0.8 Chapter six: attempting a turnaround, 1988-1992  (Page 10/19)

Just as this illustrious new class of trustees was ushered in to oversee the Society's new era, bad news came from Allen Greenberg, the architect hired to implement certain aspects of the Society's new master space plan. At the September meeting, Greenberg discussed "the status of the building" and "the con­sequences of delayed maintenance" and stressed that "after the building has been renovated, constant maintenance would always be necessary." Evidently, the condition of the building was so severe that the safety of the collections was in doubt. The roof was in particularly bad shape and would require emergency repair independent of other long-term work that needed to be done. The Society allo­cated $125,000 for that work while it hired building consultants to assess the total amount of work that was needed.

The bill for the Society's deferred maintenance had come due. After exten­sive study over several months, it was determined the Society's eighty-five-year-old building was badly in need of $10 to $12 million worth of repairs. These were not capital improvements, as had been budgeted in the bridge plan; they were re­pairs required to make the building safe to house the Society's valuable collections. Concern for the collections being paramount, the Society decided to move more of its collections into off-site storage, this time with the requirement that the stor­age facilities be absolutely first-rate. Neither the capital repairs nor the cost of first-class off-site storage had been factored into the Society's operations budget, although some of these costs were later funded with restricted grants.

To make matters worse, the investigation by the New York State attorney gen­eral had still not been resolved. Nearly a year after launching the official inquiry, the attorney general's office continued to probe deeply into all aspects of the Society's operations. In a report to the board of trustees, Barbara Debs described the effect of the investigation in this way: "The long delay in closure of this mat­ter has had serious consequences... on nearly every front (for example, more aggressive fund-raising would have been possible if this matter had been settled in a timely fashion). This though is not offered as an excuse. . . . This has been a crisis year, so one can accept, while protesting, the continuing presence of the AG as part of that crisis. . . . [But] it will be ironic and tragic if the AG's continuing interest in us prevents us from building on our success."

In a letter to the attorney general written in June 1990, Norman Pearlstine described in detail the impact of the continuing investigation on fundraising, board building, press relations, and staff time. Pearlstine wrote that major donors had indicated their reluctance to assist the Society as long as the investigation remained active. Pearlstine indicated that attracting new board members and generating positive press were similarly inhibited by the shadow of the investigation.

But perhaps the most damaging aspect of the continuing investigation were the costs—both direct and indirect—to an institution whose resources were already depleted. Pearlstine wrote of the "enormous amount of staff time and energy (hence salaries) consumed by the investigation. All senior staff, in a very thinly staffed institution, have been heavily involved in providing information and professional expertise. Our new president estimates that she has spent fully a quar­ter of her time on this matter in the ten months she has been at the Society." There were direct costs as well. Pearlstine reported that as of July 17, 1989, the Society had spent "in excess of $600,000—nearly 10 percent of our total operating bud­get—on legal fees connected with the investigation." By the time the investigation was concluded, the Society would spend approximately $1 million on legal fees.