Recording Academy CEO Accused of Funneling Funds From MusiCares

[elle]

https://www.billboard.com/articles/b...usicares-money


Recording Academy CEO Neil Portnow Accused by Fired Staffer of Funneling Funds From MusiCares Charity

5/23/2018 by Colin Stutz , Melinda Newman

Mark Von Holden/Invision/AP
Neil Portnow participate in the 60th Annual Grammy Awards red carpet roll out at Madison Square Garden on Jan. 25, 2018 in New York City.

The philanthropy's former VP, Dana Tomarken, detailed her allegations in a letter to the Recording Academy Board of Trustees, also claiming wrongful termination, exploitation and "ongoing instances of workplace abuse and harassment."
Recording Academy chairman and president Neil Portnow has been accused by a former staff member of steering money away from the organization's MusiCares charity in order to fund a deficit from this year's Grammy telecast.

On Monday, as Variety first reported, former MusiCares VP Dana Tomarken detailed her allegations in a letter to the Recording Academy Board of Trustees, which is holding its annual meetings in Hawaii this week. Tomarken also claimed Portnow brokered a deal to hold MusiCares' annual Person of the Year event at Radio City Music Hall without her knowledge, resulting in a loss in 2018 fundraising that projected just $1 million for this year's event -- a significant drop from the $5 million raised in 2017. A Recording Academy spokesperson denies that any money was funneled away from MusiCares.

Neil Portnow participate in the 60th Annual Grammy Awards red carpet roll out at Madison Square Garden on Jan. 25, 2018 in New York City.
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In the nearly 4,500-word letter, which was obtained by Billboard, Tomarken, who was fired on April 16 after 25 years with the Academy, also claimed wrongful termination, saying the cause was a $2,500 bill for a MusiCares auction item that she was late in paying. She said her coworker Dorit Kalev was fired in connection to that as well, alleging "biased feelings" towards her from the Academy's chief human resources officer. Meanwhile, Tomarken claimed she endured "ongoing instances of workplace abuse and harassment" from two male coworkers and her dismissal came following "a painful year of trying to protect MusiCares from being exploited." A heading in her letter reads, "Hostile Work Environment, Abuse and Harassment," in which she alleges employees have been complaining about the chief human resources officer's behavior "over the years."

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MusiCares was established in 1989 to help provide assistance for musicians and members of the music industry at times of need to help cover medical, financial and personal emergencies. It was incorporated by the Academy in 1993. As of earlier this year, it has given out nearly $60 million to more than 125,000 clients in its nearly three-decade history.

The 2018 Grammys were an expensive one, as the award show returned to New York for the first time in 15 years. According to Portnow in January, the event cost $6 million to $8 million more to produce at New York's Madison Square Garden than in Los Angeles at the Staples Center for various reasons and blamed New York City for not living up to its commitment to help cover the shortfall -- a claim the city refuted. (The Academy has already announced the Grammys will return to Los Angeles next year for at least four years.)

With the move to New York, Tomarken explained she began negotiating with Brooklyn's Barclays Center -- which operates under an agreement with AEG, operator of Staples Center and rival of Madison Square Garden Company (MSG) -- to host the annual MusiCares Person of the Year event. But those plans fell apart when Tomarken said she received a call from Irving Azoff -- who has a separate company with MSG -- telling her Portnow and MSG "had early on in NY Grammy negotiations agreed that the Person of the Year tribute would be held at Radio City Music Hall, a Madison Square Garden Company venue. Neither I nor anyone on the MusiCares staff was ever notified of those discussions or agreement, and as a result, we were forced to walk away from a huge benefit to MusiCares: Barclays' generous financial commitment and their venue."



Neil Portnow participate in the 60th Annual Grammy Awards red carpet roll out at Madison Square Garden on Jan. 25, 2018 in New York City.
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A source confirmed this move from Barclays to Radio City, telling Billboard that Barclays had promised to give MusiCares a favorable deal, including donating the building for free or very little cost. Because Radio City is a union-run building, that caused costs to increase further and created issues backstage since the usual MusiCares production team was restricted by union regulations.

"The agreement with Radio City Music Hall was at least twice as expensive as the Barclays Center offer and that does not factor in any additional support we might have been able to secure from Barclays sponsors," Tomarken wrote.

There were other issues too. As Tomarken pointed out, because Radio City is not setup to host a dinner ceremony -- as is tradition for the MusiCares Person of the Year event -- instead, a straight-forward concert was held honoring Fleetwood Mac, whom Azoff manages. This change affected ticket prices and resulted in less money raised, said Tomarken.

Portnow previously told Billboard this year's Person of the Year event raised a gross profit of nearly $7 million.

"The decision as to the venue for this year’s Person of the Year event was made after careful consideration of all options, and input from all appropriate individuals," said a spokesperson for the Recording Academy in an email. "MusiCares’ interests were not sacrificed in favor of the interests of the Recording Academy."

Azoff did not respond to an immediate request for comment. Tomarken declined to comment beyond her letter.

