Bugging the San Antonio Symphony

In March 2000, a hundred guests gathered for a birthday party at the expansive Tobin estate in San Antonio, Texas. The honoree, colorful sixty-six-year-old philanthropist Robert L. B. Tobin, was battling cancer. Tobin was too ill to attend a traditional party, so guests were shuttled through the property one-by-one to speak with the bedridden benefactor. He passed away on April 26th. (x)

A few years later, the Boston Globe began publishing a series of articles entitled Charity Begins at Home, investigating abuses by officers of charitable organizations. On 17 December 2003, an article appeared in the Globe, squarely taking aim at the management of the Tobin estate: “Trustees’ fees are talk of San Antonio’s elite.” (x)

Two lawyers were in charge of dealing with Tobin’s assets. One was Leroy G. Denman, Jr., who passed away in 2015 at the age of 97 (x). The other was a man named J. Bruce Bugg, Jr.

Bugg was charged in the will with selling assets and endowing what ultimately became the Tobin Endowment. Both Bugg and Denman were paid handsomely for their work. “Last year,” the Globe wrote, “Bugg, who manages the foundation’s assets, and Denman took fees of $295,580 each for awarding $1.67 million in grants.” Both men (who, it should be noted, had other business interests in addition to their Tobin-related responsibilities) claimed that they spent forty hours a week apiece managing the endowment, and said they were entitled to the money.

The Globe also revealed that on 9 March 2000, the same month of his last birthday party, a deathly ill Tobin signed a document granting Bugg “a 4 percent commission on the sale of all the other assets of the estate, with the exception of marketable securities” as well as “authoriz[ing] an immediate $50,000 bonus for Bugg.” On top of that, a deeply disturbing accusation was made by a Tobin family member:

Last week Ann Tobin Maessen, the daughter of a first cousin of Tobin, said she is convinced Tobin was not competent to make decisions about estate fees in the last months of his life.

“They presented these papers to Robert to sign when he was very ill and very depressed,” Maessen said. “If he was in his right mind, he never would have signed them.” She now says the two attorneys are using the assets “to enhance their own social and personal standing in San Antonio.”

Denman and Bugg deemed Maessen’s accusations “uninformed, completely without truth, and despicable to imply.”

In March of 2004, the San Antonio Current followed up on the Globe‘s reporting by reporting that on February 17th of that year, Denman and Bugg “filed a list of Texas assets for the estate totaling $38.7 million.”

A few choice quotes from the article about the resulting Tobin Endowment:

Private charitable foundations are required by federal tax law to spend at least 5 percent of their assets on an annual basis…

In its first three years of operations, the Tobin Endowment reported total expenses and disbursements representing between 3 and 6 percent of its total assets…

Trustee salaries comprise about half of the Endowment’s total operating and administrative expenses.

*

J. Bruce Bugg, however, didn’t stop making non-profit news there.

When the $205 million Tobin Center for the Performing Arts was opened in San Antonio in 2014, Bugg was that organization’s founding chairman. (x)

Bugg also was a donor to the San Antonio Symphony. He and other major donors believed that after years of financial instability (including periods where the symphony struggled to make payroll), it was time for a fresh start, and they believed they were the ones for the job. So in the summer of 2017, they created a brand new organization called Symphonic Music for San Antonio (SMSA). Bugg was named board chair. (x)

SMSA was actually intended to succeed the Symphony Society of San Antonio (SSSA), which had historically served as the orchestra’s management. The older organization actually stepped aside in favor of the new one, and even revealed plans to dissolve. Judging solely by press reports, they appeared to be working together to make the transition as smooth as possible.

On September 1st, at the start of the orchestra’s fiscal year, SMSA took over the symphony, and even negotiated a four month collective bargaining agreement with the musicians. Its expiration date was December 31st.

Then, on December 28th, catastrophe: the SMSA, in a surprise move, withdrew from the deal:

Symphonic Music for San Antonio Chairman Bruce Bugg Jr. said the musicians’ union — the American Federation of Musicians — told him of an underfunded pension obligation of more than $4 million. Now, the management group has decided to hand back responsibility to the Symphony Society of San Antonio, which managed the symphony since its creation in 1939. x

However, as SSSA board chair Alice Viroslav pointed out in the same article:

“So everyone in the pension is underfunded,” she said. “The pension is a huge multi-employer plan. And the pension itself has lost over 40 percent in overall value in the stock market in 2008 and never fully recovered from that.

“And there’s actually an active lawsuit right now against the pension itself by some AFM musicians because exactly the issues that we’re talking about. So this has nothing to do with anything that we did. This has to do with the overall management of the pension fund.”

