By Donald V. Watkins ©Copyrighted and Published on June 17, 2018
Every 501(c)(3) non-profit organization has a board of directors that is responsible for overseeing the fiscal affairs and operational activities of the charity. The Greater Birmingham Humane Society (“GBHS”) is no exception.
Proper oversight has been lacking at GBHS since Allison Black Cornelius took over as interim CEO in September 2014. As a result, GBHS has become a killing ground for healthy animals in need. This lack of board oversight has also created a breeding ground for Ms. Cornelius’ many conflicts of interest and abuse of employees.
Ms. Cornelius has been known to rant and rave through the halls of GBHS’s Snow Drive headquarters, bare-footed, using the F word, and other inappropriate language in the presence of volunteers and foster care providers. When employees complained about this unprofessional conduct, nothing was done to correct it.
Ms. Cornelius routinely subjected employees to “gaslighting” in order to silence their voices and allay their growing concerns about the inhumane treatment of the animals in GBHS’s care. She is notorious for threatening and bullying employees. Those who complained were fired and denied unemployment compensation. She also bad-mouthed them after they were gone. Remaining staff members were strongly discouraged from associating with staffers who left voluntarily or who were fired.
A handful of senior management employees received huge salary increases at the beginning of 2016 when GBHS was struggling to pay its vendor bills.
What is worse, Ms. Cornelius had a terrible habit of using GBHS staff members, resources, and equipment for Blackfish’s business and her personal needs.
The Board Gave Cornelius Free Reign Over GBHS Operations
GBHS’s IRS Form 990 describes the board of director’s oversight role for the organization and its senior management personnel (e.g., chief executive officer, chief financial offer, etc.).
In 2015, GBHS ended the year in the red because its expenses exceeded revenues by $309,790. GBHS’s IRS Form 990 for 2015 listed seventeen board members, led by Chairman David Young. Twelve of these board members spent one hour per week overseeing a $12.4 million non-profit enterprise. The board’s five officers, including Chairman Young, spent two hours per week in their oversight role.
The Form 990 for 2016 listed 30 directors, four of whom were board officers. Twenty-five of the directors said they spent one hour per week on their oversight role. The four officers on the board claimed they spent five hours per week in this role. Only one board member – Charles K. McPherson, Sr. – claimed he spent 10 hours per week in his board member oversight role.
According to the organization’s Form 990 for 2015, Ms. Cornelius spent 40 hours per week on her job. GBHS’s Chief Financial Officer, Mary Anne Levet, spent 40 hours per week in her job.
With respect to conflicts of interests, GBHS reported on its 2015 and 2016 Form 990s that: (a) the organization had a written conflict of interest policy; (b) officers, directors, and key employees were required to “disclose annually interests that could give rise to conflicts”; (c) GBHS regularly and consistently monitored and enforced compliance with the policy. The first two representations were accurate. Based upon the numerous examples of conflicts of interest presented in this article, the third representation was not accurate.
GBHS also reported to the IRS that it had a written whistleblower policy. This representation was true on paper only. In practice, employees and other interested parties who reported GBHS-related misconduct to Ms. Cornelius were subjected to horrendous abuse. In one case, this abused was actually set in motion when Ms. Cornelius sent to local attorney/GBHS “partner” Angie Ingram an email on February 8, 2015 suggesting that Ingram “sue the daylights out of this woman”, who happened to be a whistleblower named Heather Halldin. Rather than embracing Halldin and promising to investigate the financial improprieties raised in her “whistleblower” email, Ms. Halldin and her six fellow whistleblowers were subjected to three years of litigation waged by GBHS board member Lisa Thompson (and five co-plaintiffs) in a self-styled “defamation” case that seeks monetary damages for Ms. Thompson and her friends.
Ms. Cornelius filed an affidavit in support of Ms. Thompson’s quest for monetary damages. Yet, this litigation support is not listed anywhere in GBHS’s Form 990 for 2014 or 2015 even though Ms. Cornelius’ July 10, 2015 affidavit is filled with references to GBHS and its board approved resources for a “rescue” of Cavalier dogs at a Wheaton, Missouri auction in November 2014 and the subsequent “insider” transactions that permanently placed the highest priced Cavaliers with GBHS’s “rescue” partners.
Unlike the properly reported “Interested Persons” transactions for GBHS board members Lucy Thompson Marsh and Andy Prewitt, none of Ms. Cornelius’ “Interested Persons” transactions appear on GBHS’s Form 990 for 2014, 2015, or 2016. We had to dig those transactions out from under the cloak of secrecy that surrounds them.
We should note that Ms. Cornelius has refused our repeated requests for an interview.
Does Cornelius’ Commingling of Personal and GBHS Money and Resources Create Inherent Conflicts of Interest?
