UPDATE – STUART WACHS HAS REPLIED TO THIS ARTICLE. PLEASE SEE STUART’S 2 EMAIL REPLIES TO ME AT THE BOTTOM OF THIS ARTICLE. – MY REPLY TO STUART’S EMAIL WILL BE IN GREEN INK – INLINE WITH HIS EMAIL REPLIES.
Although I am not 100% certain of this, it seems to me that if the Jewish Community wants better results from the JCA, then maybe the community should be focused on a quantitative analysis of the performance of our leaders. I would think that this is a reasonable and necessary yardstick by which we can measure performance. There is too much at stake for the community to resort to ad hominem attacks that, in the words of Stuart Wachs, the President of the JCA, “do nothing to help.”
Mr. Wachs recently wrote to me, voicing an opinion about my article about the solar panel disaster that the leadership of the JCA did not disclose to the community, which will result in $2,000,000 in excess cost to the JCA (directly contradicting Bob Silver, the Chairman of the JCA at the time, in the two interviews that he gave to the Jewish News. In each interview, Mr. Silver indicated that the solar panel project would cost the community nothing). The blog post can be accessed by clicking here. Mr. Wachs’ well-reasoned reply to my post is below:
From: Stuart Wachs <email@example.com>
Subject: Re: Greetings
Date: April 27, 2014 at 2:30:03 PM MST
To: Mark Greenburg <firstname.lastname@example.org>
Clearly you are not the honest person you portray yourself to be. Even knowing your history of blogs against the organization I took over I responded including a willingness to meet and answer your questions / concerns. Then I see the blog you put out with you doing exactly what you are accusing the JCA of doing. Giving out miss or partial information.
I have dedicated my career to Jewish community and have always been honest, ethical and focused on impact of the community I was serving. Your damaging words do nothing to help and you could not even give me the benefit of the doubt as the new leader of the organization to address your questions as I said I would do.
As Mr. Wachs pointed out in his reply, my article is incorrect because: a) he believes I am dishonest, b) he offered to answer my questions, and c) he is a dedicated servant of the Jewish Community (now with a current salary of more than $240,000 per annum), therefore, there is no solar panel power disaster at the JCA.
In fact, I received a phone call from the JCA’s Board Chairman Joel Kramer today (05/02/14) and he informed me that I was wrong to publish the article about the solar panel problem because the report that was prepared for the board was meant to be confidential. Mr. Kramer said to me:
Just to let you know, you are a very bright guy, and I’m sure you can think of a number of reasons why things might be confidential and they’re confidential for a reason, and that reason isn’t not to be transparent. That reason isn’t not to be transparent. That reason has to do with other things related to the issues. And again, I am sure you are a very bright person, but just because things are issued as confidential isn’t intended because it is not intended for the masses because of other reasons, not because the masses can’t, it is because the masses shouldn’t or can’t know now, because what other things are going on, and….. There is a reason for it, and it does not help publicizing that reason and it does us no good. There is no benefit to the parties to publicize that…
I was, and still am confused by just about everything that Mr. Kramer told me, and it was very nice for him to compliment my intelligence, and everyone certainly appreciates a compliment. But the one thing I took away from our conversation was his insistence that the reason for the confidentiality of the solar fiasco report was that, as he put it, the masses should not know about this or can’t know now. When I asked him why, I was just told that there are reasons. The only possible reason to sit on this information would be if there are pre-litigation settlement discussions (with the parties that induced the JCA leadership to enter into this solar fiasco) and the solar company is afraid of publicizing any settlement paid to the JCA. Nevertheless, the JCA would have to disclose the inbound money from such a settlement on their Form 990, and Mr. Kramer assured me that there was no litigation over this solar panel fiasco, just as he so eloquently put it, the masses must not know.
In analyzing Mr. Wachs’ performance as a dedicated leader, one must start at the health club organization where he worked before arriving at the newly formed JCA. Mr. Wachs previously served as the Executive Director of the Jewish Community Center of Greater Minneapolis. Although I have not asked anyone who was a member of the search committee which selected the JCA’s new President, I must give the committee the benefit of the doubt, err on the side of caution, and assume that no one on that committee had access to the internet and therefore was unable to access the IRS 990’s of the organization that Mr. Wachs was leading. Their IRS 990’s are available and online, going back as far as Mr. Wachs’ 7 year tenure in this position. The data for this chart is available on line and located by clicking here.
