the society breached its contract with him. Wills’s lawsuit says Hoyt and Irwin knew about his payments to informants and relied on his high-profile investigations to attract donations.
His former mentors, he says, care more about maintaining comfortable lifestyles than helping animals. As examples, he cites their personal financial dealings with board members.
While not illegal, such dealings are frowned upon because they create potential for a conflict of interest between the executive’s personal financial desires and those of his organization. Guidelines from the Council of Better Business Bureaus state, “Charities do not exist to make the people who run them more financially stable.”
Internal Humane Society documents show that, in 1982, Hoyt received a $100,000 interest-free loan from one board member, Irene Evans, and that another, Regina Frankenberg, paid for overseas travel for his wife for several years. Court records in the District show that in 1991 Evans left jewelry worth more than $1,200 to Hoyt’s daughters in her estate.
Fairfax County Probate Court records show that Irwin collected a $15,000 fee in February for serving as an executor of the will of Viola Weber, another board member. All three women are deceased.
The society in the past also bought a home for Hoyt, paid for renovations at a cabin used by Irwin and supplemented their salaries with money identified as “payments to annuitants” made through groups affiliated with the society.
Irwin declined repeated requests for an interview. Hoyt agreed to an interview but specified that he would answer only general questions about the society, not about his financial affairs or the Wills lawsuit.
The financial dealings, which bitterly divided the society’s board previously, will be reopened as an issue next month, when the board is scheduled to discuss Irwin’s executor’s fee, said O.J. Ramsey, chairman of the society’s board.
The society’s current code of ethics — revised after those earlier board divisions — says the board must approve financial relationships between society executives and board members and that any fees must be “promptly reported.” Ramsey learned from a Washington Post reporter that Irwin had collected the executor’s fee and later put the matter on the board’s agenda. “In the normal course of events,” Ramsey said, “there should have been an earlier notification.”
Overall, Ramsey said, the benefits and perquisites Hoyt and Irwin have collected have been only fair compensation for men who guided the group’s growth from 15,420 members in 1976 to about 725,000 today.
Donations grew just as dramatically, particularly during the last seven years.
In 1989, the society collected $7.3 million in direct public support, according to IRS reports; last year, it took in $37.6 million. In the same period, its net assets rose from $22.4 million to $44.8 million.
“Our success under their leadership has been unprecedented,” Ramsey said.
The Humane Society of the United States is an advocacy, education and lobbying group that is distinct from the hundreds of local humane societies running shelters across the country. But there is a connection: The society trains thousands of the shelter workers and frequently gives grants to local groups.
Before they came to the society, Hoyt and Irwin were ministers. Hoyt, 64, arrived in 1970 as president, and Irwin, 59, came five years later, replacing Hoyt, who moved up to CEO.
As the society’s fortunes improved, so did Hoyt’s and Irwin’s, internal and public documents show. For example, the society: Pays each more than $200,000 a year, not including benefits. Hoyt, whose 1976 salary was $45,000, is paid $237,871, according to the society’s 1995 tax returns, putting him at the top of the salary range for nonprofit animal protection executives. Irwin, who made $24,000 in 1976, receives $209,051, according to the same returns.
Provided a home for Hoyt for six years. It bought his house in Germantown from him in 1986 for $310,000 and allowed him to live in it until 1992, when he bought a home in Bumpass, Va., and the society sold the Maryland property for $351,500.
Reimbursed Irwin $85,000 for renovations to a cabin in Maine that he was holding in trust for the society and that he and his family used for vacations. The society sold that property in 1995 for $98,237.
Ramsey said the society had sound reasons for its spending. It hired Hoyt with the understanding that the society would provide a house — a throwback to days when he got free housing as a pastor — said Ramsey, who did not know why it took years to act on that pledge.
The cabin came from a donor who wanted the society to have it but was barred from giving it directly to any organization because of real estate covenants, Ramsey said. Because Irwin hoped the donor would leave the society an even larger bequest, Ramsey said, Irwin bought a leasehold on the cabin and held it in trust for the society, which reimbursed him for renovations. Ramsey said he did not know whether the donor left the anticipated bequest.
The house deals were among several arrangements made during a period of poor communication on the board, Ramsey said. “Some of the directors were unaware” of the financial arrangements, Ramsey said, “and in all candor, there were not good records kept at that time.”
Although Ramsey “felt there was nothing improper at all” in the perks, eight of the 24 board members launched an investigation that polarized the board, according to internal documents.
“The dissidents,” as they came to be known, emerged in 1987 when a staff member leaked to them that the society had bought Hoyt’s house, said former board member Susan Pepperdine, a public relations executive.
The incident hit “when the Jim and Tammy Faye Bakker scandal was going on,” Pepperdine said. Hoyt, she added, “has a very strong sense of feeling entitled to whatever he can get. . . . Our feeling was that since Hoyt got a house, {Irwin} decided he wanted one, too.”
