Aviation museum needs a governance overhaul
It is almost impossible to read Attorney General Ellen Roseblum’s 27-page report on the Evergreen Aviation & Space Museum without pausing periodically to ask, “What WERE they thinking?”
Actually, it’s easy enough to understand the thinking of John Irwin, Mike Hines and Blythe Berselli, Evergreen lieutenants on the for-profit side of Highway 18. At one point, desperate for cash to meet payroll and stave off creditors as the aviation empire spiraled toward its eventual bankruptcy, they treated the museum as a short-term piggybank.
But what about the two dozen or so people, leading figures in their fields and communities, who were charged with safeguarding the museum’s interests as independent board members?
Granted, the board of directors was not consulted when Irwin first demanded $725,000 of the museum’s available $750,000 cash, nor when Evergreen Aviation commandeered the cash through direct bank action after the museum’s financial director refused to make a transfer. But later, the board should have condemned the intermingling of funds, and its members should have taken notice when the financial director disappeared from her position and left the state.
The museum is an amazing development, a grand showplace and a magnificent asset for McMinnville, the state and region. But make no mistake – it is in financial peril.
As the AG report notes, “The museum owns relatively little of what the public sees. The museum’s assets consist largely of the Spruce Goose, a limited number of exhibits, leasehold improvements and office equipment. The buildings and land on which it operates are owned by other entities.” We hope the IRS, next stop for the Oregon AG’s report, will not threaten the museum’s nonprofit status based on past commingled finances. The museum, already owing more than $1 million in back property taxes, does not need additional financial burdens.
The museum must make increased rent payments while facing potential loss of exhibits owned and pledged as collateral by for-profit parties, and no longer has its major corporate benefactor. The institution will need to develop more patronage, fundraising success and broad community buy-in.
Given that, the one-paragraph response to the AG’s report was not an auspicious beginning, with claims that were demonstrably at odds with the state findings.
- The Department of Justice lays out a blueprint for museum action. Recommendations include:
- Eliminate for-profit Evergreen loyalists, except for Del Smith, from the museum executive committee, replacing them with “disinterested directors.”
- Recruit new board members with expertise in leading nonprofits, organizing fundraising programs, building community support and engaging in long-term strategic planning.
- Engage legal and financial teams with nonprofit expertise to audit the books and overhaul the operational and financial structure.
- Evaluate, with legal assistance, whether continued operation of the theater, water park and chapel represent unrelated income that might jeopardize nonprofit status.
There are many more concerns and recommendations in the AG report, all of which add gravitas to the state’s concluding remark: “The Department hopes the museum can learn from this review and improve its governance and operations to ensure its long-term future.”