Incompetence or Corruption?

To some, the money woes of NCSA may appear to be results of incompetence, but that doesn't seem to be the case. As Begos says in the today's WSJ, "More than 20 people - many of them with substantial business experience - serve on the (NCSA) foundation's board of directors."

The corruption of a powerful few in both public and private entities is a more likely factor.

By Kevin Begos in today's Winston-Salem Journal:

In July 2001, the N.C. School of the Arts Foundation put its endowment under new management, hoping for higher returns. Instead, it got the opposite, said Jeff Whittington, a former president of the foundation. Although he declined to name the new consultant, records obtained by the Winston-Salem Journal and confirmed by officials show that it was Bank of America and its subsidiaries. Tax returns suggest that Bank of America, based in Charlotte, was paid hundreds of thousands of dollars in fees over the more than two years it managed the endowment. The fees "jumped up to about twice'' the level that a fund manager in Atlanta had charged the foundation for many years, Whittington said, yet the endowment lost 3 percent of its value each year that Bank of America had the account.
The foundation declined to provide details about the amounts paid for endowment fees, or details of millions of dollars in salaries, fees and management expenses it listed on federal tax returns over the past six years.
...Bank of America's contract to manage the NCSA endowment was part of a series of ties with the school. In late 2000, the bank gave the school $250,000 for minority scholarships. Its contract to manage the endowment came the next July. In January 2002, Hobgood announced that the School of the Arts was exploring the idea of opening a satellite campus in Charlotte. In early 2003, Hobgood said that Bank of America would underwrite $50 million in bonds for the Unity Place development, a project that never got off the ground.
...The lack of clearly defined rules about who is in charge of foundations caused other problems at NCSA. On July 16, 2004, Chancellor Wade Hobgood sent an e-mail to trustee Steve Karr. "We have a war about to happen," Hobgood wrote.
The NCSA Foundation had just refused to pay two bills that Hobgood had submitted - $375 to US Airways Club and $682.35 for June entertainment.