A national philanthropy watchdog group wants a state investigation into what it describes as "suspicious and potentially illegal" salaries and activities by trustees of the St. Paul-based Otto Bremer Foundation, whose pay rivals that of CEOs at other foundations.
The National Committee for Responsive Philanthropy (NCRP) sent a letter to Minnesota Attorney General Lori Swanson saying three trustees of the foundation violated "many principles of good governance" by removing the executive director and taking control themselves. It pointed to the trustees' decision to increase their own compensation by more than 1,000 percent in a decade.
"I certainly don't think Mr. Bremer would have envisioned this level of compensation," Aaron Dorfman, NCRP executive director, said on Friday.
The foundation declined to make the trustees available for comment, but a spokesman said the compensation was justified by the foundation's unusual position as a bank holding company.
Jon Austin, a media consultant representing the foundation, said the foundation's structure as a bank holding company and investment manager made comparisons with other philanthropic organizations "difficult if not impossible." Trustee salaries have increased to reflect their duties, he said.
The late banker Otto Bremer established the nonprofit charitable trust in 1944, transferring ownership of his bank holdings to the foundation. According to the foundation website, "This farsighted act ensured that a significant portion of the banks' earnings would be reinvested in communities."
In 2013, the foundation provided approximately $38 million in grants and "program-related investments" to support more than 700 projects "that respond to community interests," Austin said.
The foundation owns 92 percent of the stock of Bremer Financial Corp. and manages a $130 million investment portfolio. The three trustees are full-time employees of the foundation who "directly and actively manage the foundation staff who are accountable to the trustees who are in turn accountable to the regulatory agencies that oversee them," Austin wrote.