On January 27, 2015, Allison Black Cornelius became GBHS’s permanent CEO. The Board understood at the time that Ms. Cornelius would need to wind down her private Blackfish consulting business to fulfill this role. It afforded Ms. Cornelius adequate time to do so. The board expected that Ms. Cornelius would devote her full time and energy to managing GBHS’s challenging financial and operational affairs. GBHS reported on its Form 990 for 2016 that Ms. Cornelius worked 60 hours per week.
Since January 2015, Ms. Cornelius has engaged in the following activities with the tacit or express GBHS board approval:
1. Ms. Cornelius repeatedly used GBHS resources to run her Blackfish consulting business. Rather than winding down her Blackfish business activities, Ms. Cornelius appears to be ramping them up. On March 27, 2017, Ms. Cornelius incorporated a spinoff of Blackfish called “Blackfish Strategies, LLC”. Just last month, Ms. Cornelius took a break from her fulltime GBHS job to lead a “Standards for Excellence” graduate class for non-profit leaders under the banner of Blackfish Consulting for the Richland County Foundation’s Osborne Meese Academy in Mansfield, Ohio.
2. Ms. Cornelius used Courtney Underwood, GBHS’s Director of Marketing and Outreach, to oversee her Blackfish business activities during GBHS working hours. Ms. Underwood’s duties included Blackfish billings, managing calendars, copying materials, and preparing for Blackfish conferences and seminars. At least one other highly paid GBHS management employee used her valuable time and GBHS’s copiers to reproduce commercial-scale volumes of Blackfish handout materials on more than one occasion.
3. At the beginning of 2016, GBHS was struggling to pay its regular bills on a timely basis. It finished 2015 in the red. Vendor accounts were delinquent and vendors were refusing to ship orders. Yet, Ms. Cornelius, with the approval of the board of directors, received a salary increase from $96,600 in 2015 to $125,000 in 2016. In addition to her salary increase, Ms. Cornelius received approximately $16,500 in net bonus income. Upon the recommendation of Ms. Cornelius, Ms. Ramona Graffeo, GBHS’s Human Resources Officer, saw her salary raised from $55,000 to $85,000. Ms. Mary Anne Levet, GBHS’s CFO received an increase in compensation from $63,750 to $85,000. Ivana Sullivan, GBHS’s Director of Shelter Operations, saw her salary increased from $50,000 to $60,000.
4. While GBHS was paying Ms. Cornelius salary and bonus money, she was traveling on behalf of Blackfish to give lectures and seminars on non-profit leadership and avoiding conflicts of interest. GBHS Chairman Art Edge claimed in a June 1, 2018 interview that Ms. Cornelius donated her speaker fees to GBHS. Unlike the “ Business Transactions Involving Interested Persons” listings for board members Lucy Thompson Marsh and Andy Prewitt, no such cash donations, loans, or in-kind contributions appear for Ms. Cornelius on GBHS’s Form 990 for 2015 and 2016.
5. Ms. Cornelius regularly used Courtney Underwood and other staffers as valets to run personal errands (e.g., going to the dry cleaners, picking up medicines from pharmacies, etc.) during GBHS working hours. Ms. Underwood reportedly helped Ms. Cornelius’ son pack for college and move to Tuscaloosa for his studies at the University of Alabama in 2015. She reportedly used GBHS’s large van with a GBHS logo to facilitate this move.
6. Ms. Cornelius used this large GBHS van to move some of her personal belongings from her house that was sold, to her lake house on Smith Lake. Another employee said Ms. Cornelius and her husband used this truck to haul gravel on a personal project.
7. Ms. Cornelius insisted that one GBHS staffer drive or ride with her to a Blackfish conference in Kentucky or Indiana. This was an overnight trip and Ms. Cornelius did not want to go alone. The staffer was upset and did not want to go. This was an exempt staffer who was paid for at least 8-16 hours for this trip.
8. After Ms. Cornelius fired staffers who served as her personal valets, she told people that she would ruin them if they ever talked negatively about her or their GBHS experiences.
9. Ms. Cornelius freely commingled GBHS financial transactions with her personal transactions. She made numerous personal purchases using her GBHS business credit card. Some of these expenses were eventually reimbursed. Interestingly, Birmingham-Jefferson County Transit Authority executive director Barbara Murdock reportedly used her company credit card for personal transactions in 2016 and was terminated last month even though she reimbursed one of these expenditures.
10. GBHS reportedly paid for moving Blackfish items when ABC closed her business office. Courtney Underwood worked for days on GBHS’s payroll as she prepared the Blackfish office for closure. All of these items were brought and stored at GBHS. Most of these items were not used by GBHS. As such, they were not treated as in-kind donations. Rather, GBHS provided free storage space for Blackfish furnishings and personal property.
