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A second scandal involving Harvey Weinstein has come to light in the wake of the allegations of sexual harassment and assault against the disgraced producer, this one involving the American Foundation for AIDS Research (amfAR) and fashion designer Kenneth Cole, who is a nonexecutive chairman of the board of the nonprofit organization.
Weinstein has been a longtime supporter of amfAR, and suspicious activity between the two parties was first brought up in reports by both The New York Times and The New Yorker. However, a new story published today by The Huffington Post‘s Yashar Ali delves further into the specifics of the deal, which took place in spring of 2015.
According to the report, Weinstein attempted to resolve a financial obligation to the American Repertory Theater (ART) by hosting a charity auction in Cannes with amfAR, an organization to which he had publicly lent his support to for decades, and which he had helped earn a high-profile sheen by encouraging celebrity turnout at their annual galas in Cannes.
Weinstein apparently owed $600,000 to ART for a trial production of Broadway-bound Finding Neverland, which he had produced. He had an arrangement with the theater that he and other show investors would be reimbursed for money they put into the trial provided they got third parties to donate the amounts. There was a hard deadline of June 1 for Weinstein to wire the owed $600,000 to ART or else he would not be reimbursed.
Weinstein’s plan, therefore, would be to split the proceeds — estimated to be around $1.2 million — from the charity event auction lots with amfAR. The plan was allegedly agreed to by Cole, even though the organization’s CEO Kevin Frost had a policy against splitting revenues, and despite multiple internal protests from amfAR staff. Items up for auction included a photo shoot with Mario Testino (arranged through Weinstein’s connections) and tickets to his company’s Oscar party. However, the auction only netted approximately $900,000, at which time Weinstein and Cole renegotiated so that ART would receive $600,000 in full, and amfAR approximately $310,000.
Issues arose due to ART’s hard deadline of June 1 for payment. Some of the bidders had not yet paid for their lots, and there was no way to guarantee they actually would — so amfAR wanted to wait until after the experiences had been fulfilled to transfer the money. To compensate, Weinstein decided to wire $600,000 of his own money via a holding company to amfAR so that they could in turn make a payment to ART.
According to internal emails from CEO Kevin Frost, Weinstein demanding reimbursement immediately left amfAR vulnerable to “material risks to its financial integrity and reputation.” An investigation followed, led by Texas lawyer Thomas Ajamie, looking into whether or not the transaction violated IRS requirements that donations not be used to satisfy a commercial obligation. The result of Ajamie’s investigation, presented to the board, showed evidence of inappropriate activity; however, without Weinstein’s cooperation the report was inconclusive. A second investigation, led by lawyer Orin Snyder, was then carried out at the request of Cole and other members of the board; Snyder concluded that the transaction was lawful.
Following the ordeal, in the spring of this year, as investigations into Weinstein’s sexual misconduct deepened and at which time he was made aware of Ronan Farrow’s piece, Cole asked members of the board to sign a nondisclosure agreement preventing them from speaking about Weinstein; in return, Weinstein would make a million-dollar donation if all board members signed. Writes Ali, “Board members whom I spoke with said they were deeply concerned about the intent behind the nondisclosure agreement. Was it just about amfAR and the transaction, or was it about something more nefarious?”
In an email, Cole allegedly wrote of the NDA that it meant “we won’t involve ourselves in Harvey’s affairs in the future.” The scandal begs the question of what Cole knew about Weinstein, his relationship with amfAR and his impending downfall, that perhaps the rest of the board did not? All but four members signed it.
A representative of those board members who did not sign the document (Arlen Andelson, Mervyn Silverman, Vin Roberti and Jonathan Canno) gave the following statement to The Hollywood Reporter:
We discovered that in June 2015 the non-executive Chairman of the Board of Trustees caused $600,000 to be transferred to a recipient outside the organization despite the clear objections of the executive management team and without the knowledge of the entire voting members of the Board. We are extremely concerned about this and other actions by our non-executive Chairman and other members of the board and their apparent failure to abide by our governance policies on a number of occasions, which we believe was in clear violation of their fiduciary duties to the organization. In addition to raising these issues with the entire Board and retaining additional outside counsel to conduct a review of the matter, we believed it was our obligation to report them to the NYAG and seek to prevent this conduct from continuing and causing significant long-term damage to an organization that does such important work and is so close to achieving its mission of finding a cure.
In response to the story, Cole issued the following statement to The Hollywood Reporter:
Since joining amfAR’s board three decades ago, I made the organization’s mission to save lives and find a cure for HIV/AIDS my own. During that time, amfAR has seen its annual revenues triple to more than $50 million and launched the greatest expansion of the foundation’s grant making with its $100 million investment strategy in support of its “Countdown to a Cure for AIDS Initiative.” As a result, the organization has played a significant role in breakthroughs for AIDS research, treatment, and prevention.
In regards to the actions of Harvey Weinstein recently revealed in media reports, let me repeat publicly what I have been saying privately: I find his actions deeply disturbing but if there is any good to come out these revelations it is the start of a penetrating self-reflection of our society and our collective behavior.
Over the last several weeks Weinstein’s charitable role in supporting amfAR has become the subject of debate and scrutiny. After the New York Attorney General’s Office reviewed the transaction between amfAR and Weinstein they declined to pursue an investigation. It did, however, highlight opportunities to strengthen the governance of the organization. I am personally committed to implementing the OAG’s recommendations to ensure that our fundraising policies and procedures are never called into question again. The mission is too important, there remain millions of lives at risk, and the work is far from finished to allow any of us to be distracted from the task of conquering HIV/AIDS.
Oct. 19, 11:28 a.m. Updated with a statement from Kenneth Cole.
Oct. 19, 3:36 p.m. Updated with a statement from amfAR board members.
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