Marjorie Margolies Was Involved In Own Pay Hike Despite Claim Of Recusal, Board Minutes Show

Democratic Candidate Was Involved In Own Pay Hike Despite Claim Of Recusal

Former Rep. Marjorie Margolies, currently running hard for a congressional seat, is defending her role in setting her own pay as the head of a charity by insisting that she recused herself from the actual vote. But a close look at the records of the charity's board meeting suggests she's drawing a very fine line.

At a recent forum attended by all four Democratic candidates running in Pennsylvania's 13th District, Margolies sought to rebut a previous Huffington Post report by saying that she had recused herself from the decision to more than double her own pay at her charity in 2001 and that an application to have the charity lease a mansion in which she would have living quarters was withdrawn.

Margolies was asked about the Women's Campaign International (WCI) pay increase by moderator Dave Davies of WHYY at the Philadelphia forum on April 7.

"No, I recused myself from any votes that had to do with my salary," she said, adding, in response to a follow-up question, that her denial included the 2001 vote reported by HuffPost.

Watch a clip of Margolies' response above.

But minutes from the Dec. 9, 2001, meeting suggest that Margolies, as both chief executive and chairman of the WCl, was much more involved than her answer would indicate.

"The Chairman ... noted that the salaries of certain members of the staff would be increased to a normalized level when the Corporation received certain pending grants," the minutes read. "She also explained that her salary, which is currently $1,000 per week, would increase to $114,000 per year at that time, and the Board voted unanimously to approve that salary at that time."

The chairman who said that was Margolies. The only other board members then were Fredrica Friedman and her husband, Stephen Friedman. At the time, the nonprofit was expecting to win a $600,000 grant from the U.S. Agency for International Development.

HuffPost asked an expert in nonprofit governance about best practices for a charity like the WCI.

"Usually the chief executive is not the head of the board," BoardSource Vice President Vernetta Walker told HuffPost. (She asked to speak in general terms, rather than specifically about the WCI, as she had not done a forensic audit of the charity.) "That's typically not a good practice because there are too many conflicts of interest that can occur because the board is the supervisor of the chief executive."

Walker said that the chairman's recusal from a vote would typically be stated in the minutes.

"The smart thing to do is to make sure it's noted in the minutes contemporaneously," she said, adding that "abstention needs to be noted in the minutes, that's what's required." The WCI minutes do not indicate any recusal.

Walker also said that a married couple serving together on a board "is problematic when there are only three on the board. Once the board grows to when the husband and wife can no longer carry the day on voting, it's less problematic."

Stephen Friedman is not listed as a member of the WCI board after 2001.

In response to HuffPost's story about Margolies' stewardship of the charity, which aims to help put women in leadership roles internationally, Margolies campaign spokesman Ken Smukler said that she had recused herself from the salary vote.

In an email, Smukler wrote that "Marjorie says she explained the compensation to the board ... before the vote ever happened, then recused herself from the vote, then the vote was taken without her, then she rejoined the board." He previously told The Philadelphia Inquirer that the campaign was contemplating a defamation suit against The Huffington Post for its reporting on Margolies.

Margolies also did not deny at the April forum that her charity had proposed that she live on the third floor of the historic Thomas Mansion, which the WCI hoped to lease and renovate.

"It was one of the proposals," Margolies said.

However, the charity's proposal was denied by the Fairmount Park Historic Preservation Trust -- rather than withdrawn due to concerns from neighbors, as Margolies claimed at the forum.

Significant proportions of the WCI's revenues have gone to Margolies and the charity's second-in-command over several years. For instance, Margolies was paid $121,395 in 2005, when the charity spent $461,150 and took in just a bit more than that -- meaning her pay was more than a quarter of all charity expenses.

In the year prior, the charity had $483,337 in revenue. Margolies earned $58,540 in compensation, and $74,411 went toward other salaries and $11,538 to benefits -- which amounts to almost a third of revenue going toward compensation. That year, the charity also leased a vehicle for her.

In 2009, the charity had roughly $700,000 in revenue. For every dollar the charity took in, nearly 30 cents went to pay either Margolies or the executive director, with another 40 cents on the dollar going to other salaries and benefits, leaving less than 30 cents on every dollar going toward the charity's intended recipients.

Margolies is running this year to reclaim the seat she lost in 1994 after serving one term in Congress. Her son Marc Mezvinsky married Chelsea Clinton in 2010. Last week, former President Bill Clinton headlined a Philadelphia fundraiser for Margolies that raised over $200,000 for her campaign.

Physician Val Arkoosh, Pennsylvania state Sen. Daylin Leach and state Rep. Brendan Boyle are also contesting the Democratic primary on May 20. The district is a deeply blue one, so the winner of that primary is expected to sail to victory in November's general election.

The April 7 candidate forum was the first that Margolies had attended. Another was scheduled for Wednesday evening, hosted by Democracy Unplugged. Margolies declined to attend.

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