Wendt in the Buffalo News

26 Jul

Jay Tokasz did a story on the Wendt Foundation imbroglio today, and got people to call him back, evidently.

The foundation bought the Harrah’s shares in 2003 for $2.8 million, according to its 2007 tax return. The stock was sold in May 2006 for a total of $4.9 million — a 75 percent return in less than three years.

Wendt’s three trustees agreed to finance the lawsuit in January 2006, and the foundation so far has funneled $1.9 million through the Network of Religious Communities, one of the plaintiffs, for legal expenses.

The trustees were unaware of the Harrah’s investment until a periodic review following their decision to fund the suit, said trustee Robert J. Kresse.

Investment advisers, Groesbeck Investment Management, based in New Jersey, determined the investment choices. The trustees decided to sell because the holdings were “inconsistent” with their position on gambling in the City of Buffalo, Kresse said.

Some people were resorting to unfounded attacks on the foundation because the U. S. District Court determined the casino is illegal, as many anti-gambling opponents have argued all along, he added.

The Rev. G. Stanford Bratton, executive director of the Network of Religious Communities, said he was unaware of Wendt’s investment in Harrah’s, but he downplayed its significance.

“Most folks who have a retirement plan may well be invested in a casino,” said Bratton. “It’s hard for almost any of us to be pure in that sense.”

The foundation’s mission is to assist the Western New York region and confront what is harmful, and it shouldn’t be limited in those aims simply because it holds stock in a company that promotes gambling, Bratton said.

“That would say to many of us that we can never speak out,” he said.

It’s akin to a peace protester accused of hypocrisy because he pays his income taxes, which help fund a war effort. “How far do you draw this?” said Bratton.

Besides, casinos and federal agencies have huge amounts of money to invest in lawsuits, while “the people opposed have peanuts,” he said.

Without the Wendt money, opponents of the downtown casino probably would not have been able to press forward in their case against the U. S. Secretary of the Interior and the National Indian Gaming Commission.

The three trustees of the foundation, who are paid six figures for 140 hours of work per year, were unaware of the three-year investment in a casino conglomerate? That stretches credulity. Chris states in comments:

If the trustees of the Wendt Foundation who earn ~$144K per year for ~140 hours of work are unaware as to where the assets of the $120MM foundation are invested, they have patently vacated their fiduciary responsibilities to the trust and should step down.

As to your query about my investment portfolio, I have no investments in pharmaceutical interests as I advised my financial planner to focus my money on defense and telecom stock while dabbling in foreign currencies, muni bonds, and commodities. I am active in the maintenance of my portfolio as anyone with an ounce of financial expertise should be.

Managing the foundation and its investments is half of the trustees’ job. The other half is deciding whom to give it to.

Also, I have no idea who makes up CACGEC or Citizens for Better Buffalo, or other groups involved, so how am I to know what their ability is to fund this lawsuit? There’s no transparency there whatsoever. The Senecas, at least, have to file all sorts of stuff with the government so there’s transparency on their part.

It’s akin to a peace protester accused of hypocrisy because he pays his income taxes, which help fund a war effort. “How far do you draw this?” said Bratton.

No, it’s not. You have a legal obligation to pay your income taxes and can be prosecuted by the federal government if you don’t. Wendt has no legal obligation to invest in Harrah’s over a three-year period, and most certainly could have informed its investment advisors that it did not want to invest in industries that run counter to its mission.

Wendt’s money was paid to the Network of Religious Communities. I think the people are entitled to see exactly to whom, and how much money from the Wendt Foundation was paid to fund this lawsuit.

The foundation has an endowment of more than $140 million and gives away about $6 million per year, mostly to support the local arts and culture, and the needs of the poor, elderly and disadvantaged.

That amount, Kresse said, will only grow as the foundation matures, unlike the casino deal, which will never contribute to the city’s tax base and will end up draining the local economy and taking money from those who can least afford it.

“We haven’t destroyed lives in the process,” he added. “We have helped people.”