Pepperdine and the other dissidents then discovered the salary supplements, totaling $41,000 for Hoyt and $33,000 for Irwin over three years, according to an outside counsel’s report.
To Hoyt and Irwin, the inquiries were “vicious attacks.” Writing to the board in January 1988, they said every transaction was “done either with the approval of the board of directors or a duly established committee of the board, the approval . . . of its chairman . . . or in the exercising of the administrative authority inherent to our offices.” In another letter to the board later that year, Hoyt wrote, “I regard {the dealings with board member Evans} to be personal and private matters between my wife, myself and personal friends and associates.”
But the dissidents saw improprieties and hired Washington lawyer Gail Harmon to investigate.
In April 1988, Harmon produced a report, obtained by The Post, that concluded that the salary supplements may have amounted to a “wasting of the Society’s assets.” Other transactions, such as the in\terest-free loan, may have diverted money that otherwise would have gone to further the society’s mission, Harmon wrote.
Harmon’s conclusions provoked other board members — less critical of Hoyt and Irwin — to hire Washington lawyer Jacob Stein to prepare a second report. Dated September 1988, it saw the same facts in a more benign light.
Stein wrote, “It is unfortunate that the {society’s} growth was so swift that the needed controls were not in place.” The payment method for the supplements was “unwise,” he wrote. Stein recommended banning personal financial dealings between society employees and board members.
Today, the board has new subcommittees to oversee executive salaries and the budget. Those changes were needed, Ramsey said, and are the legacy of the dissidents.
Thirteen of the members who sat on the board in 1989, including Ramsey, remain. But the dissidents all have left. Some resigned; others, including Bowman and Pepperdine, say the former nominating committee did not invite them back.
The controversy left one more legacy: some members’ doubts about whether Hoyt and Irwin should have hired David Wills. Missteps in Michigan
Wills, a 43-year-old Charlottesville native, has an intense way of talking and obvious confidence in his own charm. Supporters say he has spent his career doing what many advocates only talk about — exposing cruel and inhumane practices. His detractors say his investigations contain exaggerated tales of derring-do.
Wills sees criticism of his work as criticism of his personality: “I’ve never learned to be diplomatic.”
Wills said he has known Hoyt since the 1980s. In fact, Hoyt proposed a merger of the society with the Michigan Humane Society, which Wills headed, in 1989. Hoyt dropped the idea when Wills came in for criticism from some board members.
Both Pepperdine and Bowman, as well as another board member from that time, Gisela Hunnicutt, recall that they had heard reports that the Michigan society was in debt when Wills left and that he had falsified his resume and had a criminal conviction.
Wills admits he faked his resume from 1979, listing journalism degrees from the University of Maryland that he never got. Although he received a bachelor’s degree in philosophy from the University of Michigan in 1984, Wills said, he’d earlier doctored his academic record to mask time he spent in jail and on probation on a 1973 burglary conviction in Charlottesville.
Because he didn’t destroy the resume, Wills said, his enemies circulated it. He said he never used it to land a job, but Audrey Rose, former president of the Michigan board, said she relied on the resume to hire Wills and called a few references. “I never thought of calling the university” or former employers, she said.
In nine years in Michigan, Wills expanded the society’s influence, building three new shelters.
But problems hit. In 1989, a bookkeeper was convicted of stealing $56,000. Some withdrawals bore what looked to be Wills’s signature, briefly putting him under investigation. They were forgeries, Wills said.
No criminal charges were filed against him, but stung by the suspicions, Wills said, he resigned. When he left, the group was $1.45 million in debt, according to a 1989 audit, which traced the debt not to the embezzlement — most of which insurance covered — but to fund-raising that didn’t keep pace with the shelters.
Wills’s next endeavor in Michigan also faced fund-raising problems. The National Society for Animal Protection, which he founded, lasted less than a year, leaving behind four lawsuits and judgments against Wills, his group or both.
The money trouble, Wills said, came because he overspent on salaries — although not for himself — and because “everybody else left me high and dry” on pledges.
Of the legal judgments, $42,500 was awarded to Sandy LeBost, a volunteer who lent Wills money for his group. LeBost considered him a friend and socialized with Wills and his girlfriend at the time, she said. Wills contended that LeBost’s money was a gift and that she had pledged $100,000 to his group but reneged when he did not return her attraction to him.
Today, LeBost describes Wills — who has not repaid her — as “one of the smoothest talkers you’d ever want to meet.” I’m the Guy’
None of the lawsuits had yet been filed when Hoyt and Irwin approached Wills about a job. In his 1990 desk diary, Wills wrote: “Hoyt wants Peace Corps for animals.’ Irwin wants CIA for animals.’ Either case, I’m the guy.”