The musicians agreed on this particular point, saying in their own press release:

SSSA has $0.00 (zero) debt to the AFM-EPF. The Symphony’s auditors and SSSA board were 100% correct in reporting no debts payable to the Pension Fund for withdrawal liability…

Neither SMSA nor SSSA has ever proposed to the Union that the Symphony withdraw from the pension plan. x

The confusion as to the real story behind the SMSA withdrawal persists even now.

In any case, with the SMSA apparently out of the picture, last night, during a five and a half hour long meeting between the SSSA and the musicians’ union, the SSSA board suspended the rest of the 2017-18 season.

11PM edit: Someone was kind enough to point out that the musicians’ union was not present (although representatives may have been). The marathon board meeting was of the SSSA board and was not a negotiating session. – E

The late night press release from Alice Viroslav announcing this catastrophe was bizarre and opaque:

“To be clear, this is not the end of the symphony,” her statement said. “As we observe San Antonio’s Tricentennial, it is the perfect time to recognize and celebrate the role that the fine arts have played in shaping our city, and to begin a true collaborative effort to firmly establish the symphony as the cornerstone of the arts in our community. It is our fervent belief that our city deserves nothing less than a world-class symphony.” x

It’s not clear if she’s talking about instigating an emergency fundraising effort, proposing some kind of savior role for Bugg, and/or (*swallows hard*) founding a non-union orchestra.

This is obviously a quickly developing crisis with lots of moving parts to it, and hopefully people on the ground will be able to unravel the full story.

But I figured that I, in frozen Minnesota, could at least contribute something by doing what anyone with an Internet connection can: logging onto Guidestar.org to study some 990s and report on anything odd.

The Tobin Endowment’s 990 is odd.

First impressions…

The value of the Endowment has grown substantially over the last decade and a half. In 2004, Tobin’s estate was valued at $38.7 million. In 2015, the fair market value of all Endowment assets was $74.8 million. (Remember, this doesn’t take into account recent market gains, either.)

In 2015, the Tobin Endowment gave gifts to a variety of organizations whose causes were near and dear to Robert Tobin’s heart. For our purposes, let’s take special note that the San Antonio Symphony received $94,036. But other organizations received disbursements, too:

• $150,000 to Opera San Antonio
• $115,260 to to the McNay Art Museum
• $73,000 to the Phil Hardberger Park Conservancy
• $50,000 to Ballet San Antonio
• And more.

The biggest recipient was the Bexar County Performing Arts Center, a.k.a. the Tobin Center for the Performing Arts. In 2015, the Endowment paid $1,025,000 for the capital campaign and naming rights to the building.

In all, in 2015, the Endowment disbursed $1,763,808.

Here’s the figure I found most interesting, though…

For his services as trustee managing and doling out the Endowment’s money, Bugg was paid…$485,372. Nearly half a million dollars. In one year. That’s a full 15% of the Endowment’s 2015 expenses and disbursements.

Also, the form says that he worked on the Endowment for forty hours a week, despite his other professional and philanthropic commitments. That doesn’t pass the smell test any more now than it did in 2003, when the Boston Globe raised its eyebrow over the same question.

The Globe had reported in 2003 that Bugg was paid $295,580. But obviously with the increase of value of the endowment, his trustee fee increased, too.

Another odd thing:

In 2015, the Endowment employed two people. One is an executive assistant who works 40 hours a week and received $96,502 in compensation, and the other is a maintenance manager who works 40 hours a week and received $52,908. There’s no CFO, no executive director, no development director, nothing.

That leads one to wonder: who is making the decisions about how much money goes to what non-profit organization? Is it Bugg, since he is trustee? Is Bugg trained or qualified to do that?

In 2005, the San Antonio Current claimed that organizations that applied for grants sometimes had to wait a year to hear back from the Endowment. Is that still happening? Look at the Endowment’s website. It contains a biography of Tobin, Bugg, and a “contact us” form if you’re interested in applying for a grant yourself.

As a more general question, is there perhaps a conflict of interest here, since Bugg is, over time, paid more the less the Endowment disburses to various arts organizations?

Also, for what it’s worth, the FEC’s website reveals that Bugg has donated thousands of dollars over the years to candidates who aren’t exactly sympathetic to labor: folks like David Dewhurst, James Talent, William Hurd, Rick Santorum, and Scott Brown. What kind of a role might politics and antipathy to unions be playing here?

I don’t claim to have any answers. I just wanted to raise questions to help guide the people smarter than I am who are looking for a solution. I also have no idea what lies ahead for the San Antonio Symphony. All I can say is that I pray for a Minnesota-style miracle. They’ve been known to happen.

But on this dark day, as Texas patrons and donors decide what comes next (x), it might be worthwhile to look at the rewards – and more importantly, the risks – of tying any orchestra’s fortunes to J. Bruce Bugg, Jr.