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Culverhouse wishes in judge's hands

The late Bucs owner's foundation defends directing money to new beneficiaries.

By JEFF TESTERMAN, Times Staff Writer
Published September 20, 2005

TAMPA - In a deathbed letter penned 11 years ago, Tampa Bay Buccaneers owner Hugh Culverhouse Sr. directed trustees to donate the bulk of his foundation's fortune to 38 charities, most of them in the Tampa Bay area.

The plan began to fall apart after his widow, Joy McCann Culverhouse, remarried in 2001 and immediately set in motion a series of sweeping changes.

After a board shakeup, the foundation wrote new bylaws. Millions of dollars began to flow not to Hugh Culverhouse Sr.'s designated charities, but to out-of-state beneficiaries with ties to Mrs. Culverhouse's new husband, Dr. Robert M. Daugherty.

Now, stung by criticism from Florida's attorney general and dissension from some of the original 38 charities, the foundation has asked a judge to decide if the changes were legal.

In probate papers filed in Hillsborough Circuit Court, attorneys for what is now called the Joy McCann Foundation have asked a judge to declare that the nonprofit had the authority to change its rules and donate more than $5-million to new beneficiaries.

The office of Florida Attorney General Charlie Crist contends the foundation had no such right. The attorney general says the foundation engaged in a game of "bait and switch" when it disregarded the wishes of Hugh Culverhouse Sr. in creating a new list of beneficiaries.

"The fundamental question is the intent of Hugh Culverhouse Sr.," said Assistant Attorney General Gerald Curington. "Mr. Culverhouse gave the money for specific charities and intended it go to them."

Joy McCann Daugherty has insisted she can ignore the intent of her first husband and direct foundation money where she chooses.

"I do what I damn well want with my money. I'm the driver of this car," Mrs. Daugherty, 85, told the St. Petersburg Times earlier this year when asked about foundation spending.

Curington says Mrs. Daugherty is misguided when she says she controls foundation funds.

"People start these charities and see them as their babies," said Curington. "But it's not their money." Once money is placed in a tax-exempt foundation, he said, "it's the public's money."

In their probate filing, attorneys say the foundation's board was within its rights to amend bylaws because it obtained written consents from "all" of the original charities.

But the John and Mable Ringling Museum of Art in Sarasota never signed a consent, said Ringling marketing director Jeanne Lambert. The University of Alabama, the Culverhouses' alma mater, also declined to sign a consent.

Robert H. Waltuch, a Tampa attorney for the foundation, said the University of Alabama doesn't count because it executed a separate settlement with the foundation.

As for the Ringling Museum, its status has changed. Private when it was listed as one of the original charities, it was taken over by Florida State University in 2000.

Asked about the museum consent and other aspects of the foundation's bylaw controversy, Waltuch made the same reply: "We're not going to discuss litigation strategy."

But the recent filing by the foundation raises new questions about whether misrepresentations were made to the 38 charities when their consents were sought to change the bylaws:

Requests for consents were sent beginning in 2002. But by then, the bylaws had already been amended to redirect the money. The probate papers reveal publicly for the first time that the foundation changed its bylaws on Oct. 25, 2001, three months after Mrs. Culverhouse married Robert Daugherty, then the medical school dean at the University of South Florida.

The foundation did not obtain the consent of St. Joseph's Hospital until May of this year, said hospital public relations manager Lisa Patterson. That consent was obtained after the Times published an article May 1 detailing questionable spending practices of the Joy McCann Foundation.

--In seeking the consents, the foundation indicated the bylaw change would be ratified by a judge. In fact, foundation attorneys never filed a petition with the court.

--Foundation attorneys told the 38 charities that "due to changes in the medical field," the foundation would be best served by expanding eligible beneficiaries to include all U.S. medical institutions. But the recent filing reveals another provision allowing any beneficiary named "in any writing" from Mrs. Daugherty to the foundation.

This all-encompassing provision, permitting the foundation to make donations to any entity favored by Mrs. Daugherty, was not mentioned when the foundation sought consents from the original charities.

The carte blanche provision provided the legal basis last year for a $500,000 grant to the law school at the University of Nevada-Las Vegas endowing a professorship in the name of prominent Nevada lawyer Ralph Denton. Denton is a longtime friend of Robert Daugherty, and a man Mrs. Daugherty met just once, over lunch, before deciding to honor him with an endowment.

--The foundation also told the charities that, if the list of beneficiaries were expanded, Mrs. Daugherty would make additional gifts to the foundation, thus benefitting "all eligible charities."

It's not clear if Mrs. Daugherty made new gifts with her own substantial fortune. Waltuch said that information would be on the foundation's tax return. But for the 2004 return due May 15, the foundation sought an IRS extension, and a foundation official said Friday the return was still incomplete.

The handling of the consents has now boomeranged, with five of the original 38 charities revoking their consents. From May 19 to June 6, revocations were filed by the Sarasota Family YMCA, the Sarasota Opera Association, Girls Inc. of Sarasota County, the University of Florida and the Boys and Girls clubs of Sarasota County.

Paul Robell, director of development at the University of Florida, said officials there are unhappy how consents to the changes were obtained and how conflicts of interest played a part in recent foundation expenditures.

The conflicts were detailed in the May 1 Times article:

--The foundation voted to give three $100,000 grants to the University of Chicago for a cancer research program run by the son of Robert Daugherty. When questions were raised, the foundation canceled the last two years' grants, and Joy and Robert Daugherty donated $100,000 in personal funds to the Chicago research project.

--The foundation donated $1,025,000 to the University of Kansas, where Robert Daugherty, 71, earned his undergraduate and medical degrees. Kansas named Robert Daugherty its Distinguished Medical Alumnus last year and hired his firm to do accreditation counseling.

--After lobbying by new foundation director Dr. Harry Jonas, the foundation agreed to give $500,000 to a New York nonprofit called Physicians for Reproductive Choice and Health. Jonas was paid $70,000 to serve on the Joy McCann Foundation in 2002-03. He is a board member of the New York physicians group and also is a partner in Daugherty's consulting company.

While that money was going to new beneficiaries, less and less money flowed to Hugh Culverhouse Sr.'s original charities. In 2001, the year the foundation bylaws were amended, about two-thirds of all gifts went to those charities. Last year, the 38 got only about a fifth of all bequests.

The University of Florida's Robell understands there was never any guarantee that Hugh Culverhouse Sr.'s money would go to the school. But now, he fears, the changed bylaws are squeezing the university out of the picture.

Before signing the consent form, the university received $2.7-million from Hugh Culverhouse and Joy McCann. After signing the consent, only one donation came, a $5,000 check for women's athletics.

"We're going to say the foundation did not have permission to do what they did," Robell said of the bylaw changes. "We would like to see a new board created with representatives of the charities.

"We're in a new era of accountability."

Added Curington of the attorney general's office: "I hope the affected charities stand up and are heard. This does need to see the light of day."

--Times researcher Cathy Wos contributed to this report. Jeff Testerman can be reached at 813 226-3422 or by e-mail at testerman@sptimes.com

[Last modified September 20, 2005, 01:55:19]

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