Has Wendt audited where its money has been spent? There’s no question that Wendt has helped people throughout WNY during its 50+ year existence. The question here is, why are high-priced Albany lawyers receiving this money, who else is receiving it, and how much?

Oh, and Channel 2? You’re dead to me.

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11 Responses to “Wendt in the Buffalo News”

  1. Christopher Smith July 26, 2008 at 7:54 am #

    It would have been nice to see one of these outlets pick up the story and do some additional investigative work. Unfortunately, it was easier to “report on the report”.

  2. laughingoutloud July 26, 2008 at 8:44 am #

    If you want to know why Buffalo always seems to get the short end of the stick, look no further than the News and the way it reports on matters of public interest. Notice how the article ‘forgets’ to highlight the fact that the trustees make 144,000 per year for 2 hours of work a week. Or that one of the trustees is a stock broker. Two factors which definitely would affect a readers interpretation of the facts. And get this , the trustees didn’t find out untill the periodic review, which is what? Apparently every three years (almost), the length of time of the investment. Who ever heard of a three year periodic review? I don’t believe a word of it. They are totally blowing smoke up the publics butt, and the news , the epitome of half assed journalism, goest rigt along with it.

  3. WNYMind July 26, 2008 at 11:05 am #

    The Buffalo News has done a horrible job investigating this story. The bloggers need to continue to stay on top of this one. The only way the facts will get out will be if we all keep posting information. When a critical mass is out there, then maybe the Buffalo News will pick up our posted information and take credit for it.

    We still don’t know all of the motives of the Wendt trustees. If their concerns about the poor are genuine, then I would expect to see a shift in their funding (i.e. less funding for the arts and more for the poor). On the other hand, if it is business as usual, we will see more money going to the usual suspects.

    There is also the issue of discrimination against the Seneca that keeps surfacing. This needs to be explored further. The question is, why target the Seneca while the casino in Hamburg, OTB, Lotto, etc… are ignored? If gambling in Buffalo is the target, then why isn’t the Wendt Foundation trying to shut down the lottery outlets all over the city, particularly the ones in minority communties on the West Side and the East Side of Buffalo?

  4. Cultivate July 26, 2008 at 12:13 pm #

    WNYMind said:

    “The question is, why target the Seneca while the casino in Hamburg, OTB, Lotto, etc… are ignored? If gambling in Buffalo is the target, then why isn’t the Wendt Foundation trying to shut down the lottery outlets all over the city, particularly the ones in minority communities on the West Side and the East Side of Buffalo?”

    Excellent questions. It certainly suggests that they are anti-Indian…..or just really pro-NYS….How else do you explain the broader notion of opposing the Indian facility and not the NYS licensed outlets? Now, before jumping down my throat about it being a bad-deal for Buffalo, I’ve not seen what the alternative deals are that are out there–not any that have come to fruition. We certainly need something to bring people in to the City and downtown.

  5. Cultivate July 26, 2008 at 12:16 pm #

    The Senecas are a part of the community (indeed, they are the original community). If the Senecas want to invest in the community in the middle of a down economy and build a $333MM facility that will provide lots of tradesmen with construction jobs, provide permanent jobs the bulk of which are to be filled by local people, take the risk that their investment decisions may not be successful, pay to fix the roads in the vicinity that have needed fixing for years now, pay to remove all of the evironmentally polluted soils left on that two block area by prior industrial users and abusers, pay to promote the area through multi-million dollar advertisement campaigns targeted on folks outside of WNY, and to pay 6.25% (25% of 25%) of their slot gross revenues to the City, let them. Either they’ll succeed or fail. And in the interim, 81.25% of slot gross (the 75% the Senecas keep and the 6.25% the City gets) will stay in the community.

    If folks are concerned about driving out local competition, what competition are you talking about? Having visited the casinos in Niagara Falls and Salamanca, they have fine dining that isn’t all that cheap. And the buffet prices are not all that cheap in cost either. Where are the fine dining restaurants in that neighborhood that the Senecas are going to drive away? Where are the family style, mom and pop places in that vicinity that they going to drive away? And don’t all businesses face competition on a regular basis? Don’t they need to modify their business models to meet with changing public needs and wants, and the latest approaches of their competitors? At what point is it incumbent upon others to invest in downtown, along the waterfront?

