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Culverhouse: Mom's not carrying out Dad's wishes

The former Buccaneers owner's son says an ex-husband's return imperils her foundation.

By JEFF TESTERMAN
Published April 22, 2007

ADVERTISEMENT Related content Charity in conflict (5/1/05) [Times photo: (1979)] Tax lawyer Hugh Culverhouse Sr., with his wife, Joy, amassed a $381-million fortune in utilities, banks, citrus groves and the Tampa Bay Buccaneers NFL franchise. [Times photo: The University of Kansas Medical Center] Dr. Robert M. Daugherty and Joy McCann Culverhouse were married for five years before she divorced him and removed him from her foundation board. Now he has moved back into her condo at Monte Carlo Towers in South Tampa.

TAMPA - A year ago, Joy McCann Culverhouse divorced Dr. Robert M. Daugherty, the medical school dean who helped her redirect millions of dollars in her charitable foundation away from local groups and toward beneficiaries with ties to Daugherty.

Now comes a new wrinkle in the Culverhouse saga. Daugherty, the man Mrs. Culverhouse threw out of her home and off her foundation, has moved back in with the 87-year-old widow, and foundation money again is flowing to groups he favors.

Mrs. Culverhouse's son, Hugh Culverhouse Jr., contends in court papers that these gifts are "illegal." He says age, painkillers and the reappearance of Daugherty have rendered his mother incapable of managing her charitable foundation.

He wants a Hillsborough judge to revoke foundation gifts that were made to charities not specified in a deathbed letter by his father, former Tampa Bay Buccaneers owner Hugh Culverhouse Sr. He asserts that $6.8-million in "improper" bequests in the past several years should be repaid to the foundation.

"My mother needs help," said Culverhouse Jr. "So does the foundation."

- - -

Ten years ago, in an early episode of this soap opera, Culverhouse Jr. stood by his mother and celebrated a settlement agreement that put her in control of millions of dollars to bequeath to a select group of 38 charities, universities and medical institutions.

The money was part of $381-million in assets amassed over the lifetime of Culverhouse Sr., a tax lawyer who made his fortune in utilities, banks, citrus groves and a creamsicle-colored NFL football team.

Dying of lung cancer in 1994, Culverhouse Sr. directed three trustees to donate funds in a family foundation to the 38 nonprofits. But he left his wife of 52 years out of the decisionmaking.

Mrs. Culverhouse went to court, swept aside the three trustees and won the right to determine donations to the 38 herself.

Her son, Culverhouse Jr., acted as her attorney in the estate battle and served briefly as director of the $40-million foundation. Satisfied that his father' wishes and his mother's needs each had been met, he then stepped aside.

Now, after a stream of donations to a new list of charities, Culverhouse Jr. has returned to court to oppose his mother's handling of the foundation and its money.

In probate papers filed at the Hillsborough County Courthouse, he says foundation bylaws were improperly rewritten to "subvert" his father's last wishes and to facilitate millions of dollars in "illegal" gifts.

Many of the improper bequests, he says, went to beneficiaries with connections to Daugherty, who six years ago became Mrs. Culverhouse' second husband. Fifteen years her junior, he is a former dean of the University of South Florida Medical School.

Culverhouse Jr. says recent depositions support his contention that his mother is incapable of fulfilling the mission of the foundation.

In a videotaped deposition in January, Mrs. Culverhouse was asked about Daugherty - the man she put on the foundation board, married, divorced and removed from the board. She testified that Daugherty has moved back into her condo at Monte Carlo Towers in South Tampa.

"Does that sound rational?" Culverhouse Jr. said in an interview.

Mrs. Culverhouse testified that she had no concerns about conflicts that arose while Daugherty was on the board, conflicts that sparked an investigation by the Florida attorney general.

She could not answer routine questions about the foundation, including how a CPA who is her personal accountant came to be a director of the foundation.

In less than three hours of testimony, 88 times she answered, "I can't recall," "I don't know" or "I have no idea."

- - -

Mrs. Culverhouse declined to be interviewed for this story. "I'm not allowed to talk to you," she said. "You'll have to call my attorneys."

Robert L. Olsen, an attorney representing the foundation, declined to discuss the probate case, saying he does not comment on pending litigation.

But when the St. Petersburg Times asked Mrs. Culverhouse two years ago about making generous donations to new beneficiaries affiliated with Daugherty, her husband at the time, she was adamant that she and no one else determined who got foundation gifts.

"I do what I damn well want with my money," she said. "I'm the driver of this car."

The Florida attorney general didn't see it that way.

Then-Assistant Attorney General Gerald Curington said Mrs. Culverhouse had no right to violate the 1997 court settlement that memorialized Culverhouse Sr.'s intended list of beneficiaries. He said the foundation money doesn't belong to her.

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

The attorney general began investigating after the Times reported a series of conflicts involving the Joy McCann Foundation. Among them:

- The foundation voted to give $300,000 to a University of Chicago cancer research program run by Daugherty's son.

- The foundation donated $1,025,000 to the University of Kansas, where Daugherty attended college and medical school. After the gifts, Kansas named Daugherty its Distinguished Medical Alumnus of the Year.