In the letter, Tomarken also claimed that MusiCares was dropped from a package ticket deal conceived by Portnow and Oak View Group (a partnership between Azoff and Tim Leiweke) that would sell Grammy Week packages with passes to the ceremony telecast and the Person of the Year concert and was designed to raise $1.5 million for MusiCares. Instead, Tomarken said, "Just before the 2017 Christmas holiday, I discovered ... that Neil had subsequently approved dropping MusiCares from the package revenue stream in favor of funding the telecast deficit."

Tomarken continued, "Since we were forced into costly agreements we had no control over, MusiCares will likely net no more than $1 million from the 2018 Person of the Year. Last year's net was $5 million. The significantly less amount raised is, in my opinion tragic, totally unacceptable, and it did not have to happen."

Goodlatte (right) with Jimmy Jam, Recording Academy chairman emeritus, at a House Judiciary Committee subcommittee hearing on music licensing in 2012.
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In order to offset the revenue loss from the New York Person of the Year event, Tomarken said the Academy's business affairs department asked the MusiCares staff to "reduce the amount of financial support for our clients in need." She wrote, "I was very clear with Neil that I did not think this was a good idea, especially since MusiCares still had $5 million from the 20th anniversary campaign which was specifically earmarked for financial assistance. In addition, the MusiCares Board of Directors had not approved reducing our grant funds to people in need. Reduction in the amount of financial assistance could not be made unilaterally by staff. It needed board approval. Neil agreed and told me that he would speak with ... Business Affairs about these decisions."

A Recording Academy spokesperson refuted this claim, telling Billboard in a statement. "As Ms. Tomarken well knows, neither MusiCares nor the Recording Academy ever intended to reduce, nor will they reduce, the amount of financial support made available to MusiCares clients in need. MusiCares continues to provide the highest level of service to people in need across our music community, as evidenced by the four-star rating it earned, once again, in February from Charity Navigator -- the highest rating the independent charity watchdog organization awards. Simply, our commitment and support will not be diminished."

In an effort to get an early start on the 2019 MusiCares Person of the Year event and begin to raise funds to help diminish the alleged losses from the 2018 event, Tomarken said that she was in discussions with Dolly Parton's team to honor the country icon, but "was never able to consummate the deal because I was terminated and not allowed to take a meeting." A source tells Billboard that the conversations with Parton's team have continued since Tomarken's dismissal, but that no decision has been made by her camp.

Tomarken also outlined the circumstances that led to her termination, saying the cause was her use of an unsold auction item from the 2017 Person of the Year event for a hotel stay in Lisbon. She had pledged to purchase the item for $2,500 -- an amount arrived at based on "the last 25 year's procedure on how some unsold auction items are handled after our events," offering 30 percent of the item's original $7,000 minimum bid, plus an added $400 at her own discretion -- but had forgotten to pay the bill. She said she was of course willing to pay the amount and submitted a belated completed pledge form.

A few days later, Tomarken and Kalev were told by Academy human resources staff that they "needed to separately meet with a CPA and an attorney from Proskauer Rose about the 'unsold auction item process.'" She wrote, "When I arrived, I immediately noticed their folders marked 'INVESTIGATION' and realized that Human Resources had misrepresented to us the purpose of the meeting. This wasn't an information gathering meeting about a process; this was an interrogation."

The next week, Tomarken and Kalev received calls saying they were suspended and would not be allowed entrance to the building. "I was prohibited from having any contact with staff at the Academy or anyone related to our work at the MusiCares," she wrote. "The locks on our office doors were changed, and staff was told that they could have no contact with us or give out our contact information to anyone who needed to reach us. Two weeks later on April 16, 2018 we were terminated, and MusiCares staff was told, once again, that they were prohibited from having contact with me and if someone called to speak to me that they were to say that I no longer worked there."

The Recording Academy and MusiCares President/CEO Neil Portnow speaks onstage during the 60th Annual Grammy Awards at Madison Square Garden on Jan. 28, 2018 in New York City.
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Responding to Tomarken's claims about her dismissal and a hostile work environment, an Academy spokesperson told Billboard in a statement, "Ms. Tomarken did not raise the issues relating to alleged 'workplace abuse and harassment' until after her employment was terminated. An independent investigation of these allegations was immediately commenced. Based on the outcome of that investigation, appropriate action (if any) will be taken. Both the Recording Academy and MusiCares take all allegations of this kind seriously."

It has not been an easy year for the Academy's image. Tomarken's letter follows the previously mentioned reports of a highly expensive, and arguably frivolous, location move for the 2018 Grammys. That was, in turn, overshadowed by Portnow's post-show comments about a lack of female representation in the awards show, saying female artists and executives need to "step up" in the music business. He later tried to clarify his comments, but that did little good overall and recently the Academy announced the formation of a new task force for female and minority advancement.

"The smoke-filled back room deals, in which MusiCares can be thrown under the bus, can never be tolerated again," Tomarken ended her letter. "The internal corporate power struggles and undermining within the staff is rampant, and it is tearing the walls down. A number of women are worried about losing their jobs, and that is not the sort of environment that any employee should work under."

UPDATE: This article was updated at 8:20 p.m. EST on May 23 to includes statements from a Recording Academy spokesperson.

[Dr.Brown]

Beware the Curse of Musicares...

[sasja]

Evidently