So, for the seven years that Mr. Wachs was at the helm of the Jewish Community Center for Greater Minneapolis, the organization had cumulated deficits of more than $2,000,000. I did subtract from these figures, a onetime gift of property and equipment from the Jewish Federation of Minneapolis in an amount equal to 2.8 million dollars, in 2007. For whatever reason, a gift of property and equipment to a non-profit was taken as income, instead of as paid in capital as it would be to a for-profit enterprise, and I suppose that this is correct because since they are not paying taxes and since they have no equity holders, it is immaterial from a tax liability standpoint. It is not immaterial when masking the performance of a non-profit’s operations.
So, it looks like that after serving as the executive director of the JCC of Greater Minneapolis and presiding over more than $2,000,000 in operating deficits that this qualified Mr. Wachs to become the new president of the JCA of Greater Phoenix.
I am not sure that it is completely true that the best indicator of anyone’s future performance can best be indicated by their past performance, so I think that we should take a look at our JCA today.
I retrieved the 2012 IRS 990 yesterday by visiting the JCA. They were very courteous and gave me a copy within ten minutes, It is the first time I visited their offices and their staff was very polite and professional. If my recent memory serves me correctly, the purpose for uniting the JCC and the Federation was to improve the financial performance of both institutions. Unfortunately, the numbers indicate that this has not yet happened. The chart below shows that the loss, once the JCC and JFED were combined, increased 67% in the first year to more than $967,000 dollars, increasing from a combined loss the year before for the two institutions of $577,480. I find the chart below to be completely revealing.
While the most recent deficit in 2012 of $967,436.00 cannot fairly be attributed to any one person, I do think that the definition of insanity is doing the same thing over and over again and expecting a different result. I am wondering where are the benefits we are supposed to see from the consolidation of these two organizations. I have no quantitatively analytic reason to believe Mr. Wachs will be effective in running the JCA. I do know that he just added another $967,000 to his aggregate losses as the President or Executive Director of the non-profit organizations that he has run over the last eight years, losses that aggregate at over $3,000,000 dollars.
One of the most interesting aspects of the phone call I had with Mr. Kramer was when I asked him what the purpose of his call to me was. Mr. Kramer indicated that Mr. Wachs had showed him a response that he was prepared to send to me, and that after speaking with Stuart Wachs, Mr. Kramer said to Stuart that he wanted to know,
What is Mark’s purpose in all of this? Because I am not sure an exchange is worthwhile for any party until we understand the purpose of his blogs and his writings. Is there an end game, is there an intention, is there a purpose, or just a desire to write.
When I told Mr. Kramer I did not understand his question, specifically what he meant by what was the purpose of my blog, he said,
You are posting blogs, and the purpose of the blog is to what?
I am still at a loss about this question because I think that their question is irrelevant. However, I do not think the reason that they asked the question is irrelevant because it demonstrates a paranoia in their thinking as if I must have a hidden agenda in writing the blog. Rather than dealing with the issues I have raised regarding transparency, accountability and sound financial management or addressing the fact that I am asserting that their stewardship of these sacred Jewish assets can be quantified as abysmal, they seem to focus on me, thinking that if they just uncover my secret SMERSH membership card, that all of this mess will blow away.
My last questions to Mr. Kramer – Stuart and the JTO
It is reasonable that people have differences of opinion about whether the JTO is good or bad. Years ago I supported the JTO, took advantage of the 1 for 1 tax credit, and took the deduction. After discovering an issue with the governance of the JTO, I stopped giving, voiced my concerns publicly, and the JTO changed their governance policies. I still believe that they have a short distance to travel before they are 100% Simon Pure and Lily White, and the fact that there are board members of the JTO whose children are benefitting from JTO scholarships raises a few eyebrows, but they are a paragon of virtue and financial disclosure compared to the JCA. Also, and by law, they must pay out in scholarships 90% of the money they raise. So if one supports the JTO, it is clear that by and large they are doing the job they are supposed to be doing and Linda Zell should be commended on that point.
I have been given a brief tour of the JTO’s donor list, and from what I have seen, Stuart Wachs did not give to the JTO in 2012 or 2013, and I have asked him why, and I know he has seen my email (because Mr. Kramer told me that he saw Stuart’s reply and that is why he was calling me, to find my “purpose”). I still do not have his answer, and we as a community are entitled to know why. This is especially relevant because Mr. Wachs just published a Commentary in the Jewish News, (in response to criticism about the fact that 46 cents of every allocable dollar that is donated to the JCA is wasted by expenses, expenses that will most likely be hidden from “the masses” that Mr. Kramer spoke to me about), and Wachs implored “the masses” to support the JTO. Because it is clear from Mr. Kramer that he and Stuart are not members of “the masses”, the JTO deduction would obviously not apply to Stuart Wachs and his $240,000 salary.
