In June of 2006 after an “extensive internal investigation,” John S. Carter was “terminated” as president of the Independence Seaport Museum after 17 years at the helm. On January 22, 2007, the museum filed a lawsuit in Massachusetts, Carter’s home state, allegeding the misappropriation of $2.4 million. Ouch! Carter’s lawyer also confirmed to the Philadelphia Inquirer that his client is also under investigation by the FBI.
Ex-head of Seaport Museum accused of fraud – Officials claim John S. Carter defrauded the institution of $2.4 million to support his lifestyle – Philadelphia Inquirer (January 23, 2007)
Enigma who went overboard – Nobody acknowledges really knowing John S. Carter, who stands accused of bilking the seaport museum of $2.4 million – Philadelpha Inquirer (January 23, 2007)
Museum is righting itself, officials say – Philadelphia Inquirer (January 24, 2007)
Seaport museum alleges former president misused funds – Philadelphia Business Journal (January 23, 2007)
Suit alleges $2.4 fraud – Cape Cod Times – (January 24, 2007)
Former Seaport Museum Head Now Accused of Filching $2.4 Million – Wheremostneeded.org (January 30, 2007)
This scandal is tied into a larger one that involves a state senator whose name still appears on the Independence Seaport Museum’s website (as of this post) as a Member of the Board of Port Wardens which appears to be their governing body.
Carter’s salary was reported to be over $300,000 which was more than what the Philadelphia Art Museum, a world class institution, pays its president. While I have never actually visited the Independence Seaport Museum, this seems like a lot of money for a museum that reportedly has had to repeatedly dip into its endowment to shore up operating deficits.
As a former nonprofit executive director, I find this story to be very disheartening. Trust is the commodity on which nonprofit organizations trade; after it is betrayed it is difficult to win back. With so much competition for philanthropic support, nonprofit leaders have to be ever vigilant in protecting the reputation of their organization and the social investments made in and by their community. This is a significant responsibility that must be shared by staff and board members.
I suspect that there is still a lot that will play out in this story in the coming months. Hopefully, the current leadership of the Independence Seaport Museum will take this crisis and transform it into an opportunity to make their organization stronger. The best place to start would be for the board carefully review their governance model and decisionmaking practices and to recruit a Level 5 Leader for the current president vacancy.