Susan Koret, the widow of San Francisco-based Koret Foundation founder Joseph Koret, will – with lead attorney Robert Bunzel, and Koret Family members – announce a major lawsuit to re-take one of the region’s most important philanthropic organizations from those who she says have hijacked it for their own self-interests and pet projects.
Ms. Koret says that The Koret Foundation was founded on the principles that it would help the poor and assist Jewish causes in the Bay Area and Israel. Instead, Susan Koret asserts that Foundation money has been diverted by former President Silicon Valley Real Estate Investor Tad Taube, Attorney Richard L. Greene, Other Board Members with conflicts of interest to causes outside the core mission.
Ted Taube stepped down from the board presidency earlier this year, and has set about finding a replacement by the end of the year. “I have a goal, to achieve a 40-hour workweek,” Taube said to the San Francisco Chronicle. “I don’t want to continue working more hours than my age, holding down five, six, seven jobs at once.”
But the truth is Taube has never stepped away from his duties, and is still very much in charge. And now, he’s accused of running the organization in such a way as to insult many prominent African Americans and Asian Americans, as well as run the organization as what she says is “his personal piggy bank.”
Ms. Koret, the widow of Koret Foundation founder Joseph Koret has filed suit against Koret Foundation Board President Tad Taube, accusing him and the Foundation’s Board of Directors of conflicts of interest in funding pet projects that include conservative causes in the United States and charities in his native country of Poland.
The suit filed October 7, 2014 in San Francisco Superior Court by Mrs. Koret alleges that under Taube’s direction the board has ignored the priorities established by her late husband to help the poor and assist Jewish causes in the Bay Area and Israel.
Instead, her suit claims, the Koret board is using foundation funds to promote programs closely affiliated with individual board members and is purposely confusing the public by putting signage that prominently features Taube’s name alongside the Koret Foundation name on buildings and grants for which the Koret Foundation is the principal funder.
“Defendants’ duty of loyalty to the Foundation has been corrupted by these directors’ close affiliations with many of the Foundation’s recent grants, resulting in tens of millions of dollars distributed due to self-interest,” according to the lawsuit.
The suit demands the removal of board members Tad Taube and his longtime legal counsel Richard L. Greene of Greene Radovsky Maloney Share & Hennigh LLP; board member Anita Friedman, director of Jewish Family and Children’s Services; board member Richard Atkinson, former president of the University of California; board member Michael J. Boskin, Senior Fellow at the Hoover Institution; and board member Abraham D. Sofaer, Senior Fellow at the Hoover Institution. The suit calls for their replacement with the appointment of an independent board with a majority of Jewish directors.
“Taube says publicly that giving to the poor is “a bottomless pit.” Instead he has led the Koret Foundation by focusing its giving to organizations identified with him, creating a corporate culture of directors who rubber stamp his decisions as long as their favored organizations are also supported. “In elevating their own and affiliated interests while ostensibly making decisions for the Koret Foundation, defendants are breaching duties of loyalty that require them to serve faithfully the interests of the Koret Foundation” the lawsuit claims.
“Alleviating suffering and misfortune were my husband’s top priorities,” said Mrs. Koret. “Joe and Stephanie’s money shouldn’t be used for Tad Taube’s pet projects in Poland or to help conservative economic and policy think tanks–not when so many in the Bay Area go to bed hungry every night and Jewish causes need support.”
Supporting her lawsuit is Joe and Stephanie Koret’s closest surviving family member, nephew Merv Brown of Walnut Creek, who worked with the Korets for decades. He said about the suit:
“With all respect to Mr. Taube, if he wants to spend money on Poland, he should use his own money–not my uncle’s and my aunt’s–to assist his homeland. I am proud to stand with Susan Koret to support and endorse the directions and wishes of my family that their fortune be spent as Uncle Joe wished: to help the poor and Jews in Israel and the Bay Area.”
Mrs. Koret’s lawsuit also alleges that others, including “philanthropic civic leaders and former and current staff members will support Mrs. Koret in her efforts to restore the Koret Foundation’s purpose and dignity free of the control of Mr. Taube.”
The lawsuit claims that, at Taube’s direction, the Koret Foundation has donated approximately $9 million to the Museum of the History of Polish Jews in Warsaw, a pet project of Taube, who was born in Poland. “While the Polish Museum commemorates significant Jewish history, the diversion of Koret funds to Poland is not in keeping with my husband’s charitable mission…and in effect drains funds that could benefit the needy in communities in the Bay Area and Israel,” the lawsuit states.
Mrs. Koret noted her husband was a native of Odessa, Russia, who immigrated to America, struggled growing up poor in the U.S., and then struck it rich later in life in clothing and real estate. He was deeply committed to humanitarian causes such as alleviating hunger, and would “be deeply angered and offended by Tad Taube and the board’s strong support of conservative causes and grants that divert money needed for the local community and Jewish causes.”
The lawsuit asks the court to prevent the spending down of the Foundation’s assets by Taube and the board members with whom he has surrounded himself and allow the appointment of a new, independent board to carry out its mission and save the Foundation.
Mrs. Koret was named a lifetime director and chairwoman of the Foundation prior to her husband’s death in 1982. She was entrusted by her late husband to carry out the family legacy of caring for the poor and supporting Jewish and community causes through the Koret Foundation, according to the lawsuit.
The lawsuit also recites that the board has rejected a series of Asian and African-American candidates for board membership, including their rejection last month of former Mayor Willie Brown as president of the Foundation.
Mrs. Koret said she has been marginalized as Taube, a Silicon Valley real estate investor, and his hand-picked supporters on the board steer donations toward causes in which they have affiliations.
Mrs. Koret said she filed the suit as a last resort after her efforts to diversify the board, get independent legal advice, confirm the perpetual nature of the Foundation and redirect funds back to her late husband’s mission were rebuffed. She fears the Koret Foundation is facing destruction of its mission and eventual collapse unless changes are made.
She said in the last 12 months, Taube has undertaken three major real estate transactions: the sale of the Foundation’s largest real estate asset; marketing of another Foundation property; and refinancing a significant loan on a third Foundation
Susan Koret will hold a press conference Wednesday morning, October 8th.
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