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Post date: February 23 2004

Attorney General Reaches $1.5 Million Settlement With Directors Of The Grand Marnier Foundation

State Attorney General Spitzer today announced that he has reached an agreement with the Grand Marnier Foundation to settle allegations that the officers and directors of the foundation used their positions to enrich themselves improperly. The $1.5 million in funds will be restored by the named defendants to the charity to help it fulfill its grant-making obligations.

In August 2001, Spitzer's office had commenced a lawsuit in Manhattan Supreme Court against six directors of the Grand Marnier Foundation who had each received an average of $50,000 annually in compensation for rendering the basic services as board members. The lawsuit alleged that the Foundation officers failed to meet their fiduciary responsibilities by paying themselves excessive compensation for their services.

The agreement, signed earlier this month, reconstitutes the board of directors at the Foundation.

The Grand Mariner Foundation, established in December of 1984, is a private grant-making philanthropic organization that widely supports the arts.

Private foundations are tax-exempt charitable not-for-profit corporations or trusts that are funded by one person or a small number of persons. Because these private non-profits do not solicit public contributions, often they are not held to the same public scrutiny. However, to assist in policing abuse, private foundations are made subject to the more restrictive "private foundation rules" as a matter of both federal and New York law. These private foundation rules address excessive compensation and benefits that a foundation's officers and directors pay themselves or their relatives from the foundation's charitable assets and self-dealing transactions between a foundation and its officers or directors or some entity in which they have a financial interest.

"Our goal is to help non-profit organizations flourish and meet their charitable mission. Many New Yorkers give generously of their time and resources to serve on the boards of private foundations. When board members violate the public trust by lining their own pockets, the good work done by the organization is overshadowed," Spitzer said.

Three existing members will continue to serve on the board: Maxime Coury, Jacques Marnier LaPostolle and Francois DeGasperis.

New members appointed are as follows:
Isabel Wilcox – an award-winning Curator; Hattie Jutagir, Director of Development at Lincoln Center Theater in New York City; Raymond Sokolov, a food journalist and cookbook author; Serge Bellanger, an executive at a French bank based in New York; and Francois Letaconnoux, an investment banker living in New York.

The case was handled in the Attorney General's office by Assistant Attorney General Barbara Quint of the AG's Charities Bureau.

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