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More Motion Picture Fund: $14 Million for Consultants?

An interesting tidbit I’ve just excavated from the audited accounts and tax returns of the Motion Picture and Television Fund: The troubled entertainment industry retirement home and medical network spends close to $20 million a year on what it describes as “professional fees.” That’s a whole lot of money. It’s money that simply does not […]

An interesting tidbit I’ve just excavated from the audited accounts and tax returns of the Motion Picture and Television Fund: The troubled entertainment industry retirement home and medical network spends close to $20 million a year on what it describes as “professional fees.”

That’s a whole lot of money. It’s money that simply does not appear in the accounts of a comparable not-for-profit full-service retirement community in the San Fernando Valley, the Los Angeles Jewish Home for the Aging. (The JHA’s official accounts itemize money for lawyers and accountants and a professional fundraiser, but no other significant professional services.) In fact, it’s enough on its own to cover the gaping deficit the MPTF says has motivated the decision to close down its hospital and long-term care nursing home.

So what are these fees? (You can see the exact audit figures for 2006 and 2007 here.) They have nothing to do with employee payroll, which accounts for close to $60 million annually according to the last available figures. One can only conclude, absent any other explanation, that they go to outside consultants.

Now, some of that money — about $5.5 million according to the Fund’s tax returns — goes to pay the hundreds of doctors within the MPTF network who are not direct employees. But what about the $1.1 million listed in the 2007 tax return as “consulting fees”? Or the stunning $13.7 million listed as “management fees”?

I’m told by an inside source that at least some of that money went to the Camden Group, the private medical consultancy whose reports paved the way for the decision to close the nursing home and hospital. (Jeffrey Katzenberg, the Fund’s chief fundraiser, told me the MPTF also calls on other consultants, though he did not name them.)

Camden has made many other cost-cutting recommendations down the years, but one has to wonder if the advice is really worth the high price tag. As my source, an MPTF employee privy to management decision-making, put it: “I’m sure they pay Camden a hell of a lot more than they save based on what Camden tells them.”

And another point. David Tillman, the MPTF’s chief executive, earns around $600,000 a year. If Camden and, perhaps, other consultants, are sucking up all this money and essentially laying out the key executive decisions, how can Dr. Tillman justify his already over-inflated salary? (Molly Forrest, his counterpart at the Jewish Home, earned 35 per cent less than he did in 2007, according to tax filings, and hired no outside management consultants at all.)

 
“Their dependence on consultants is almost laughable,” my source said. “If you need to have consultants, what do you need to pay these guys for?”

Ordinarily, I would ask the MPTF for an explanation of the figures and a response to my source’s points. But the MPTF has decided, in its wisdom, to suspend all contact with me. Any time they want to change their minds and explain these apparent peculiarities, I would of course be all ears.