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Buffalo ReUse: Passion, Vision…Protocol

Oishei Foundation President Robert Gioia issued a statement today about the firing of Michael Gainer as COO of Buffalo ReUse.  While
the statement makes no specific allegations about Gainer’s mismanagement at
Buffalo ReUse, it does point to organizational, financial and legal issues in
general.  

“I’m
not at liberty to get into the middle of this,” Gioia said, “but we
feel we see a stream of misinformation. We [the Oishei Foundation] embraced
[ReUse] and watched them closely.”  Then, answering to talk on local
online news entities such as BR, along with local blogs, Gioia added,
“Frankly, the intent of the membership to derail the board of directors
would mean we’d have to reassess our relationship with ReUse. Tempers and egos
need to be checked, and we need to do what’s best for the organization with the
current board. 

Gioia added,
“I still have the utmost respect for Michael.” 

In talking
to Gioia and to ReUse Board of Directors Chairperson Stephanie Simeon, it
appears that it was in fact organizational issues, which led to financial
issues, that then could have put the not-for-profit in legal trouble. Though
neither Reuse interim Executive Director Harvey Garrett nor Gioia and Simeon
will say specifically what the financial amounts of the gaffs were, Gainer
himself has admitted to “mistakes.”  According to Gainer, most
of these would involve taking private loans to make payroll.

Since
reporting on his firing last week, Gainer has stopped working for ReUse on a
volunteer basis, something that he continued to do all of last week.

The Oishei
statement is as follows:

The
Oishei Foundation made an initial operating grant to Buffalo ReUse of $200,000
about two years ago. For about the past 10 months, on learning of a
number of issues, the Oishei Foundation has been actively working on and
financing a reorganization of the structure and operations of Buffalo ReUse.
All of these organizational issues arose subsequent to the grant being made.

In
addition to many hours of staff time of the vice president and the senior
program officer, the Foundation has underwritten the costs, which now exceed
$15,000, of addressing serious legal and financial compliance issues with the
services of CCS-NYS (now known as New York Council on Nonprofits). In addition
to the organizational and board training work that NYCON did, the
Foundation separately hired their executive director, Doug Sauer, to provide
executive coaching and mentoring to Michael Gainer.

Because
of the seriousness of the issues involved, and the toxic stalemate that had
developed between staff leadership and the board at that time, the Foundation
requested that the board of Buffalo ReUse bring in an outside administrator on
an interim basis to oversee the implementation of the legal and financial
corrections that were required, and to establish new controls and systems for
the organization going forward. Harvey Garrett was brought in as that interim
administrator, and Stephanie Simeon was elected president of the board.

Since
Stephanie and Harvey have begun working on BRU’s issues, a great deal has been
accomplished. While still not in complete financial compliance, the majority of
the financial issues have been resolved. New controls have been put into place
regarding expenditures and reporting. The remaining issues should be resolved
shortly. The legal issues having to do with the incorporation and early
activities of BRU have been resolved. Several new board members were recruited
from an open call and formal interview process (in which the Foundation had no
role at all), including three that had been recommended by BRU staff.
Indications were that BRU was stabilizing, and that it would emerge from its
crisis intact and in position to move forward rapidly.

It
was because of this concrete improvement that the Foundation agreed to release
a $50,000 payment of grant funds to BRU. It was also the basis on which
BRU was recommended by the Foundation to the owner of a building
as an ideal candidate to receive the potential donation of the building.
After several conversations between the parties, it was decided to go
forward in the due diligence process. The Oishei Foundation has offered to pay
for legal counsel through the initial phases, which is currently estimated to
be about $10 – 12,000 over the next few months.

We recently
were informed by the chairperson of the board of new, previously
unrevealed and serious developments dating back more than several
months. Our understanding is that action on these developments is
being undertaken by the board. We are now aware of the contemplated
action by some of the members of BRU to remove the board, reinstate Michael
Gainer as the executive director, and presumably have staff and members
select a new board. 

In
our view, such action would seriously set back the possibilities for BRU to
move forward, and negate all the work and effort that has taken place to
rectify what was, by all public accounts, a very badly managed organization
under the previous leadership. We have provided extraordinary support to
Michael Gainer via BRU and in other ways, and we believe he may still have
a role to play at BRU. However, should such action by a subset of members
take place and successfully reinstate Mr. Gainer as the CEO, the Oishei
Foundation would seriously reevaluate our current and any future
relationship with BRU.

We
firmly believe BRU is now poised to become a truly great non-profit
serving a need and a population desperately needing to be served in Buffalo. We
believe that the current chairperson and the nominated (and currently serving)
board members — which, again, the Foundation had no role in recruiting or
selecting — are well-chosen and capable. Finally, we believe that this
leadership team, particularly Ms. Simeon and Mr. Garrett in his interim
role, has clearly demonstrated extraordinary competence operating
under tremendous pressure. They have our complete support.

Gioia
is clearly bothered by the attention and response Gainer’s firing has caused.
 He said he felt reluctance about the firing of Gainer and was
uncomfortable with the need to issue this statement, not to mention the burden
on his staff at Oishei. “Paul Hogan and Blythe Merrill have spent an
inordinate amount of time on this,” Gioia said. “We think the
action taken was appropriate.”

Gioia
also points out the fact that ReUse is poised to inherit a building.
 “They’re now on the verge of having something as substantial as a
building given to them,” he stated. “We could have easily thrown the
towel in, but we clearly feel the organization is headed in the right
direction.  A revolt against the board now would be in the wrong
interest.”

Simeon,
who has been on the board since last October said the board had a lot of
assessing to do when it came to strengths and weaknesses in the organization.
 She recognizes Gainer for the passionate visionary he is, and says that
Garrett is a “brilliant fiduciary mind. A financial czar.”

Though
she would like to see Gainer stay on in some role, she says that would not
involve being paid senior management. Simeon says the goal of the board on the
business end is simply long term stability of the organization.

Membership
Spokesman Christopher Smith says that a special meeting of the membership has
been called for September 3rd at ReUse headquarters.  Smith added that the
membership has made it their practice to answer, but not issue, statements in
the past week.

The
membership’s official statement is as follows:  

“Pursuant
to the bylaws, the membership of Buffalo ReUse has called a special meeting to
review the strategic vision of the organization and to ensure that the Board of
Directors are acting in accordance with the founding principles and
vision.  We would prefer that these discussions and this review to occur
in private and not in the press.”

Michael
Gainer was not available for comment at the time of this posting.

Image:
Buffalo ReUse

 

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