For Immediate Release - July 09, 2009

Attorney General Coakley's Office Completes Conflict of Interest Review of Suffolk University

Lack of ongoing reviews and approvals identified, corrective steps agreed upon

BOSTON - Attorney General Martha Coakley's Office has completed a review of certain related party transactions involving Suffolk University and two firms that provided the University with strategic services since 1997, and has determined that no further action by the Attorney General's Office is warranted at this time.

"Our office has determined that the university did not periodically review and evaluate certain related party transactions in a manner fully consistent with its own policies and procedures governing conflicts of interest or best governance practices," said Attorney General Coakley. "To assure that a related party transaction is in the organization's best interests, periodic disclosure must be coupled with a thorough and ongoing examination, review and approval of these sensitive arrangements."

The Attorney General's Office, through its Non-Profit Organizations/Public Charities Division, is responsible for overseeing the public's interest in the Commonwealth's non-profit charitable organizations. In its review of the university, the Attorney General's Office examined arrangements with The Commonwealth Group and later WolfBlock Public Strategies, LLC. Suffolk University Trustee Robert Crowe was principal of both organizations during the period each provided services to the University. While the related party transaction was first disclosed and approved by the board in 1997, and while Trustee Robert Crowe periodically submitted written disclosures of his financial interests in the transactions, there is no evidence of any subsequent evaluation of the transactions.

"As we have noted on many occasions, related party transactions are not intrinsically inappropriate," said Attorney General Coakley. "However, to assure that the best interests of the organization are always placed first, boards must continually review whether these transactions are in the best interests of the charity."

Suffolk has cooperated fully in this review, acknowledged areas requiring improvement, undertaken a review of all disclosure statements and initiated a re-examination of its conflict of interest procedures.

The Attorney General's review of these matters was limited to a legal assessment of whether the evidence establishes a violation of the Commonwealth's public charities laws. The Attorney General does not express in the review any opinion on the business judgments of the Board of Trustees for Suffolk University. The inquiry did not include an evaluation of whether the transactions were, or were not, in the best interests of the university, nor did the inquiry include a review of the underlying contracts.

The Attorney General's Guide for Board Members of Charitable Organizations pdf format of AG's Guide for Board Members of Charitable...
offers guidance for board members on conflict of interest issues.

The letter from the Attorney General's Office to the Suffolk University Board of Directors can be viewed here: Letter to Trustees (PDF) pdf format of 2009_07_09_suffolk_letter.pdf

This matter was handled by Assistant Attorney General David Spackman, Chief of Attorney General Coakley's Non-Profit Organizations/Public Charities Division, and Jonathan Green, Assistant Attorney General in the Non-Profit Organizations/Public Charities Division.