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Oakland Co. ups clout over DIA spending, bonuses

Jennifer Chambers
The Detroit News

Oakland County has gained new power to limit executive compensation at the Detroit Institute of Arts in the wake of a bonus scandal at the museum, with Wayne and Macomb expected to follow.

DIA board chairman Gene Gargaro Jr. and Oakland County Art Authority chairman Thomas Guastello earlier this month signed an amendment to a county contract outlining rules prohibiting the use of taxpayer funds for bonuses and giving county art authorities veto power on compensation decisions.

The changes come after a public firestorm in October over $90,000 in bonus money paid to top executives in 2013 as the DIA's $23 million regional tax began flowing to the museum.

The museum board paid the bonus money back by adding $90,000 of its own funds into DIA coffers.

After demands from county leaders that bonuses be returned, Gargaro announced the DIA changed its compensation policy in November to state that no further bonuses will be paid to the museum's top executives unless the money is approved by three county art authorities or paid from non-taxpayer funds.

Similar amendments have been proposed in Macomb and Wayne counties, where the DIA has contracts to provide services in exchange for tax dollars generated by the 10-year regional millage. Their approval is expected in coming weeks.

Approved by voters in all three counties in 2012, the millage provides 70 percent of the DIA's budget. Recent estimates place the full value of the regional millage over all 10 years at an estimated $250 million.

Gargaro said after talks last fall with the county executives, county commissions and art authorities in Macomb, Oakland and Wayne, it was important to have the DIA policy changes formalized in writing in the county contracts.

"The idea is that is the framework the DIA will use when deciding on compensation for executives," Gargaro told The News on Friday. "Complete transparency — that is what this is aimed at."

Guastello said language in the amendment helps the county and the art authority to fulfill their fiduciary duty, as collectors of the millage, and gives Oakland County officials the ability to discuss compensation before it's implemented.

"It was a very good agreement. It was a pledge. It was a promise kept," Guastello said. "We have the ability to say what goes on the with public funds when we are the public funds."

Guastello said the authority and Oakland County, which alone will send an estimated $100 million to the DIA through the life of the millage, are also looking to be more proactive with the DIA about the use of taxpayer funds in museum programs.

Under the current arrangement, each county art authority receives a year-end report detailing spending in the previous 12 months. Prior to the millage, the DIA was funded exclusively by private money from foundations, individuals and other sources.

"We are the customer under the service agreement and we expect to have a say and a choice on how this money is implemented," Guastello said.

The 2013 bonuses included $50,000 paid to DIA director Graham Beal, $30,000 paid to chief operating officer Annmarie Erickson and $10,000 to chief financial officer Robert Bowen.