- Upon lobbying by Dr. Henry Jonas, a Daugherty associate who was added to the foundation board, the foundation agreed to give $500,000 to a New York nonprofit called Physicians for Reproductive Health and Choice - where Jonas served as a director.

- After the gifts to Chicago and Kansas, the two universities gave re-accreditation counseling contracts to DJW Associates, Daugherty and Jonas' consulting firm.

- After a single, brief luncheon with Nevada lawyer Ralph Denton, a longtime friend and former associate of Daugherty, Mrs. Culverhouse okayed a $500,000 gift in Denton's name to the law school at the University of Nevada at Las Vegas.

When the attorney general stepped in, the foundation asked a judge to declare that directors had the right to revise bylaws, expand the list of eligible charities and donate several million dollars to new, out-of-state beneficiaries.

To avoid charges of self-dealing and remedy possible conflicts, changes were made. The grants to Chicago and the New York Physicians Group were partially withdrawn. Directors fees, which had risen from zero to $5,000 a month, were abolished. Daugherty left DJW, the re-accreditation consultant.

And, as Mrs. Culverhouse divorced, Daugherty and Jonas left the foundation board.

The changes did not placate the attorney general or some of the 38 charities who felt disowned. Nor did they salve the feelings of Hugh Culverhouse Jr.

"I still feel the assets of the foundation are being illegally depleted," he said. "I still have concerns that my mother is being unduly influenced."

- - -

Culverhouse Jr., 58, is a former federal prosecutor and Securities and Exchange Commission attorney who is now an investor overseeing the Palmer Ranch in Sarasota. He inherited half of the 5,500 acres of prime real estate. He purchased the other half from his mother.

He and his wife, Eliza, split time between Miami and Sarasota and oversee their own charitable foundation.

"The dispute with my mother has nothing to do with me wanting her money," said Culverhouse Jr. "I have plenty of my own."

Culverhouse Jr. is allied closely with some of the original 38 charities who have joined him in seeking judicial oversight of his mother's foundation. Last year, he donated 16 acres of Palmer Ranch land valued at $4.7-million to the Sarasota Family YMCA, one of several charities to protest the Joy McCann Foundation's foray into out-of-state giving.

The two largest contributions the foundation made last year were to two of the original 38 charities: $1-million to the Children's Home in Tampa to benefit at-risk juveniles, and $1-million to WEDU, Tampa's community television station.

But Culverhouse Jr. said he is pressing his probate complaint because gifts last year also continued to go to beneficiaries not on the original list of 38. The foundation, for example, gave $450,000 to selected medical scholars in a program devised in part by Daugherty.

Daugherty did not return calls from the Times seeking comment.

Culverhouse Jr. also went to court, he says, because his mother has consolidated power to do what she wants by surrounding herself with paid loyalists.

Bylaw changes at the foundation at the time of her divorce have given Mrs. Culverhouse carte blanche authority to donate to any charity she chooses. Her reshaped board consists of herself and two men, and it seems unlikely either would oppose her. One is her grandson, the other is her personal accountant.

The grandson, Christopher L. Chapman, is a University of South Carolina School of Law graduate given poor marks at the Hillsborough Public Defender's Office. A supervisor there wrote that Chapman was "not very motivated," had "poor organizational skills" and "did not work as a team member."

The Tampa Police Department rejected Chapman's application for employment because his polygraph examination indicated he was untruthful.

Now 34, Chapman works part-time as a reserve Hillsborough sheriff's deputy.

He lives in a $520,000 townhouse purchased by Mrs. Culverhouse and is a vice president at McCann Investment Properties, the company overseeing most of her assets.

Asked at her deposition why she appointed her grandson to the board, Mrs. Culverhouse said that the foundation needed a lawyer. But Chapman said in an interview that he no longer practices law. In fact, to avoid violating Florida law, Chapman cannot practice law while working as a sheriff's deputy, his law enforcement personnel file shows.

Why does Chapman think he was appointed?

"I am very loyal to my grandmother, I'm ethical and I'm honest with her," he said.

The other new director is Scott D. Lynch, 46, a CPA who has been working for the Culverhouse family for 20 years.

Lynch draws paychecks as the manager of McCann Investment Properties, as the accountant for the foundation and as the personal accountant for Mrs. Culverhouse.

Chapman and Lynch declined to say what they were being paid by Mrs. Culverhouse's investment company, though Chapman said in resigning as a full-time deputy that he was taking an employment opportunity "too attractive to turn down."

Although Lynch testified in his deposition that he was troubled by some gifts approved while Daugherty was on the board, he never voted against Mrs. Culverhouse. Chapman said he has never voted against his grandmother, either.

Culverhouse Jr. and some of the charities designated by his father think the board needs to be reconstituted again.

"That's not much of an impartial board, " said Paul Robell, vice president for development and alumni affairs at the University of Florida, one of the original 38 charities. "The ideal thing would be to create a board that would carry out the last wishes of Hugh Culverhouse Sr.

"Is that going to happen? We're not optimistic."

Times researcher John Martin contributed to this report. Jeff Testerman can be reached at 813 226-3422 or testerman@sptimes.com.

[Last modified April 21, 2007, 17:27:36]