Matthew Kauffman, Vanessa de la Torre
The Hartford Courant
6:20 PM EST, November 4, 2013
HARTFORD — The state Attorney General's office and the Department of Consumer Protection launched a joint investigation Monday into the Doc Hurley Scholarship Foundation, pledging to unravel the troubled nonprofit's finances while also working to restore the charity's good works.
"We're looking for any records detailing the governance of the foundation over the last few years, detailing moneys coming in and moneys going out," Deputy Attorney General Perry Zinn Rowthorn said. "This is a high-priority matter. We're going to move as quickly as we responsibly can."
The probe was sparked by a story in Sunday's Courant revealing that the foundation, created four decades ago by Hartford legend Walter "Doc" Hurley, had lost its tax-exempt status and its board of trustees and has awarded no more than two new scholarships in the past five years. The foundation also has drawn down at least two-thirds of a $1.7 million endowment raised early in the last decade that was supposed to sustain the foundation indefinitely.
Zinn Rowthorn said state officials are reaching out to Muriel Hurley-Carter — Doc Hurley's daughter and the foundation's executive director and sole employee — and will also issue subpoenas to collect financial records. Officials are also attempting to identify any current trustees, though it appears the board has dissolved.
The Department of Consumer Protection, which shares oversight of charities with the Attorney General's office, is also attempting to contact foundation officials, both to dig into the group's finances and to assure that they do not solicit funds or represent the foundation as a tax-exempt charity, consumer protection Commissioner William Rubenstein said.
The foundation has continued to host the annual Doc Hurley Scholarship Basketball Classic, a high school tournament in December that is billed as a charitable fundraiser for scholarships.
"We're hoping to have a frank and full and quick dialog," Rubenstein said.
In addition to the financial investigation, Zinn Rowthorn said his office and consumer protection officials are focused on "getting this charity back up on its feet and doing the good work that Doc Hurley and others intended it to do."
To that end, they are considering the possibility of a temporary board of directors that would take over operation of the foundation. The attorney general also has the authority to seek a formal receivership, though that option would be more costly.
"We're obviously aware of reports that there's been a substantial diminution of the charitable assets already," he said. "So to the extent that we can bring on willing folks with aptitude to run charities effectively in the near-term, that is something we will be taking a very serious and hard look at."
Zinn Rowthorn said his office has contacted Hartford Mayor Pedro Segarra's office for input in reviving the foundation, "being sensitive to the fact that this is a charity that serves needs in his community."
Segarra, through a spokeswoman, said Monday that "Doc Hurley's contributions and love for the community in Hartford is something that will never go away." He declined comment on the state investigation or efforts to save the foundation.
A message left with Hurley-Carter, asking about transferring management of the foundation, was not returned. Last week, she acknowledged to The Courant that the work of running the foundation had become overwhelming and that it had been years since she placed scholarship applications with the dozens of high schools whose students were eligible.
Hartford leaders are also working on ideas to rescue the scholarship program. Rep. Douglas McCrory, whose district includes the city's North End, said that he plans to reach out to community members to discuss resurrecting the foundation and saving the reputation of a man he considers a personal role model. He also volunteered to serve on the organization's board of trustees.
McCrory said Hurley has been a giant in Hartford for mentoring youth about the importance of education and helping needy students attend college. Hurley, a former Weaver High School standout athlete who later became a school administrator, began raising money and giving out scholarships in the 1970s. Forty years later, the Doc Hurley foundation has helped more than 400 students pay for college.
"It's very, very disappointing to see what he started years ago get to a place where it is right now," said McCrory, a Hartford Democrat. "His reputation and everything he stands for — that's his legacy. And his legacy cannot be tarnished. It just can't ... We need to fix this now."
Hurley, 91, said last week that he was unaware the foundation was in trouble.
"To hear what you're telling me now, it's a sad day," Hurley said. "It's a sad day because, if this happened, it means that a lot of people have been let down."
Rubenstein said the consumer protection department is also looking at new ways to identify troubled charities more quickly. Currently, larger nonprofit groups are required to file financial documents annually with the department, and they face automatic revocation of their registration and right to solicit donations if they fail to file. The Doc Hurley Scholarship Foundation was deemed "inactive" in 2007 for failing to file paperwork, but there has been no process for identifying those inactive charities that deserve a closer look from regulators.
"We've largely been driven by complaints or information that's provided to us, rather than have an automatic audit," Rubenstein said.
Now, he said, the department is "looking at our processes to see whether or not we can be more proactive in identifying problems before it goes by too long."
In the shorter term, he said he is committed to keeping the foundation's promise alive.
"I think everybody agrees that its concept and its historic performance have been outstanding in terms of community service," Rubenstein said. "And so our main interest is finding a pathway so that it can restore itself to be able to do that."
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