LINCOLN, Neb. (AP) — The board responsible for overseeing Goodwill Omaha allowed the prominent charity to stray from its core mission of providing jobs for the needy and disabled while its CEO made nearly $1 million a year, Nebraska’s attorney general said Tuesday.
Attorney General Doug Peterson announced that the organization has signed a formal agreement that requires Goodwill Omaha to change how it recruits board members, awards bonuses and makes large purchases.
“It’s clear that Goodwill lost focus on what their true mission was,” Peterson said at a news conference to announce the findings of an investigation and release a 44-page report.
Peterson said he isn’t pursuing criminal charges against Goodwill Omaha officials or trying to claw back any of the payments awarded to former CEO Frank McGree. He said he has confidence in Goodwill Omaha’s new leaders, describing the charity as “a completely changed and properly directed organization.”
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Peterson said the investigation focused largely on Goodwill Omaha’s board, and not its executives, because state law limits his authority to investigate executives. He said lawmakers should consider changing the law to give him that power.
The attorney general’s investigation was prompted by an Omaha World-Herald series that found top executives were the highest paid of Goodwills nationwide.
Goodwill Omaha is one of Nebraska’s largest and best-known charities, but the newspaper and attorney general both found evidence that the organization had started to resemble a for-profit business. Goodwill Omaha ran eight retail stores in 2000, but has since opened eight new stores, moved seven others into new or replacement facilities and closed one.
McGree received total compensation of $933,444 in 2014, and the number of managers and executives making more than $100,000 a year increased from five to 15 during his tenure, according to the attorney general’s report.
Meanwhile, the report found that most of the group’s retail workforce earned the minimum wage. Even though executives typically make more than frontline employees, “such a glaring disparity raises questions when the stated goal of the organization is to benefit the disadvantaged” and create jobs for those struggling to find employment, the report said.
Peterson said the salaries fell into a legal gray area, and “it’s difficult for us to come in and say they crossed the line.” But he argued that the board should have based executive salaries on the number of people served instead of revenues.
The report noted that the number of people served since 2011 has dropped even though executive salaries were increasing and more stores had opened. According to employee surveys, many frontline workers believed the executives were out of touch and overpaid, the report said.
“Goodwill Omaha’s continued focus on increasing revenues and profits, rather than on mission work and people served, was not lost on its employees,” the report said.
After he was forced out of the job in 2016, McGree filed a federal lawsuit alleging that the charity still owed him more than $1 million in severance payments and retirement benefits. The lawsuit was dismissed last week after he and Goodwill Omaha reached an undisclosed agreement. McGree did not immediately return a phone message on Tuesday.
In a statement, Goodwill Omaha said it cooperated with the investigation and will comply with the agreement. If it fails to do so, the attorney general could file a lawsuit against the charity.
“We also appreciate the attorney general’s courtesy and consideration extended to Goodwill by recognizing and citing progress made by current Goodwill leadership to bring the agency back onto a good path,” the statement said.
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