Minnesota Orchestra Board Lied About Finances (Maybe)

November 27, 2012 at 07:18 PM · Looks like the board made a plan to channel funds toward paying for their building, and made a plan to use the resulting deficits as an argument for cutting musicians' salaries:

http://www.startribune.com/entertainment/music/180782151.html?page=all&prepage=1&c=y&refer=y

A response from Polyphonic.org:

http://www.polyphonic.org/2012/11/26/cooking-the-books/

Replies (9)

November 28, 2012 at 02:07 AM · Damn...breaks my heart to see musicians in these situations. :(

November 28, 2012 at 04:21 PM · Oh, no. No maybe about it. They lied. And not only to the Minnesota public, but to the Minnesota legislature.

In March 2010, when seeking $14 million in taxpayer money for the $40-$50 million lobby renovation at Orchestra Hall, CEO Michael Henson said, "On the financial front, we have announced balanced budgets over the last three consecutive years, and we are facing the current economic downtown with stability." In 2009, they realized they were going to be running massive deficits. **But** they decided to take massive draws from the endowment in 2009 and 2010 to report balanced budgets, specifically so that the legislature would be more likely to approve their request. Then, once they'd gotten what they wanted from the taxpayers, and were beginning negotiations with musicians, they would say that their financial situation had worsened dramatically, and that 30-50% cuts in salary were necessary. None of this is speculation; it's all spelled out very clearly in the Strib article linked above. I have no idea what this means - if you can be punished for lying during testimony to the state legislature - but it seems to me regardless of the legality of it, that there are major ethical problems here, and that Mr. Henson should lose his job.

I'm writing an entry about this on my blog Song of the Lark right now. So stay tuned, folks...

November 28, 2012 at 04:56 PM · Henson uses an interesting choice of words: ". . . we have announced balanced budgets . . " rather than saying they achieved, attained, or just plain had balanced budgets. I could "announce" tomorrow that I am indeed the Queen of Sheba. Doesn't make it so.

November 28, 2012 at 07:12 PM · Excellent point.

November 29, 2012 at 04:31 AM · You sure he didn't say "renounced" instead?

November 30, 2012 at 07:35 PM · Management has shot back with a slippery editorial in the Star Tribune that never really addresses the article linked in the original post on this thread. "We are perplexed by this standoff," Jon Campbell and Richard Davis, the bank executives and MOA board chairs, write in their editorial. "What purpose can it possibly serve?" (Poetic, isn't it? It can be a haiku, too, if you want it to be.)

Robert Levine criticizes it here.

Drew McManus criticizes it here.

Then Robert Levine leapfrogs off Drew McManus's entry here.

December 2, 2012 at 05:34 PM · Here's a transcription of an interview that Tony Ross, cellist, and Doug Kelley, a representative for management, gave on Almanac, a public television news show in the Twin Cities. The whole thing is interesting, but here's an excerpt...

Host: However, Mr. Henson in January 2010, talking about bonding money in front of the committee said, “On the financial front, we have announced balanced budgets over the last three consecutive years. We are facing the current economic downturn with stability.” But that wasn’t the case.

Kelley: The orchestra’s 110 years old. It’ll be on for a long time after this dispute is over. But. So when you take that $10 million out of the endowment and you cover your expenses, you match income with expenses. That’s a balanced budget by anybody’s definition.

So here's the best answer MOA management can come up with:

1) The orchestra has been around for 110 years, therefore we were facing the economic downturn with stability, and

2) If we have to take out massive unsustainable amounts from our endowment to cover the year's expenses, all while trumpeting our financial health to the public and the legislature, that means we were facing the economic downturn with stability.

I am so glad I don't have to sell that argument.

December 21, 2012 at 02:10 AM · More headaches for Minnesota Orchestra management...

***

"Lawmakers Call For Hearing Into Minn. Orchestra Finances"

http://minnesota.cbslocal.com/2012/12/20/lawmakers-call-for-hearing-into-minn-orchestra-finances/

More than a dozen House lawmakers signed on to a letter to Minnesota Orchestra management, calling for a hearing to find out if they were misled before awarding millions of dollars to the Orchestra.

The stinging letter from 14 Democratic House members raises questions about the ethics of Minnesota Orchestra management.

“Which is it? Are you facing an economic downturn with stability? Or are you running deficits?” asked State Representative Jim Davnie (DFL) Minneapolis. “Did you put three years of balanced budgets on the table successfully? Or did you not?”

***

There will be a hearing regardless of the status of the lockout.

Has anything like this ever happened in the history of American orchestras??

December 21, 2012 at 03:55 PM · Gotta love that corruption

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