For a time, Hoyt seemed to agree. Wills’s 1994 employee evaluation shows Hoyt’s praise: “David has helped to develop Humane Society International into an extremely effective international animal protection organization.” HSI is an affiliate of the U.S. society.
Robert Baker, an animal cruelty investigator at society headquarters from 1980 to 1993, said the society had dedicated investigators long before Wills got there. But Hoyt and Irwin viewed their work primarily as a lure for fund-raising, Baker said — and after Wills arrived, that outlook intensified.
“It was all, Make the splash and get the publicity and get the money and don’t worry,’ ” Baker said.
Both Wills and Baker said the society underpaid cruelty investigators. Wills said one reason his relationship with Hoyt and Irwin soured was that he pressed to pay investigators more.
At about the same time, the sexual harassment allegations were taking form. Last August, Washington lawyer Lynne Bernabei delivered a 21-page letter to Hoyt and Irwin on behalf of Virginia Bollinger, an animal cruelty investigator, and Cristobel Block, a legal investigator. The letter, included in court files, paints a lurid picture of unwanted sexual overtures that Wills allegedly made over a two-year period starting in 1993, from kissing and offensive comments to, in Bollinger’s case, nonconsensual sex while she and Wills were traveling on assignment.
Eventually, Block and Bollinger told co-worker Kimberly Roberts about their concerns, the letter said.
As part of her job as program manager for Humane Society International, Roberts prepared Wills’s expense accounts. When the women began looking at records, the letter said, they concluded that Wills was cheating: billing for dinners with people who did not exist, fabricating “expert consultants” and listing payments to informants that were never verified.
Today, those “undercover” payments form the crux of the society’s allegations against Wills, who says that his informants exist and that he will produce them at trial.
Wills’s attorney, Abbe Lowell, dismisses the society’s allegations as attempts to silence a dedicated worker outraged by how little the society spent on animal protection. As for the sexual harassment allegations, Lowell said, “The most vulnerable person in society is a white male who doesn’t know well enough not to date the people he works with.”
These days, Wills says, he is consulting. His former mentor, meanwhile, defends his hiring.
“I had every reason to believe from what I saw and knew of his work that he had the kind of abilities to be an effective investigator,” Hoyt said. Wills’s conviction and his faked resume, Hoyt said, “were very ancient history.”
Hoyt said he feels betrayed by Wills but doesn’t think the turmoil surrounding Wills’s firing should affect public confidence in the society. “We will be judged on the merits of what we do and not on the fact that an employee who was terminated brings charges against us.”
Yet the society’s troubles lately seem to be multiplying. On July 9, Hoyt received notice of a lawsuit filed in Toronto by the Humane Society of Canada, a group the U.S. society regards as an affiliate. That lawsuit asserts that Hoyt and Irwin, among others, transferred $1 million from the Canadian group’s bank account to the U.S. organization without authorization. The suit goes on to claim that the U.S. group took the Canadians’ donor list and grossly overcharged for administrative costs and overhead.
The head of the Canadian group, Michael O’Sullivan, said he regards himself as a friend of Wills, who is a godfather to one of O’Sullivan’s children. O’Sullivan declined to comment on the lawsuit. Roger Kindler, general counsel for the Humane Society of the United States, also declined to comment except to say, “We will defend the suit fully.”
The society’s fund-raising methods also recently have come under criticism from the Council of Better Business Bureaus, which issued an advisory to the public in April saying the U.S. group includes so many appeals for donations in its special reports and other educational materials that it’s impossible to segregate hands-on services from fund-raising.
The council says a nonprofit organization should spend no more than 35 percent of its income on fund-raising, a standard met by about 75 percent of the 350 major nonprofits it reports on each year, spokesman Bennett Weiner said. The council said that in the society’s case, that figure could be as high as 37 percent; the society’s own calculations put it at 18 percent. Thomas Waite, the society’s treasurer, said the bureau’s report was about “a technical accounting issue.”
As animal groups compete intensely for dollars, some society officials fear that controversy could drive away donors.
“All of us involved in the society are obviously disturbed” about the turmoil, said board member Jack Lydman, a retired Foreign Service officer who lives in the District. “I just wish it would go away.”
That doesn’t appear likely. At a pretrial hearing last week in the society’s lawsuit against Wills, U.S. District Judge Andre Davis summed up the tenor of proceedings so far.
“It’s fairly apparent to the court,” he said, “that this case is going to be ugly.” CAPTION: Part of the dispute centers on this house in Montgomery County, where Chief Executive John Hoyt continued living for six years after the Humane Society bought it from him. The board chairman says Hoyt was accustomed to having free housing from his days as a minister. The house has since been resold.
Read the original article at washingtonpost.com here.
