By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
Juan Galan has always known that people get a great education at Miami-Dade Community College. Galan graduated from the college in 1963 before going on to earn a bachelor's degree in engineering from the University of Florida and a master's degree in administration from George Washington University. A prominent businessman and investor, he has served on the board of the MDCC Foundation for more than ten years, spearheading the fundraising drives that have helped make the college the premier two-year institution in the nation.
Galan, though, is not just another of MDCC's successful alumni who, according to the college's recent Miami Herald advertising campaign, can be found "everywhere you turn." He has been one of the school's most distinguished and devoted supporters, helping to solicit large amounts of money on behalf of the college and generously donating out of his own pocket over the years. So why did this pillar of the community college announce his resignation from the MDCC Foundation on the eve of an anticipated $100-million capital campaign, the biggest fundraising initiative in the school's history?
"Because [MDCC president] Eduardo Padron runs the place like an outlaw outfit," alleges Galan, who cites as evidence Padron's growing control over the supposedly independent foundation, his increasingly "creative" accounting methods, and potential conflicts of interest involving the foundation's leadership.
Galan made his feelings, and his resignation from the foundation, known at a December 7 meeting of the MDCC district board of trustees, the college's chief administrative body. If not exactly a bombshell commensurate with Pearl Harbor, the resignation nevertheless is the latest salvo in what, behind-the-scenes, has been a highly contentious year at the upper levels of MDCC.
Galan's concerns date to February 2000, when Padron asked foundation president Sandy Gonzalez-Levy for funds from the foundation's coffers to pay for a party at his house. "Padron refers to these affairs as “friend-raising' for the college" says Galan. Because the foundation had not officially designated money for such get-togethers, Gonzalez-Levy refused to release the funds to Padron and instead suggested he take the money from his discretionary accounts. (The MDCC Foundation is a private nonprofit corporation separate from the college. Its principal function is to raise money for the school.) It is standard practice for the MDCC president to have three accounts in his name from which he can draw funds for official college business. Padron did just that.
And then, according to Galan, Padron got rid of Gonzalez-Levy, who left her paid position at the foundation last June after having served as president since 1997. Galan maintains that Gonzalez-Levy was forced to resign by key members of the foundation sympathetic to Padron's desire for increased control over that body and its money. Simply put, Padron didn't want anyone questioning or placing restrictions on his use of foundation funds, as Gonzalez-Levy had done.
Galan believes Padron's power grab began with Gonzalez-Levy's removal. According to Galan Padron and his supporters -- most prominently Miami Herald chief counsel and foundation chairman Robert Beatty -- engineered Gonzalez-Levy's departure in such a way as to skirt the foundation's review process for evaluating the hiring and firing of its own president. "When someone resigns," Galan explains, "there is no review of the job performance." In other words board members like Galan were unable to conduct an exit interview with Gonzalez-Levy because she resigned as opposed to having been fired. (When contacted and asked to confirm Galan's version of the events leading to her departure, Gonzalez-Levy declined to comment.)
Galan's suspicions regarding Padron's ultimate objective appear to be supported by proposed changes to the foundation's bylaws, changes approved by the college's district board of trustees at the December 7 meeting that now await approval from the foundation. One change in particular would give the district president -- Padron -- authority over "the evaluation, suspension, removal, and annual appointment of the executive director [formerly president], with the input of, and in consultation with, the foundation board chair."
The wording, as with all bylaws, is important. The new language specifically avoids saying that Padron needs anyone's permission to hire or fire the foundation head. More telling than the legalese, though, may be the renaming of the foundation president position. "You know why Padron wanted the change to executive director?" asks Galan, smiling because he does know. "He was pissed people kept confusing the foundation president with the district president." Now there will be only one president: Padron.
Not that Padron hasn't been doing things his own way for a while. Most recently the foundation's audit committee concluded that Padron had run his discretionary accounts into the red and was still writing checks -- mostly to pay for parties -- on one of those accounts. Galan, who cochairs the audit committee, shakes his head: "How the hell do you write checks out of an account with a negative balance?" No other college foundation would put up with that, insists the 56-year-old Galan, who also currently serves as vice president of the University of Florida Foundation.
The problem now is compounded by the fact that under the proposed bylaw changes, the foundation executive director, who should be acting as the chief overseer of foundation spending, will be directly accountable to Padron, making it harder to question the appropriateness of his use of funds.
