Showing posts with label conflicts of interest. Show all posts
Showing posts with label conflicts of interest. Show all posts

Friday, November 22, 2019

Bob Malm, Conflicts of Interest, and Private Inurement



As I have mentioned before on this blog, I have numerous concerns about governance at Grace Episcopal. Among these are allegations of conflicts of interest on Bob Malm’s part, the possibility of private inurement, and lack of adequate internal checks and balances to prevent these issues.

One of the allegations is that Bob Malm improperly influenced Grace Episcopal School to offer classes to older children. This, it is alleged, he did so that his son James could attend school at Grace, before heading off to St. Rita’s, then Woodberry Forest. While love for one’s children is normal, the end result may be inappropriate if church resources were redirected to meet Bob’s needs, without any assessment of the viability of serving older children. Nor have I seen evidence that the vestry was involved in this decision; if it was, it appears likely that its only role was as a rubber stamp.

Similarly, the 2014 bonus the church paid to Bob Malm, which was 10% of gross annual income, may have been private inurement within the meaning of the Internal Revenue Code. Thus, this gift may place at jeopardy the church’s tax exempt status. But even if it doesn’t, the optics of this decision are terrible, coming at a time when the church faced massive expenditures over the next few years. Even worse, we are not talking about a rector whose compensation package was in any way subpar—rather, we are talking about a rector who received one out of every five dollars given to the church. And this gift was made at the same time the church announced it was cutting health benefits to employees in order to balance the budget.

What is troubling, though, is that neither the vestry nor the diocese appear willing to examine these issues. Still more disconcerting is that the church’s loan to Bob Malm was carried off the books for almost a decade, with many vestry members, myself included, not even aware of it. It’s also worth noting that Bob’s bonus was more than 3 times the church’s annual on-budget expenditures to assist those in need.

Taken as a whole, these issues are profoundly unsettling.