The root cause of the $1 million plus deficit afflicting the city-owned Carolina Theatre is a mystery to a layman like me. Accounting ain’t my thing.
The shocking shortfall totals about 20 percent of the theater’s current annual revenue. It may well stem from pronounced poor accounting, but I wondered if the city drilled into the idea that more than mistakes or incompetence were at play.
Three top officials lost or left their jobs in the wake of this reversal of fortune. Those key figures: CEO Bob Nocek, chief operating officer Aaron Bare and finance director Sam Spatafore.
The governing board of trustees appears to be unscathed.
So, was the shocking mismanagement that nearly crippled the theater ever considered possibly criminal?
I went to Durham City Manager Tom Bonfield. He noted the independent forensic audit he’d asked for. “While the audit revealed a significant number of problematic accounting procedures,” Bonfield wrote, “no evidence of fraud or theft was identified.”
“While poor management practices abound there is no evidence of “money unaccounted for.”
“Since the Carolina Theatre non-profit has no money, “ Bonfield continued, “there is no point and likely no cause to claim damages even if there was money.”
Bonfield is on his game to the extent he can be with this near-indecipherable mess. The city has orchestrated a pricey partial bailout that requires the theater’s private supporters to provide matching funds.
Doesn’t seem right, but the alternative was to bring the curtain down.
Now, on to questions about the board. Where is the heat on the theater’s trustees, which include some area heavy hitters?
They were steering the ship, yes? No?
I sought to explore oversight and accountability with Chairman Scott Harmon and other noteworthy board members. I asked for their take on what happened: when they found out about the deficit, etc.
Another shocker: No one wanted to talk about it.
Harmon suggested I go to new interim CEO and president Dan Berman, donating his time to step in and keep the lights on.
Berman, though, wasn’t around when the ship struck the shoals. He’s not on the board, either.
I wrote Vice Chair Lisa Long Jackson, who happens to be senior VP at a major bank.
On a Women in Networking site, Jackson states: “I have been working as a financial professional for more than 25 years. There are no surprises, everyone has a story.”
And this is a story. So was she surprised about the massive Carolina Theatre deficit? She suggested I talk to Berman.
I followed with, “Aren’t you all in charge?” She followed with nothing.
I made overtures to theater board trustee and City Council member Cora Cole-McFadden, who’s been planning and monitoring city spending and performance for years. And veteran County Commissioner Ellen Reckhow, who does likewise for the county board.
Reckhow said I should contact (insert drum roll here): Dan Berman. Cole-McFadden didn’t write back by my deadline.
On to theater trustee Asher Hildebrand, chief of staff to U.S. Rep David Price. He emailed, “I’m afraid I’m not going to comment on this matter.” And referred me to Dan Berman.
Finally, I tried theater board member Michael Schoenfeld, who leads communication and advocacy for Duke University. He said he would pass on the opportunity to comment, and pointed me to, well, you know who.
Again, CEO Berman is basically irrelevant to what I wanted to know. The theater board battened the hatches, folks.
Board chairman Harmon reportedly learned of the deficit in May 2015. I inquired as to when he informed City Manager Bonfield. Asked, not answered.
Bonfield told me it was in October 2015, from Harmon and others.
“The information provided at that meeting was incomplete,” Bonfield replied. So he requested “more thorough information from CT ...”
Sounds like it took five months or so to break the news about this fiscal nightmare to the man who managed the city.
The board members’ decision to deflect questions is a show stopper. They should stand up on stage and be counted.