Do you remember that great scene in A Few Good Men when Jack Nicholson explodes at Tom Cruise? If you don’t remember the scene, it is worth watching and you can see it by clicking here. This is your JCA.
My final comment is this. Mr. Kramer explained to me that Stuart is a very busy executive and in a dismissive way indicated that it takes too much time to write a response to what I have written. I explained that I had no desire to pull Mr. Wachs away from his obligations in training for this weekend’s marathon, and Mr. Kramer scolded me for being sarcastic. I am sorry if I offended Mr. Kramer, but as a member of “the masses”, my etiquette, education and the manner in which I conduct myself obviously needs improvement. I promise to get to work on that.
THE FIRST EMAIL REPLY TO THIS ARTICLE FROM STUART WACHS
From: Stuart Wachs
Sent: Saturday, May 3, 2014 5:38 AM
To: ‘Mark Greenburg’
Cc: Joel Kramer
Subject: RE: Good evening
There is in fact a number of things that are inaccurate in your blogs and in your email. That is the problem when you take partial pieces of information and make the assertions which you made.
– I do contribute to the JTO to the highest tax credit level. I do not believe that this is accurate and I will not be able to retract this until I see cancelled checks or credit card receipts for the two years in question.
– The Solar project will not cost the Association or community anything. When I arrived here I discovered a problem with the current structure and we worked closely with the Solar company for many months to restructure the arrangement so that it will not have any negative impact on the organization or community Why would Mr. Kramer call me yesterday and wax on eloquently about the fact that the masses are not to be told about this problem because it does the parties no good, if there is no problem? I do not believe this assertion, but I am more than willing to sit down with you and have you explain this to me, and if I am wrong, I will also print that I am wrong.
– In your most recent blog you attacked my record at the Minneapolis JCC. If you called any of their board leadership or the Minneapolis Federation leadership they will tell you I was applauded for turning around the organization from a mission, engagement and financial perspectives. If you go directly to guidestar and look at the financial performance my last three years the 990’s show a net operating results 2009 – ($114,000), 2010 – $119,000, 2011 – $263,000. The search committee did do extensive checking and referencing on me.
– As for operating results of the VOS JCC, Federation and now Association. Both of these organizations have had a number of years of poor financial performance. I agree, the operations of the JFED and the JCC were disgraceful and I applaud your candor in this admission. Why are the board members who oversaw this disgraceful performance still on the board? Is it that they do not understand what you have written here about the past performance? What can they possibly add that will be helpful to you in your attempt at turning this devastated agency around? How does their expertise in wasting the community’s assets help you do your job? I was brought in to help turn them around as I have been successful at doing at previous agencies. A turn around does not happen in one or two years, can take significant initial investment and we are making some positive progress. Or measurement will be over the next 3 to 5 years in net operating results, campaign achievements, engagement and impacts on our community.
– I would be happy to walk through our financials and our financial modeling. While your comment about charity review and others looking for a 10% “overhead” is not at all accurate, as a matter of fact they (who is “they”) came out a few years ago in a public statement that overhead is not an accurate way to measure a not-for-profit. Our operating budget includes much more then overhead however as we add resources to grow campaign and impact the community, our campaign growth will greatly outpace any expense growth and the percentage of our operating budget to campaign will decrease. It is important to also understand that the Association raises other dollars and has other earned income outside of the campaign so simply taking the operating expenses as a percentage of the campaign total is not an accurate measure.
Your latest blog was again done in an inaccurate and attacking way now directed at Joel Kramer and myself. This is not correct and I have very accurate notes of my conversation with Joel Kramer from the call he placed to me. I completed classes in court stenography when I was 16 at the Ohio Valley Business College as a way to cope with my very slow and illegible hand writing and I take very accurate notes. If Mr. Kramer was not forthcoming to you about what he said to me on the phone, I will be happy to print out a complete transcript of the conversation.We are both very dedicated to making the Association have a growing impact on our community. My reputation and commitment over my career and since I have arrived here stands its own. Given the fact that we have never met and you have never engaged in a conversation with me or asked me any questions you seem to have a lot of opinions about who I am and how I and the Association operate.