11. Ms. Cornelius reportedly used GBHS’s veterinary clinic for free vet visits, flea and heartworm preventative treatments for all her dogs. She would have staff bathe and groom her dogs. Ms. Cornelius got collars, leashes, and dog toys from GBHS’s gift shop without paying for these items.
12. GBHS reportedly bought Ms. Underwood a laptop to use, but it was also used for Ms. Cornelius’ Blackfish business on Underwood’s GBHS and personal time.
13. Ms. Cornelius allowed Angie Ingram’s “for-profit” Alabama Puppy Mill Project to use GBHS’s Snow Drive address for business purposes. The phone number listed on the Puppy Mill website was registered to Blackfish. It is the same number Ms. Cornelius uses for GBHS business. After I began publishing my investigative articles on GBHS and Cavalier Rescue of Alabama, the listed address and phone number were removed from the Alabama Puppy Mill Project’s website.
Questionable Financial Practices?
Barfield, Murphy, Shank, and Smith, LLC, is a Birmingham, Alabama CPA firm. It prepared GBHS’s 2016 Financial Statements (on September 26, 2017) and its 2017 Financial Statements (on April 2, 2018). Both financial statements contain the following disclaimer:
“Management is responsible for the preparation and fair presentation of these financial statements…. ; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.”
The Barfield firm’s CPA role was limited to “expressing an opinion on these statements based on our audit.” With that in mind, we have learned that GBHS engaged in the following questionable financial practices:
1. Jazz Cat Ball (“JCB”) is GBHS’s largest fundraiser and costs thousands of dollars to host. All items purchased for the JCB had a general ledger account to be charged. After the event, when reports showed the JCB did not meet its expected financial goals, Ms. Cornelius directed that JCB expenses be spread among the different cost centers or departments to improve the revenue look on GBHS’s books.
2. After each GBHS cost center submitted its budget for the fiscal year ending on September 30, 2017 based on their best knowledge, and based on actual historical data, Ms. Cornelius ordered these numbers changed to show inflated projected income.
3. BP Deepwater Horizon Settlement: Ms. Cornelius directed that GBHS file a claim for BP Deepwater Horizon Settlement money. The CFO advised ABC against this, but Ms. Cornelius ordered it to be done. GBHS, whose Form 990 for 2016 describes no discernible business activities in the affected oil spill areas, received $182,975 in BP settlement money. This money is listed on page 10 of the Form 990 as “miscellaneous revenue” that is “Related or exempt function revenue”.
While GBHS was killing healthy dogs, cats and other animals because of “overcrowding”, Ms. Cornelius was directing her staff to purchase three large-screen TVs for the lobby of the Snow Drive headquarters, where one would do just fine. The TVs cost $800-900 each, plus $400 each to mount.
Ms. Cornelius also sent six people on business trips to Las Vegas and New Orleans for conferences. Additionally, she spent $12,000 for marketing software.
Ms. Cornelius used $1,000 in GBHS donor money to buy a Birmingham K9 Kevlar vest and night vision goggles. She then donated this equipment to the Birmingham Police Department’s K9 Unit as part of a concerted effort to solicit the Unit's support when GBHS pitched its new one campus “gifting” idea to the City of Birmingham (which owned the proposed 27-acre campus site). This inducement did not work, as a portion of the site was later sold to another entity.
Ms. Cornelius gave Kailyn Harris, a GBHS adoption counselor, a black Ford SUV owned by GBHS to drive for business and personal use. GBHS paid all insurance, gas, and maintenance for the vehicle for more than two years. Reportedly, Ms. Cornelius took this action against the advice of GBHS’s CFO. Ms. Harris was eventually fired in 2017, but was allowed to keep the SUV after her termination.
The Board Supports Ms. Cornelius
In 2017, GBHS's board of directors issued a formal statement announcing that it had "investigated claims that Allison Black Cornelius improperly directing society funds for her personal use, disposing of new and useable donated goods, and providing extraordinary raises for herself and other top executives." The board said its investigation found no evidence supporting these claims.
The statement proclaimed that "the Board of Directors continues its full and unequivocal support of Allison Black Cornelius and the staff of the GBHS, and will continue to uphold its duty to the stakeholders of the GBHS by performing its oversight responsibilities with diligence and care."
The board's 2017 statement made no reference to the plethora of internal and external documents relied upon in our investigation. These documents tell a very different story and rightfully call into question the board's exercise its oversight responsibility.
Stay tuned for the finale in this incredible story of documented waste, abuse, and mismanagement at GBHS.
PHOTO: The reception area at GBHS's Snow Drive headquarters.