    Wendt folks could have put their $2.0MM to better use investing it in the community, I would think. (oh, and query who did pay Jackson & Jackson bills, since the ArtVoice “reply” leaves open the possibility that Wendt pays $ to Religious Network who perhaps pays that money to J&J or contributes it to an entity, like perhaps CBB, who then pays it along to J&J).

  6. Cultivate July 26, 2008 at 12:20 pm #

    And here’s yet another question: if the Wendt Foundation is successful is stopping the casino, what other private investor is going to be willing to invest millions of dollars in Buffalo? The exclave is here. Seems to me many of the concerns are about the limited options available to us. The Senecas are offering some that don’t appear to be in direct competition with other businesses in the neighborhood. And if they can’t do a casino, what else will they do with the land? I suspect a gas station, smoke shop and convenience store. Wouldn’t that be grand?

    Sorry for all the questions, rhetorical and otherwise.

  7. Buffalopundit July 26, 2008 at 12:47 pm #

    From Joel Rose Via BIA:

    buffalopundit wrote:

    > Joel – the amount of money Bruce received is immaterial. He lists
    > himself as a personal beneficiary of Wendt money.

    If the amount is small, I wouldn’t necessarily expect him to remember
    it. It’s on his C.V., which is linked on his BuffaloReport website, so
    he’s not exactly hiding it, is he? Isn’t that how you noticed it?

    > That is a fact that
    > he should disclose in his article if he’s busy virulently defending
    > Wendt against some blogger’s alleged “swiftboating”.

    So you say, but I just don’t find that persuasive. The facts speak for
    themselves. Certainly the recent spate of attacks on the Wendt
    Foundation, with bloggers demanding to see their books (which I believe
    are publicly available) and threatening prosecution for perfectly legal
    and ethical behavior, smacks of swiftboating. That’s not the term I
    would have used, but it’s defensible.

    Your rant was more rational, but it was still a rant, and presumptuous.
    After all, these trustees are the successors, chosen by the original
    trustees, who in turn were chosen by the estate of Margaret L. Wendt to
    oversee the growth and disbursement of her fortune. They’re using their
    values and judgment in doing so. Whose should they use? Yours?

    I went back to Bruce’s article and re-read it, looking for a place where
    he specifically accuses you of participation in a conspiracy, which is
    something you’ve complained of repeatedly. I couldn’t find it. Could
    you direct me to such a passage?

    > Obviously, what Sandy Beach says and does has nothing to do with me.

    You are feeding into his idiocy, and he was replaying your segments from
    the Bauerle show all during his show. I acknowledge that you can’t
    control what he says, but you shopped your story around to various media
    outlets, and what Sandy Beach did with it was totally predictable.

    > I listened to his show today, but purposefully didn’t call in because
    > I find him detestable.

    Well, we do have something in common then.

    > I did call in to Bauerle, because although I
    > disagree with him 99% of the time, I get along with him,

    Yes, I do too, although I haven’t spoken with him in quite a while.

    > and I thought
    > he’d find the whole thing interesting.

    Oh, I’m sure he did.

    > Incidentally, Ron Dobson’s show asked me to come on last night, and he
    > was defending Wendt and CACGEC, and we had a very good debate between
    > about 7:30 and 8:00.

    Sorry I missed that.

    > The NY Times article is here: http://tinyurl.com/66eobd

    Okay, I read it. So let’s see. In 2001, Harrah’s was pitching itself
    to the Senecas (I hadn’t realized that), but soon discovered that the
    Senecas were going to go it alone, with their Seneca Gaming Corporation,
    and financing from a Malaysian billionaire at over 30% interest. The
    Harrrah’s stock was then purchased in 2002, is that correct? Then in
    2006 it was sold at a huge profit (gambling being very profitable) and
    around the same time the Wendt Foundation decided to underwrite our
    lawsuit. By then, it had long been clear that there was not going to be
    a connection between Harrah’s and the Senecas, except as competitors in
    the global gambling market. Since the suit would have the effect of
    diminishing the Seneca Gaming Corporation’s market share and possibly
    increasing Harrah’s, the self-interested thing to do would have been to
    hang onto the stock, would it not?

