I first saw news of the settlement between the University of Hawaii and former football coach June Jones last night and was a little surprised that it reportedly includes payments made to the university by the June Jones Foundation. The news immediately raised red flags in my mind.
Jones is the chairman of the foundation that bears his name. So how in the world does money collected by the foundation for charitable purposes get used to pay off the contractual debt of the former coach who just happens to also be the foundation’s chairman?
The June Jones Foundation describes its goal as “improving the quality of life for needy families of children with life-threatening illnesses as well as other charitable causes.”
Here’s how the June Jones Foundation web site solicits donations:
Make a tax-deductible donation to the June Jones Foundation
The June Jones Foundation is a 501(c)(3) nonprofit, tax-exempt foundation dedicated to improving the quality of life for needy families of children with life-threatening illnesses as well as other charitable causes.
The emotional, physical, and spiritual impact of a seriously ill child has on a family cannot be measured. The June Jones Foundation is dedicated to lifting their spirits by providing grants, programming and support.
Founded by SMU head football coach June Jones, the Foundation will also work with other nonprofit organizations with similar missions.
During 2007, the Foundation made grants totaling $127,585, including $35,000 each to HUGS and Friends of Hawaii Charities, and $28,500 to Ronald McDonald House, according to its federal tax return. But the Foundation also paid “administrative fees” of $155,462 as well as direct expenses of $181,893 to put on three charity events. At the end of 2007, the foundation ended the year with just $41,000 in cash on hand.
The administrative fees were apparently paid to foundation executive director Kevin S. Kaplan or his company, Coaching Charities, a Las Vegas-based “full-service foundation management company.” Kaplan is founder and CEO of the company.
According to the Coaching Charities web site, it “coordinates almost all foundation responsibilities” for clients. The June Jones Foundation is one of two dozen clients highlighted by the company.
Kaplan is also Chief Financial Officer and a director of Rudy Nutrition, another Las Vegas company which had its stock registration revoked by the Securities and Exchange Commission lat month after failing to file required financial reports for several years.
His biography contained in a report to the SEC earlier this year notes:
President and CEO of Coaching Charities LLC, Mr. Kaplan oversees all company operations in his nationally recognized foundation management company. His company’s function is to promote professional sports teams, individual team members, college teams and players with innovative marketing programs. Kevin has been called a “Marketing Expert” and “Promotion Whiz”. His client base consists of many national sports affiliated organizations at the top levels. Kevin has developed unique marketing programs that attract national media coverage producing direct results.
Mr. Kaplan has served a Vice President of Marketing for the Birmingham Fire of the World League (NFL Europe), First Security Bank of New Mexico and Director of Marketing for the Fiesta Casino & Hotel (Las Vegas), a property owned one time
by The Maloof Family. He also founded and served as Executive Director of Beer Drinkers of America, a national 800,000 member consumer advocacy organization funded by Anheuser-Busch and Miller Brewing Company.
But the question lingers. Instead of helping children and their families, the June Jones Foundation is ponying up to buy Jones out of the time that was remaining on his UH contract when he abruptly took the head coaching position at SMU. Jones himself pays nothing, it appears. The charitable foundation and its donors cover his personal contract obligation. Is that really a legal use of charitable funds originally solicited for children and families, even if it benefits the university?
A Star-Bulletin story this morning by Craig Gima may provide the clue for how this is being spun.
“This was done based on mutual respect,” said mediator Clyde Matsui, who called the agreement unprecedented. “It ends on a handshake. There will be no release (of liability), no settlement agreement. … They trust each other.” [emphasis added]
So perhaps all the parties are going to attempt to dance around the issue and pretend that any payments to UH by the June Jones Foundation have no relationship at all to the contract dispute because they are not part of a legal “settlement agreement”.
Whew. It makes my head spin.