Updated 12/1/2015; see below.
According to Courthouse News Service, the International Civil Rights Center and Museum in downtown Greensboro has filed a libel suit against Greensboro’s daily newspaper, the News & Record. Per that story, the museum accuses the paper of publishing false and damaging info about the museum’s finances.
Long story short: This suit will never see the inside of a courtroom.
Forget the question of whether the N&R knowingly or recklessly published something false and defamatory. Forget the question of whether the N&R published anything false at all. Here’s all you need to know:
For this suit to go forward, the museum’s books would have to be opened to the N&R’s attorneys — and probably a forensic accountant or two. And the museum’s founders, Earl Jones and Melvin “Skip” Alston, would have to be deposed — that is, answer questions under oath from N&R attorneys about the museum’s finances and their handling of those finances.
Three words: Nah. Guh. Happen.
Update, Dec. 1: Greensboro’s mayor, who sits on the museum’s board as an ex-officio member, says the suit will be withdrawn, and that’s not all. Thanks to Roch Smith Jr. for this follow-up:
Greensboro Mayor Nancy Vaughan, who sits on the ICRC&M board as an ex officio member, says the ICRC&M board did not vote on suing the News & Record at any of the board meetings she attended. She says she contacted the ICRC&M attorney Doug Harris to see if a vote was taken at any of the meetings she did not attend and Harris told her no vote had been taken to file the lawsuit.
Vaughan did say, however, that she was aware of dissatisfaction with the News & Record’s reporting at the ICRC&M. Vaughan said the concern was that the News & Record did not adequately explain the nature of the center’s debt in the Moffet article and that the misrepresentation of the size of the debt hampered ICRC&M’s fund raising efforts.
As Vaughan explained it, approximately $23 million of the center’s total debt is for tax credits which will be dismissed upon the completion of payments of a couple hundred thousand more dollars. Once the final payment is made in 2016, the balance of that debt will “evaporate,” Vaughan said. Vaughan explained that a recent grant by the City of Greensboro to the ICRC&M is set aside to cover those payments and that they are in an account that requires the signature of City Manager Jim Westmoreland for disbursements.
Vaughan says the ICRC&M had been discussing their concerns about the reporting of the debt with the N&R for “months” and attempting to get it to publish a correction or clarification. Vaughan says she did not know what prompted the suit to be filed without a vote by the board, but understands that after the suit is served on Tuesday, the ICRC&M intends to withdraw it without prejudice — meaning, they can file it again if they choose — and that they will return to negotiations with the News & Record.
As it was written (by me), so shall it apparently be: This suit is going No. Where.
And just as well. The museum’s whining notwithstanding, the News & Record explained the museum’s debt in a good bit of detail in an article that ran last January. It’s archived on the N&R website.
And if Skip and Earl are really worried about public trust and confidence in their institution, they might think hard about stunts like filing a lawsuit without the knowledge and approval of the governing board. I’m sorry, but, Jesus, as running a nonprofit goes, it really gets no stupider than that without embezzlement or sex crimes being involved. I sure as hell wouldn’t contribute a dime to a charitable nonprofit run that laxly.
And, finally, before we get sucked in by Skip and Earl’s bid for sympathy, let’s remember, as this July N&R article reminds us, what the museum’s own long-time auditor said in his 2014 audit report:
In their review [of auditor Oliver Bowie’s 2014 audit report], city auditors Len Lucas and Mickey Kerans noted several areas that point to the museum’s dire financial situation, which officials have sought to downplay in recent years.
According to Lucas and Kerans, museum officials:
• Drained in January its operating reserve, which is required to contain $1 million.
• Have zero working capital and zero contingency money.
• Owe Carolina Bank nearly $782,900 and the city as much as $1.25 million for the first installments of the forgivable loan — minus whatever money it raised toward the loan.
The city auditors also noted a warning about the museum’s future raised by Bowie, who has audited the museum since 1995. Bowie noted that the museum hasn’t paid $500,000 to one of the businesses it was required to set up as a condition of receiving millions in historic tax credits in 2010.
Bowie said “those conditions raise substantial doubt about the project’s ability to continue as a going concern.”
Again, that’s not the News & Record saying that. That’s the museum’s independent outside auditor. I’ll let those of you who are CPAs weigh in on what “substantial doubt about the project’s ability to continue as a going concern” means with respect to the museum. But when I was covering the PTL criminal case, civil lawsuit and bankruptcy case in the late 1980s, CPAs explained that language to me as meaning that auditors didn’t know whether the organization would still be in business in 12 months or not.
I don’t want to let the N&R off the hook completely, however. As of this writing, the paper and its website have published nothing about the lawsuit. I get not wanting to comment on the suit — particularly at this early stage, that’s only prudent. But failing to cover it is bush-league and strongly suggests that Publisher/Executive Editor Jeff Gauger is out of his depth.
Fortunately for him, the available evidence suggests Earl and Skip are even more out of theirs.