Thursday, February 07, 2002

Dater's widow blasts charity board

New filing claims mismanagement

By Dan Horn
The Cincinnati Enquirer

        More accusations of mismanagement were leveled Wednesday against one of the largest charitable foundations in Cincinnati.

        The widow of Charles H. Dater claimed in court papers that the directors of her husband's foundation have deprived charities of millions of dollars.

        Ann Dater, Mr. Dater's third wife, said the directors of the foundation have paid themselves “excessive compensation” over the past decade.

        The result, she said, is the loss of more than $3 million that would otherwise have been available to donate to charity.

        The Charles H. Dater Foundation, with $60 million in assets, has donated millions to hospitals, youth programs and other charities since his death in 1993.

        Mrs. Dater's attorney, Quintin Lindsmith, said the management of the foundation has attracted the attention of Ohio Attorney General Betty Montgomery, whose office monitors the state's charitable foundations.

        He said officials at the attorney general's office are considering removing the directors who oversee the foundation.

        “We've been in serious discussions with the attorney general,” Mr. Lindsmith said.

        A spokesman for the attorney general declined to comment Wednesday, saying he could not talk about “any discussion that might be occurring.”

        The directors of the foundation said they have done a good job.

        “The foundation couldn't disagree more with the allegations,” said Roger Ruhl, a spokesman for the foundation. “We believe the foundation has acted properly.”

        The dispute over Mr. Dater's fortune, which he inherited, has been raging since his wife sued in 1997 over the way her husband's $100 million was divided between the foundation and family trusts.

        Mrs. Dater claimed her husband's lawyers and brokers conspired to take control of his assets by putting the money into the foundation, which they oversee as its directors.

        Mrs. Dater said the directors tricked a senile, sickly Mr. Dater into putting them in charge of his foundation. She said they then began paying themselves excessive fees and annual salaries of nearly $80,000.

        Court records include medical reports that suggest Mr. Dater suffered from dementia around the same time he signed crucial documents about the foundation. The records also show that Mr. Dater's lawyers and brokers were paid more than $4 million in fees from 1990 to 1997.

        “This case is about a broad scheme ... to plunder the very great wealth of a very sick man,” Mrs. Dater claimed Wednesday in legal papers filed in Hamilton County Common Pleas Court.

        Mr. Ruhl said the directors' only interest is in fairly distributing funds to charity. He said the salaries paid to the directors reflect not only their work as the foundation's managers, but also their work as the foundation's staff — reviewing 500 grant requests each year and awarding about 100 donations.

        “There is no staff at the Dater Foundation,” Mr. Ruhl said. “The directors are performing staff duties.”

        The next hearing on Mrs. Dater's lawsuit is set for Wednesday before Judge Dennis Helmick.

        No matter what happens with the lawsuit, the attorney general's office still could take action against the directors if it finds significant problems with the way the foundation is run.


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