Philanthropy Watchdog Asks IRS to Investigate Otto Bremer Foundation

WASHINGTON, July 30, 2014 /PRNewswire-USNewswire/ -- In response to ongoing suspicious, and potentially illegal, behavior of the three trustees of Minnesota's Otto Bremer Foundation, the National Committee for Responsive Philanthropy (NCRP) urges the IRS to investigate and take action if needed.

Aaron Dorfman, executive director of the D.C.-based watchdog group, detailed his organization's findings in a letter to Tamera Ripperda, IRS director for exempt organizations. NCRP's analysis was prompted by an incident in early June, when Otto Bremer Foundation trustees S. Brian Lipschultz, Charlotte Johnson and Daniel Reardon pushed out the executive director in a restructuring of the organization. A further examination of IRS tax records by NCRP showed this ousting was only the latest in a series of troubling decisions, inducing the watchdog group to call for an investigation by the Minnesota Attorney General.

Dorfman's letter highlights the lack of accountability and fiduciary oversight in the new structure that gives the foundation's three trustees complete control of the organization's nearly $800 million in assets. It also notes the 1000 percent increase of trustee compensation over the past 10 years, even as the country was struggling to cope with the recession. In 2013 alone, the trustees received more than $1.2 million from the foundation, compared to the $24,000 median trustee compensation among the country's largest foundations.  

"You must move aggressively if you hope to protect [the] public trust as well as the legacy of Otto Bremer, a man who established his foundation to 'assist people in achieving full economic, civil and social participation in and for the betterment of their communities,'" writes Dorfman.

The trustees of the foundation, which holds 92 percent of Bremer Bank stocks, also receives payment for their roles with the bank. Further, in recent years, the foundation has also significantly increased its legal fees. Dorfman speculates whether this is to create the legal justification for the jump in compensation. He asks, "Given the millions involved, another question begs to be answered: Are the trustees diverting other foundation assets for personal enrichment?"

The Minnesota Attorney General's office is unable to confirm if it is launching an investigation of the Otto Bremer Foundation.

The full text of the letter to the IRS is available on http://www.ncrp.org/files/Aaron_Dorfman_letter_to_Tamera_Ripperda.pdf.

The National Committee for Responsive Philanthropy in Washington, D.C. is a national watchdog, research and advocacy organization that promotes philanthropy that serves the public good, is responsive to people and communities with the least wealth and opportunity, and is held accountable to the highest standards of integrity and openness. Visit www.ncrp.org.

SOURCE National Committee for Responsive Philanthropy