    I think that what actually happened is something like this. Until they
    got involved in this local fight over a casino, the Wendt Trustees
    didn’t spend a lot of time thinking about whether gambling is a good
    thing or a bad thing. It might surprise you to know that my experience
    was the same. Then, faced with the prospect of a casino in Buffalo,
    they looked at the economic information, the fact that this is a poor
    city and not a tourist destination, and imagined the impact with $200
    million a year being extracted from the area. Unlike you, they
    concluded that would be a disaster for the city, and began to do what
    they could to stop it. (Note that they have never taken a position
    against gambling generally, and not even against a Seneca casino in
    Cheektowaga. That’s a distinction between our view and theirs.) Then,
    in reviewing their portfolio, they realized that holding Harrah’s stock
    wasn’t very consistent with what they were now thinking of undertaking,
    so they got rid of it. I don’t know that this is precisely what
    happened, but you don’t know that it isn’t. To me, it’s the most likely
    scenario.

    But you assume the worst. You take public records, which by your own
    account took very little time to find with a simple google search, and
    then start ranting to all and sundry that you’ve made a great discovery,
    that it stinks and that they’re hypocrites.

    That’s your M.O. You took my interview with Bruce Jackson, back in
    2002, in which as I recall I talked about all the standard reasons —
    economic and social — to oppose a casino here, and concluded that
    therefore our legal arguments were a sham because I didn’t discuss them
    in the interview. That’s quite a leap. I’ve ALWAYS maintained that my
    reasons for opposing a casino went way beyond the legal objections,
    which I’ve always mentioned as the last point if I got to it at all. At
    that time, we didn’t even know about the legal argument that ultimately
    prevailed, involving the absence of a land claim. There was an even
    more profound legal argument, based on the principle that no Federal law
    can give a governor powers denied to him/her under the state’s own
    constitution. But we lost in state court (Dalton v. Pataki) and the
    Supreme court declined to review the case. So what you “discovered” is
    something I’ve always been upfront about.

    > The point about Bruce’s kids? Minimal. But the news reporting has
    > been that Wendt has paid $2 million to lawyers. Bruce’s kids are
    > among the many lawyers. People have denied that they’ve received a
    > penny, but I have no corroboration of that fact, and I’ll believe it
    > when I see it in a non-hearsay manner.

    I don’t give a damn what you believe. I believe my sources and you go
    dig if you want sources you can believe. But I hope you’ll try to avoid
    making accusations based on what you don’t know. You’d think a lawyer
    would know better than that.

    > That’s first of all.

    Okay. I’m underwhelmed so far.

    > Secondly, without the outlay of money to the Albany firm, there’s
    > probably be no lawsuit for them to tag along on, so they’re deriving a
    > benefit for themselves either way you slice it – either monetary or
    > experience-wise, so the bottom line is that any such personal
    > relationship should be disclosed.

    Your assertion isn’t accurate. The Jacksons could have tagged along on
    the much smaller case that would have existed had the Wendt Foundation
    not chosen to enlarge it with an infusion of money.

    What your criticism of Bruce on this point comes down to is not
    disclosing that the case in which he was volunteering his efforts became
    an opportunity for his kids to do some volunteer work as well. Really?
    You have a problem with that?

    Consider this: without the lawsuit, you’d have nothing to use to try to
    rise from obscurity by shopping your story around to every media outlet
    that would listen and then having your sidekick complain when some of
    them used it without attribution. Maybe you should disclose the Wendt
    Foundation as your benefactor.

    To all this, I say: So what? Life deals us what it deals us.

