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Ex-Oakland official raises possible DIA conflict of interest

Mike Martindale
The Detroit News

Correction: This story has been updated to reflect that service agreements allow the Wayne, Oakland and Macomb County art authorities to appoint two members each to the Detroit Institute of Arts board of directors.

Detroit — Days before voters in three counties decide on a renewal levy for the Detroit Institute of Arts, a former Oakland County commissioner is questioning the legality of having someone serve on both the museum's board of directors and the county's arts authority.

“It’s wrong,” said Sue Ann Douglas, who spent 18 years as a county commissioner and 11 years on the Rochester City Council. “We have one person on our county art authority who also has been sitting on the DIA board for seven years.

“That’s like sitting on opposite sides of the table,” Douglas contends.”If you are on the county authority, you are supposed to be monitoring the taxes and their use after (they're) sent on to the DIA. If you are on the board, you have a different mission.”

The Detroit Institute of Arts.

Douglas pointed to Thomas Guastello, a Bloomfield Hills attorney and businessman who sits on both the Oakland County arts authority and DIA boards.

Guastello, who was a Democratic state lawmaker for 14 years, said he doesn’t understand the problem with serving in two volunteer, unpaid roles.

“I believe I am working on behalf of the taxpayers to make sure they get everything they can for their tax dollar,” he said. “I’m appointed on the authority and elected onto the board. This has been working pretty well for eight years and no one has questioned it until now. Could there be some political motive involved?”

A renewal of a 0.2-mill levy to support the DIA is on Tuesday's ballot in Oakland, Macomb and Wayne counties. The millage, initially approved in 2012, accounts for more than $25 million — about 67% of the DIA’s total revenue, according to recent court documents.

The millage was initiated eight years ago as a one-time, 10-year tax but museum officials mounted a campaign to have a renewal placed on the presidential primary ballot, two years before it is set to expire.

If approved, the renewal will draw about $13.6 million from Oakland County taxpayers annually, $5.8 million from Macomb County residents and $8.5 million from Wayne County taxpayers.

The DIA tax became controversial after it was followed by large pay raises and bonuses for DIA executives. At least two lawsuits have been filed in recent weeks by residents in Oakland and Wayne counties seeking access to more financial information from the DIA board.

A spokesperson at the DIA could not be immediately reached for comment Friday.

Under the service agreements, every county authority can appoint two people for the DIA board, which ultimately decides the mission, including spending, of the art institute. The law does not prohibit the county authorities from naming their own members to the DIA board.

Guastello said that as a member of the five-person county arts authority, he has voted to place himself on the DIA board.

But oddly, the authority’s own 2013 articles of incorporation seem to bar holding two seats.

They state, in part, that for the authority’s board: “… Each voting member shall be a resident of Oakland County, Michigan and may not be an employee, director, officer, or elected or appointed official of the city of Detroit, the Detroit Institute of Arts, or of any city, village, township, county or state government…” It also states “The Authority shall not participate in the governance of an art institution.”

In a separate agreement for “Engagement of the DIA for Art Institution Services, it says the authority “shall have the right to appoint two voting members to serve on the DIA’s Board of Directors.”

The Oakland County Board of Commissioners names three of the county’s five authority members and the county executive picks the other two. Dave Woodward, chair of the Board of Commissioners, said he has never been confronted with a possible conflict of interest but agreed the conflicting language bears additional investigation.

“I will ask for a legal opinion from our attorney,” Woodward, D-Royal Oak, said Friday. “I don’t think it is inappropriate or improper but if it is, then we will correct it.”

Woodward said having an authority member on the larger, 49-member DIA board makes good sense “to keep an eye on how our money is spent.”

“I’m very comfortable with Oakland County having a seat at their (DIA) table,” Woodward said. “I would argue that we want to keep it.”

Commissioner Robert Hoffman, R-Highland, has several concerns about the DIA — and his fellow commissioners.

Hoffman was rebuffed recently when the DIA rejected a Freedom of Information request he had filed for data about the museum's expenditures, policies and procedures.

“I was told as a private nonprofit, they weren’t subject to the FOIA or the Open Meetings Act,” said Hoffman.

Hoffman sought support from his fellow commissioners this past week to obtain a legal opinion on whether the DIA should have to comply with information requests. Hoffman found no support from other commissioners, and his resolution lost in a voice vote.

mmartindale@detroitnews.com

(248) 338-0319