Pat Haden, who will officially step down as USC’s athletic director on June 30, used his position on a foundation to enrich himself and his family while he also funneled a vast majority of scholarship money towards USC and away from other schools, according to an investigation by the Los Angeles Times.
As a board member of the George Henry Mayr Foundation, Haden is allowed to steer the foundation in whatever direction he wants to. However, making himself richer while his foundation faces a declining donor base goes against everything Mayr stood for. Furthermore, it appears that Haden used his position atop the charitable organization to give money to his own employer, USC athletics.
The Times pulled tax returns from every year of Haden’s time as a board member, and they show that Haden has redirected about 10 percent of the Foundation’s endowment toward his family. Tax returns are only available from 1999 to 2014, but they show a consistent pattern of Haden paying himself large sums for little to no work:
Under Haden’s leadership as board chairman, however, the $25-million foundation became a lucrative source of income for him and two of his family members — even as its scholarship spending plunged to a three-decade low and the size of its endowment stagnated, a Times investigation has found.
Haden, his daughter and sister-in-law together collected about $2.4 million from the foundation for part-time roles involving as little as one hour of work per week, according to the foundation’s federal tax returns for 1999 to 2014, the most recent year available.
Half of that, about $1.2 million, went to Haden. His annual board fees have been as high as $84,000; the foundation paid him $72,725 in 2014.
When the Times asked a law professor to put the payments in context, he said, “I’ve never heard of fees that large.” Another professor said that the payments would be uncommonly high for a foundation with twice the endowment. The George Henry Mayr Foundation has no office, no staff, no website, and a history of not paying its directors. It’s also been fairly balanced about its donations, but under Haden, more money has been redirected to USC every year to the point that the school now receives more than every other recipient combined. Not only did he mostly give money to USC scholarship aid, he paid around $255,000 to USC athletics, an even clearer ethical misstep.
Haden refused comment to the Times, as did Wells Fargo, who manages the endowment. Their investigation gets into the history of the foundation, which began its activities in 1949 with a $3-million endowment and stated in its charter “that disbursements be used ‘exclusively’ to provide scholarships and pay incidental expenses for ‘deserving, needy and worthy young men and women.’” Haden’s skimming off the top in the face of decreasing donations isn’t technically illegal, but it goes against the spirit of the foundation. As one of George Mayr’s relatives told the Times: “Under no circumstances would Mr. Mayr agree to pay money like that to individuals.”
A USC spokesman told the Times that Haden would be stepping down as chairman and would no longer be paying himself out of the foundation’s coffers. He will, however, keep his board seat.