    > When Fox News reports on something in TV Guide, it has to reveal that
    > they’re both owned by the same parent corporation. The same principle
    > applies.

    It’s good journalistic practice. I don’t believe there’s any
    requirement, and again, let me ask you: Why are you focusing on the
    Jacksons, who you have failed to establish ever took a penny from the
    lawsuit, when Sandy Beach’s rants are a clear conflict with his ad
    royalties from SGC? Why doesn’t that bother you?

    > There were three comments of yours that had gone through the filter
    > and then somehow (not me) were stuck back into moderation. Those
    > three I did see and approved to go through.

    Three? I thought that there were only two. In any case, thank you for
    that.

    I just checked, despite my disinclination to view your site. I didn’t
    see the missing comments.

    > Chris Smith has added these questions for you, which you won’t see if
    > you don’t go to my site, so I’ll republish them here:
    >
    > Why did you choose to organize CACGEC as a program under the Network
    > of Religious Communities rather than any other 501c3 organization? As
    > you certainly are aware, as a faith-based organization, the NRC is not
    > required to file Form 990 with the IRS which opens up several
    > questions as to how your organizational activities are funded.

    Actually, I was not aware of that, and in general am not well-versed in
    tax law. But the way you’ve stated it is backwards. The Network called
    the first meeting of CACGEC and really started us. I had thought Stan
    Bratton, the Network’s Executive Director, would lead it, but he didn’t
    want to and I was selected instead. We continued to meet at the Network
    for quite a while, and it was very natural for them to handle our
    finances. That way we did not need our own accountant, etc.

    It’s a bit ironic, as I myself am not religious at all. But I
    appreciate the Network’s nurturing of CACGEC.

    > What is the current 501c3 status of CACGEC with the Department of
    > State in New York and with the Attorney Generals office? According to
    > NY records ( http://tinyurl.com/CACGEC )
    > CACGEC is listed as being
    > incorporated September 7, 2006 as a domestic not for profit
    > corporation with no registered agent. Did you file the requisite
    > paperwork for your 501c3 status with the NY Attorney General?

    The creation of the corporation was the first step in establishing
    CACGEC as an independent entity for purposes of doing things that a
    religious organization could not do or may choose not to do. There was
    no immediate need, but something that I thought might be useful some
    time in the future. We discussed it and decided to take that step. As
    I understand it, that’s a Federal designation, not state. When I looked
    into filing for that, I could not tell from the IRS web site which of
    two forms we should be using, and so I put it aside for the time being.
    I would have asked our attorney to handle it, but he was so busy with
    the first Federal case that I didn’t want to bother him. There was no
    urgent need, since our existence as a network program provided tax
    exemption. So right now the corporation is just floating out there,
    unused, as we’ve been focusing on the lawsuit. CACGEC’s continued
    functioning is as a program of the Network.

    > If so,
    > when? What is the status for that request? Will you disclose what
    > monies have have been received, used, and disbursed through NRC for
    > your purposes at CACGEC?

    All of our funds have been deposited in a CACGEC subaccount of the
    Network’s account. Disbursements are made from that same subaccount. I
    will not disclose who has donated what amounts to us, as that would be a
    violation of the donors’ privacy. But I will tell you that our largest
    donation to date has been $5000, and the other amounts are nowhere close
    to that.

    You need to understand, with the exception of the initial payments to
    Richard Lippes, CACGEC has not paid the legal bills, nor exercised any
    control over who is paid, and how much. I don’t know how much we’ve
    spent in the aggregate, and I’m not going to track down that information
    for you, but I doubt if it’s been more than $30,000, and that’s over the
    course of seven years. The Network may be willing to share that
    information with you, which would be fine by me.

    You may recall a big media campaign a few years back that was funded by
    a wealthy patron from Rochester. That was not run through us in any way
    — it was a totally independent operation. I WISH we had run it.

    > As it currently stands, unless you have a
    > 501c3 exemption, your monies and disbursements are taxable.

