Saturday, May 14, 2005

Intrigue And Irregularities At St. Paul's Boarding School

The Internal Revenue Service has taken an interest in the elite New Hampshire boarding school. It seems that something isn't quite right:

It is unclear what piqued the I.R.S.'s interest in St. Paul's, though some alumni and parents have objected to the administrators' pay, the school's investments and what they call cozy business dealings.

"The I.R.S. has requested information from St. Paul's School related to the 2001-2002 tax year," said Michele Clark, a spokeswoman for the school, in Concord. "The business office has cooperated fully and provided the information requested."

Usually, scandals in the rarefied world of exclusive tax-exempt institutions don't become public knowledge. But this time was different:

The school's board learned of the inquiry in a November e-mail message from John K. Greene, who is chairman of its audit committee. Though Mr. Greene asked board members to destroy the message, some did not and an alumnus recently received a copy and informed The New York Times.

In his e-mail message, Mr. Greene said the I.R.S. audit was to cover the fiscal year that ended June 30, 2002. I.R.S. auditors were to meet with Michelle Chicoine, the school's chief financial officer, on Dec. 20.

Incredibly, a member of this school's "Ole Boys Club" actually informed the media of these improprieties. We can just imagine the finger-pointing and recriminations among the alumni. Notifying the press just isn't done among the boarding school set.

Concerning compensation for certain employees, who says that there aren't any profits to be made in a nonprofit organization?

The agency is conducting a study of compensation practices among nonprofits and has promised to examine those groups in which administrators are paid unusually well.

Craig B. Anderson, the Episcopal bishop who is St. Paul's rector, and Sharon D. Hennessy, its vice rector, agreed to a 10 percent pay cut in the year that began July 1, 2004, after Mr. DeLucia began his inquiry.

In the year that ended June 30, 2004, Dr. Anderson received $502,394 in compensation and benefits, or 4.7 percent less than the previous year, and Dr. Hennessy received $321,269 in compensation and benefits, 1 percent more than the previous year.

The rector's total compensation and benefits today are twice what they were when he took the job almost eight years ago.

Of course both Bishop Anderson and Ms. Hennessy didn't forget to take care of the relatives:
For the first time, the school disclosed in its latest tax return that it was paying the rector's wife, Lizbeth, $39,158 in compensation and benefits for her work as a rectory associate. It also paid Dr. Hennessy's husband, Gary, $40,332, for his work as a special events assistant, and Ms. Chicoine's daughter, Sarah Goldman, $3,116 for summer work.
This institution is supposed to be a nonprofit organization. As such, it enjoys exemption from federal taxation.

It would seem to us that Bishop Anderson, Ms. Hennessy, and assorted relatives have been raking in some pretty fat profits indeed.

Annual tuition and fees for St. Paul's School are $33,900. This does not include books, materials, travel, athletic equipment, and laundry services.

Amazingly, St. Paul's qualifies as a charity under New Hampshire law.
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