Two Schaefer Foundation trustees seek to oust third

(Sun photo by Chiaki Kawajiri )
July 28, 2011|By Laura Vozzella

William Donald Schaefer wanted three people — a friend, an aide and a lawyer — to lead the charitable foundation created in his name. Two of the three apparently have other plans.

Years before his death in April, Schaefer designated Gene Raynor, his friend of 50 years; Lainy LeBow-Sachs, a longtime aide; and Zelig Robinson, his personal and campaign attorney, to serve as trustees for the William Donald Schaefer Foundation.

The foundation, intended to make grants for neighborhood projects, charities and nonprofits, is just getting down to business now that it stands to inherit an estimated $1.3 million from the former Baltimore mayor, governor and comptroller’s estate. And it seems that LeBow-Sachs and Robinson would like it to do so without Raynor.

Robinson sent Raynor a letter this month notifying him of the board’s first meeting. Along with typical organizational-meeting fare like “Elect officers” and “Adopt Bylaws,” the agenda listed something that caught Raynor by surprise: “Reduce the number of Trustees serving on the Board of Trustees from three to two.”

LeBow-Sachs would be elected president of the board, according to a draft of board resolutions that Raynor provided to The Baltimore Sun. Robinson was to be elected treasurer and secretary. Raynor would be out.

The board wound up postponing the July 21 meeting without voting on reducing the number of trustees. But the effort to remove Raynor has upset some longtime Schaefer friends, including former U.S. Rep. Helen Delich Bentley, who called it “outrageous.”

“They should consider the intent of William Donald Schaefer,” said Raynor, the former city and state elections chief. “If they love him so much, follow his intentions. … I don’t think they have the authority to kick me off the board.”

However, he added that he doesn’t think he can stop Robinson and LeBow-Sachs if they want to remove him.

While foundations often add or eliminate board members over time, it seems odd to seek the removal of a donor-appointed trustee before the organization even has its first meeting, said Henry Berman, CEO of the Washington-based Association of Small Foundations.

“He was starting with three [trustees] and here’s the three he chose,” Berman said. “That’s a pretty compelling case for scratching your head and saying, ‘Why is this person being dismissed?'"

Experts in nonprofit organizations also expressed concern about a potential conflict of interest because Robinson said he and other members of his law firm, Thomas & Libowitz, are serving as the foundation’s legal counsel.

Justin Pollock, chief operating officer of Maryland Nonprofits, a state association of nonprofit organizations, said a board with only two trustees is too small, particularly if one of the two is doing paid work for the foundation. (Presumably the work is paid, since another Thomas & Libowitz lawyer, Charles B. Jones, declined to comment when asked if his firm was working pro bono. He also declined to say whether that work would be a conflict of interest.)

Robinson “can’t vote to engage himself, and with a board of two, that leaves only one other person to make that decision,” Pollock said. “That’s a substantial decision to be made by a single individual.”

When asked about the plan to remove Raynor, Robinson initially said there was none.

“One of those [agenda] items was not that Gene Raynor would be dropped,” he said.

That was technically true: The agenda did not name Raynor; it only said that the number of trustees would be reduced from three to two. But a page of resolutions proposed for adoption indicates that LeBow-Sachs and Robinson would be the two.

Asked about that, Robinson said he could not comment because in addition to serving as a trustee, he is the foundation’s lawyer, and commenting would violate attorney-client privilege. Another resolution called for a vote to approve Thomas & Libowitz as the foundation’s counsel. But it is not clear if the board took that vote.

Robinson declined to say if the board had met or voted on the matters. Nor would he discuss why he and LeBow-Sachs might want to eliminate Raynor from the board.

LeBow-Sachs, a senior vice president at Kennedy Krieger Institute, did not return phone messages seeking comment. But Jones responded on her behalf.

Jones said the board did not take any action and that, for the time being, Raynor remains trustee.

“What I can say is, the foundation will be handled in a legal fashion and votes will be taken in a legal way,” Jones said.

The foundation intrigue comes on top of revelations that Schaefer’s current will, signed in 2009, differs substantially from one he’d had drawn up in 2005.

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