Onetime employee says former UC regent mishandled donations

Ward Connerly, a former University of California regent who led efforts to end affirmative action here and across the country, has been accused by a former employee of mismanaging donations for personal gain.

Jennifer Gratz, who resigned in September, has sent a letter to the board of the nonprofit organization Connerly heads in Sacramento, urging an investigation into what she termed financial irregularities and excessive compensation to Connerly. Before working for Connerly, Gratz was the named plaintiff in a landmark 2003 Supreme Court case that struck down race-based admissions at the University of Michigan.

In the letter, sent by her attorney to the board of Connerly’s American Civil Rights Institute, Gratz said the organization and an affiliated advocacy group were in financial crisis. She urged the board to look into irregularities, including annual compensation to Connerly that in recent years amounted to more than $1 million.

The letter also said that the Internal Revenue Service and California attorney general’s office were investigating related salary, financial and ethical issues involving Connerly’s organizations.

Since June, because of the ongoing investigations, “the organizations have ceased almost entirely doing work related to their charitable missions,” the letter said.

In an interview Wednesday, Connerly, 72, acknowledged that the American Civil Rights Institute has had financial difficulty in recent years, and that his annual compensation at times has amounted to more than half its revenues. Tax records show that Connerly reported $1.3 million in total compensation for the fiscal year ending June 2010, for example.

He said that he was paid for management of the organization, for fundraising and for speeches, and that he had used some of his compensation for research, security and other expenses. He also said the group had since reduced his pay to $850,000.

But Connerly contended that the letter’s contents were almost entirely false and that Gratz was motivated by disappointment upon learning that she would not replace him as head of the nonprofit. “I’d say that 95% of what’s in this letter is conjecture and falsehood, based on the anger of a jilted ex-employee,” he said.

A man of black, white and Native American ancestry, Connerly broke into the national spotlight in 1995 by using his position as a regent to push the University of California to dismantle its affirmative action programs in admissions and employment.

A year later, he helped lead the successful campaign for Proposition 209, which banned racial and gender preferences in state government. Later, with the help of Gratz and others, he carried that campaign to a series of other states, including Washington and Michigan.

Gratz’s letter, written by her attorney, Robert N. Driscoll, alleges a number of financial irregularities at the organization, among them that it “knowingly” issued inaccurate W-2 forms. Connerly said the errors were made inadvertently by a bookkeeper and have since been corrected.

In a statement to the Los Angeles Times, through her attorney, Gratz said: “Leaving ACRI after being a loyal employee for eight years was a difficult decision because I remain strongly committed to the principle of equality that ACRI served for many years and because I have appreciated the work of Ward Connerly — someone who I was lucky to at one time call a mentor and a friend. Unfortunately … I now have come to the conclusion that the resources provided to ACRI by its generous donors are not being properly spent and that ACRI’s mission is being jeopardized.”

She also said that she would cooperate with “any government investigation.”

rebecca.trounson@latimes.com

Los Angeles Times staff writer Paul Pringle contributed to this report.