Galan believes that arrangement won't pass the legal smell test. The foundation operates independently and must maintain real, not illusory, standards of internal accountability. These new guidelines, he contends, are being permitted to go forward only because Padron, eager for greater power, has solicited a favorable interpretation of nonprofit laws from MDCC's legal and accounting consultants, the law firm of Greenberg Traurig and the accounting firm of PricewaterhouseCoopers. Galan wants a second opinion, and not from someone on the MDCC payroll. "Whoever was hired by the college is fine for the college," he asserts, "but we as a foundation should have our own counsel."
Actually Abigail Watts-Fitzgerald, with the law firm of Hunton & Williams, was paid by the foundation to serve in just such a capacity. Problem is, she was barred from presenting her views on the proposed bylaw changes at the December 7 board of trustees meeting. Galan says that too was engineered by Padron, working in concert with foundation chairman Robert Beatty, who declined to respond to the charge.
Significantly Watts-Fitzgerald tendered her resignation as foundation attorney less than a week later, at the conclusion of the December 13 foundation board meeting. Beatty, who was about to adjourn, expressed surprise. "Well," he stammered, "this is a shock."
Perhaps. One wouldn't want to accuse Beatty of being disingenuous, but resignations from the foundation have become almost as common as summer showers in South Florida. In addition to those of Gonzalez-Levy and Galan, and before that of Watts-Fitzgerald, resignations had been submitted by prominent foundation members such as WSCV-TV (Channel 51) vice president and general manager Luis Fernandez-Rocha, Greater Miami Chamber of Commerce president William Collum, businessman Andrew Blank, and businesswoman Lydia Harrison, who had chaired the foundation's governance committee.
That's a lot of casualties for an organization heading into a major fundraising offensive. Beatty acknowledges the recent turnover on the foundation but says he sees nothing out of the ordinary. "Some members have resigned for philosophical reasons," he admits, "but that's not at all unusual, peculiar, or even troubling. People have different perceptions about how organizations should function."
Galan argues that Beatty's own ideas regarding nonprofit organizations and the people who run them are peculiar. As the Herald's number-one lawyer and as foundation chairman, Beatty would appear to be uniquely positioned to funnel advertising dollars to the paper while discouraging any news coverage of the foundation he might deem negative. And it is true that the Herald has reaped extensive revenue from MDCC advertising in its pages while the human hemorrhaging on the foundation, a veritable who's who of local business and civic leaders, has escaped scrutiny. Whether Beatty has used his dual influence inappropriately or not -- and Galan has no proof -- it just doesn't look good.
Galan tried to raise the issue at the December 13 foundation board meeting. He wanted the board to adopt an open-disclosure policy regarding possible conflicts of interest. Beatty and others thought the matter should be referred to the governance committee for a recommendation. "Why, when this is standard practice at almost every similar kind of institution?" Galan asked at the meeting. The question hung in the air and then disappeared, like the proposal, into committee. No Heraldreporter was in the room. (Beatty did not respond to calls seeking comment on Galan's conflict-of-interest concerns.)
Beatty, though, will be stepping down as foundation chair after all, claiming to have agreed only to a two-year term in 1998. He will be succeeded by attorney and current foundation vice chairman Victor Diaz, whom Beatty credits with authoring the bylaw changes currently being considered. "Victor did incredible amounts of research," says Beatty, "and produced a set of bylaws that follow the statutory law more closely than ever before."
Padron agrees, carefully pointing out that the bylaw changes were initiated not by him but by the foundation board of trustees. "These proposals went through committee," he says. "The board has created a true partnership between the college and the foundation."
Galan isn't convinced. More to the point, he no longer is comfortable working on behalf of an organization he believes operates with disturbingly little regard for standard business practices or the public trust. Indeed the MDCC alumnus fears the institutional culture at the college is too incestuous to permit significant change. "The problem with the people at the top at MDCC," Galan concludes with a frustration only slightly tempered by his affection for the school, "is that everybody grew up in the institution."
Galan, for his part, has outgrown it. He will make his resignation official sometime in the near future, taking with him what he says would have been his own major gift to the school: another five to ten million dollars he was personally prepared to raise on behalf of the college, and the knowledge that, at MDCC, the biggest lessons sometimes come long after one graduates.