You also mentioned you have a number of documents form a “leak”. First of all we want to let you know that if those are not pubic documents and are clearly marked confidential that unless you officially received them from us, which you have not, they cannot be read and distributed. Your focus on this issue of confidentiality and Joel’s focus on the same issue during our phone call of yesterday and your instruction to me is absurd. Your concern about keeping secrets, rather than being open and transparent to the community in your actions and deeds, is the entire focus of the blog. Your assertion that because a document is marked confidential means that it is a trade secret, or proprietary, would be laughed out of court. Documents that demonstrate ineptitude of management are not protected by any laws I am aware of, and if you are claiming some type of privilege, there is none. In fact, the better argument would be: The non-disclosure of the problem highlighted in the report is a type of fraud that was perpetrated on community members who willingly donated to the JCA without knowing the true extent of the financial situation that has engulfed the JCA. If you are claiming that documentation of JCA and prior JFED financial ineptitude are somehow protected or proprietary, you should first sue the IRS for forcing you to make your Form 990s public. We are however willing when we meet to address your questions and also request the return of any confidential and proprietary. I am happy to meet with you. I will not keep any details of the meeting confidential, so you must know that in advance. I asked Joel Kramer yesterday in our phone call how the bad debt of the JCA increased in 2012 to $674,000 from about $110,000 the prior year. Joel informed me he is a CPA. He is listed as the Treasurer of the JCA on your tax return. He informed me that he did not know the answer to my question. So, if this is an example of what disclosure will look like and what information will be revealed to me in the meeting you are proposing, you should be prepared to be reading about it here.
Please let us know if you are willing to sit down with us so that we can make sure you have a complete picture and we can answer your questions and address your concerns.
Stuart Wachs, President & CEO
Jewish Community Association
THE SECOND REPLY TO THIS ARTICLE FROM STUART WACHS – More comments below.
From: Stuart Wachs <email@example.com>
Subject: RE: Good evening
Date: May 3, 2014 at 6:28:21 AM MST
To: Mark Greenburg <firstname.lastname@example.org
Cc: “Joel Kramer”
I also just took a little time to look at the figures you are using to paint the financial picture of my time in Minneapolis. First off the years you would need to use are 2005 – 2001. I was not running the JCC in 2004. If I used your numbers for those years and added in the 990 numbers for 2011 it would be (884,000) not (2,000,000). (this was with your own selection to adjust the one ear and remove the one time gift of equipment and property from the federation. It is impossible to try understand real operating gains/losses from a 990 in non-profits for a number of reasons including how GAP requires certain expenses and revenues to be recorded this does not always reflect operations. If I accepted this statement as accurate, which I don’t, then this is even more of a reason for you to be more open and transparent, not less. Why not make your books and records, after provisions for donor privacy are made, open to the public? Why not make your audited financial statements open for review, as many responsible 501c3’s do? Why not answer some of the following questions that everyone should know?
1) Exactly how much does it cost to run the JCC? The community needs to know that because our assets are going into supporting the JCC, and now that the two entities are combined, how does one know what is a JCC expense and what is a JCA expense?
2) Is part of the bad debt expense a write-off of JCC rent?
3) Has a study ever been done about the long term viability of the campus? Do you know whether or not you are just beating your head against a wall and trying to salvage a JCC operation and a campus that might not ever be able to be operated without a deficit being created? As the leader of the JCA, now responsible for this sacred trust, do you ask these questions? I would suggest that the JCC will never be able to be operated efficiently because it is not important to the Jewish Community of Greater Phoenix. It should not be about applauding you for narrowing a loss, (as you have said was something you accomplished in your previous job), but whether we should continue supporting money-draining and possibly anachronistic institutions that might never be able to operate without a deficit?
4) Would it not be more intelligent to spend the precious assets of the Jewish Community by supporting Jewish Education and reducing private school tuition for the community’s children, or an increase in aid to help get more kids to spend time in Israel, or more support for the aged and elderly?
You were hired by a board that destroyed the JFED and built an unsustainable campus and JCC that I am guessing can not be operated profitably. Instead of being tasked with doing what is correct for the Community, you have been tasked with doing something arbitrary, which is to try and make the people responsible for this mess look presentable by saving their campus. Just as you chose to remove the one time transfer of property there are a number of expenses in some years that do not reflect operations for example how depreciation is reflected, some expense related to the property transfer your removed and others in other years. Even a well informed and knowledgeable board needs the auditors to walk through a 990 and explain the variances to operations and why numbers are reported that way.
On the surface from the way you presented numbers look at the miraculous improvement from 2004 to 2005. While I would like to say I improved operations by over one million dollars in my first year, which is what your numbers show, that is not accurate. What I can tell you is that I led a very successful financial turnaround for an agency with a 15 plus year history of major operating deficits to during my 7 years here we had all but one year at break even or better based on true operating results.
Stuart Wachs, President & CEO
Jewish Community Association