Feed The Children Paid Founder $800K

May 30, 2013       Mark Hrywna      

Feed The Children (FTC) has paid its estranged founder $800,000 as part of a legal settlement reached in January 2011.

The settlement was for an undisclosed sum and paid last year, but appears on the latest tax filing for the Oklahoma City, Okla.-based charity’s fiscal year ending in June 2012. The $800,000 payment to Larry Jones was reported as “other compensation” and described in the tax information form as a severance payment. The Internal Revenue Service (IRS) Form 990 was signed May 13 and posted on the charity’s website.

Jones founded Feed The Children in 1979. The board terminated him in August 2009 following a power struggle for control of the organization. Jones filed a wrongful termination suit in November 2009 seeking lost income and injury to his reputation. The organization counter-sued. He was voted off the board in March 2010.

The charity was not able to comment beyond the information in its Form 990, according to Erin Engelke, FTC’s vice president of communications and public relations.

Legal expenses spiked for the charity in 2010, with a line item of almost $7 million. They leveled off at approximately $6 million in each of the past two years, but still higher than the $533,672 reported in 2009. The past several years have seen multiple law firms reported as the highest compensated independent contractors but none appear in the latest tax filing.

The Oklahoma Attorney General’s Office closed its investigation into the charity in December 2011 once officials were confident of changes to personnel and governance polices, said Julie Bays, chief of the public protection unit, which oversee charities in the state. “We agreed to shut down the official investigation but they’ve constantly kept us updated, at least every three months,” she said.

The AG’s office still has an active criminal investigation of Larry Jones but it does not involve FTC and current personnel, Bays said. There probably will be an official decision one way or another from Attorney General Scott Pruitt by July, she said. At the beginning of 2012, Bays handed over the investigation to criminal investigators who have had to start most of the investigation over since her office was involved in the civil matter.

A representative for Jones did not return telephone calls seeking comment.

Feed The Children selected Kevin Hagan in April 2012 to be its new president and CEO. Total revenue last year for the Oklahoma City, Okla.-based charity was some $617 million for the fiscal year ending June 2012, up from $436 million the previous year.

In his final year as president, Jones earned total compensation of $259,002 in the Fiscal Year ending June 2010. Compensation for Hagan, who was hired in April 2012, did not appear on the organization’s latest tax form, which covered the fiscal year from May 2011 to June 2012.