    You really ought to find out what you’re talking about before you
    blather on about our obligations. The NETWORK is a 501(C)(3). The
    Network writes checks on our behalf. From a legal point of view, we are
    the Network. Get it?

    > Using the
    > charities search engine at the NY Attorney General’s Office, neither
    > CBB nor CACGEC is a tax exempt organization. Even though both
    > organizations filed for non-profit status in New York State in 2006.

    That’s because the part of CACGEC that actually does anything is part of
    the Network.

    > I have many more questions about this organization, the Wendt
    > Foundation, CBB, NRC, and the people involved. I am certain that you
    > will be as honest and transparent as necessary to state all facts for
    > the public record. I eagerly await your response.

    I cannot answer with any authority questions about the Wendt Foundation
    or CBB. You’ll have to ask the Trustees about the Wendt Foundation, and
    Dianne Bennett about CBB. And although I do have a relationship with
    the Network, it is really in the nature of being a guest. I am not the
    appropriate person to answer questions about it. Contact Stan Bratton.

    I’ll answer one more question, from odn:

    > So the CACGEC is a basically a group of religious nut cases, hiding
    > behind a “citizen’s group” who thinks they can tell the people of WNY
    > what is good and what is not for a community.

    Try and get this through your head: We are essentially guests of the
    Network. The Network itself is the old Council of Churches, and
    consists of long-standing denominations. Folks you may have heard of,
    like Roman Catholics, Methodists, Presbyterians, Muslims, Jews, etc.

    CACGEC is not religious itself. We have no ideological or religious
    tests. I myself am an atheist, not that that’s any of your business.
    Some of our members are religious, but you will never find us making an
    argument based on religion.

    > How dare you pitch your religious beliefs on a community and mask them
    > as a “citizen’s group”!

    Read the Constitution. It protects speech. Even idiotic speech.

    I hope everyone realizes that I don’t have to answer any of these
    questions. But it is my nature to be forthcoming, and I don’t like to
    leave accusations dangling out there unanswered. At the same time,
    questions which suggest some sort of impropriety on our part, which
    demand responses, as if the questioner had been appointed grand
    inquisitor, really just make me angry. So I’ll do my best to continue
    to be forthcoming, but there is a limit to the amount of abuse I’m
    willing to tolerate.

    This entire episode has been a terrific example of no good deed going
    unpunished.

    You may feel free to post my responses on your web site if you are so
    inclined.

    Joel Rose
    co-Chairperson, Citizens Against Casino Gambling in Erie County
    http://NoCasinoErie.org

    ——————————————————————

    The views expressed in this message are those of the author or of those
    quoted in the message, if any, and have not been monitored, reviewed, or
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  8. laughingoutloud July 26, 2008 at 1:59 pm #

    Why are their bills being paid thru a 3rd party? If Rose was as forthcoming as he pretends he is Why didn’t his group get their own tax exemption and pay their own bills. Too conspicuous maybe?. The more he talks , the more convoluted and creepier the whole thing is getting. The “Network” aka the “Illuminati” aka the control freaks. But I particularly like the way he “Thinks” something went down, and that he is answering questions because he is such a good guy. What a crock. He’s, doing a soft shoe routine.

  9. mike hudson July 26, 2008 at 3:32 pm #

    just an aside on the filter thing, i wrote a lengthy pro-pundit comment last night that never made it. so the conspiratorially minded should put a sock in it.

  10. Administrator July 26, 2008 at 9:35 pm #

    A good percentage of blog spam comments are related to online betting parlors and gambling. Our spam filter was configured to block comments that use common words used in those comments. Unfortunately, due to the tenor of the discussion here this week, many comments were wiped away based on those configurations. I have made some adjustments to reflect the current discussion. If your comment doesn’t appear, send an email to chris@wnymedia.net or buffalopundit@gmail,com and we’ll try and rescue it.

  11. Thomas July 30, 2008 at 8:48 am #

    Let us not forget the other smaller conflict. Michael Jackson is a prioncipal at the Town Ballroom. A Seneca Casino would crush their ability to bring acts in.

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