Milwaukee School of Engineering’s former director of planned giving is suing the school, alleging he was fired after filing complaints with the SEC and IRS over the handling of a donor’s trust account.
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The Milwaukee School of Engineering.[/caption]
According to the lawsuit, Edward Fitzpatrick III filed the complaints Feb. 19, alleging MSOE was withholding $2.2 million a donor was to receive under a trust arrangement with the school. Fitzpatrick, who started working at MSOE in December 2014, was fired March 2.
“We do not comment on personnel matters,” said JoEllen Burdue, a MSOE spokeswoman. “As for any legal claim by Mr. Fitzpatrick, we believe it is without merit.”
The donor contributed $400,000 to $500,000 to an irrevocable charitable remainder unitrust account in late 1997, the complaint says. The trust pays out a fixed percentage of its value to contributors based on their pro-rata interest in it. The payments continue for 20 years or until the beneficiary dies, at which point the amount goes to MSOE.
The complaint, filed last week in the U.S. District Court for Eastern Wisconsin, says in March 2017 Fitzpatrick discovered MSOE was deducting the value of prior year distributions from the market value before determining the payments, allegedly a violation of the terms of the trust.
The fair market value of the trust was reduced from $2.4 million to almost $1.2 million because of the deduction, the complaint says. Fitzpatrick’s additional research following the discovery determined MSOE was allegedly withholding $2.2 million from the donor, according to the complaint.
Fitzpatrick says he took the information to Dawn Thibodeau, MSOE chief financial officer, but no action was taken. The complaint says Fitzpatrick told Jonathan Kowalski, MSOE senior director of development, about the issue two days later. Kowalski allegedly said “We need to cover our asses on this,” the complaint says.
The complaint says Fitzpatrick also met with Jeff Snow, MSOE vice president, and two trust law attorneys in July 2017 to discuss the issues he discovered, but no action was taken. The complaint does not detail any other meetings or conversations from the July meeting until the complaints were sent to the SEC and IRS on Feb. 19.
Fitzpatrick gave MSOE’s director of human resources, Rebecca Ploeckelman, copies of the complaints the day they were sent and played a recording of the March conversation with Kowalski, the complaint says.
Fitzpatrick says he was terminated for filing the complaints, which he describes as protected activity under the Dodd-Frank Act. He’s looking to get his job back, received double the back pay he would be eligible for and other special damages.