SAN FRANCISCO — A civil trial focused on control of the $500 million Koret Foundation is pitting its founder’s widow, Susan Koret, against its former president, Tad Taube, who still sits on its board.
While the suit centers on the allocation of foundation grants and a series of real estate deals, the trial in a courtroom here last month devolved into character attacks by both sides.
Koret, whose late husband, Joseph, founded the foundation and was its longtime chair, filed the suit in 2014, seeking to have Taube and San Francisco attorney Richard Greene, the foundation’s former general counsel, removed from the Koret board.
The lawsuit demands the recovery of millions of dollars she claims were granted to projects outside the scope of the foundation’s original mission, which was to help the poor and aiding Jewish communities in Northern California’s Bay Area and Israel.
According to the suit, Taube “autocratically controlled the Koret Foundation as a personal piggy bank to aggrandize his name and funnel millions of dollars annually to favored causes.”
The lawsuit accuses Taube, who also is the chairman of his own charitable organization, Taube Philanthropies, of diverting Koret Foundation funds to Jewish projects in his native Poland — including the Polin Museum of the History of Polish Jews in Warsaw — as well as to conservative groups in the United States, such as Stanford University’s Hoover Institution.
Taube, who was born in Poland, fled the Nazis and went on to make a fortune in real estate and venture capital in Northern California. He was the foundation’s president for 32 years until he stepped down in June 2014.
Susan Koret met Joseph Koret when she was hired as a caregiver for his first wife, Stephanie. They married after Stephanie Koret died in 1978.
Both Susan Koret and Tad Taube have testified at the trial, which opened April 18.
Taube, testifying in Superior Court on April 26, noted that he had been suffering recently from shingles and an “erosion of energy.” Much of his testimony centered on his history with the Koret Foundation and involvement in real estate deals, in which Taube earned commissions on the sales of Koret properties he had co-owned with Joseph Koret.
Taube addressed questions about Koret grants to the $45 million core exhibition of the Jewish museum in Warsaw, saying he had made assurances to the museum that he would cover any shortfall in funding but had never asked the Koret Foundation to do so.
Taube also testified that he was aware of an investigation into allegations he had engaged in “unwanted hugging and kissing” of women at the Hoover Institution. Lawyers had not pursued the issue further as of midweek.
Koret also took the stand on April 26. Under questioning from defense attorney Susan Harriman, Koret, a native of Korea who acknowledges having difficulties with English, gave halting answers to basic questions, such as defining her role on the board and how much the foundation has given to various grantees.
Asked why she abstained or voted no on certain proposals before the board, Koret said she could not recall the reasons. She remembered voting no on one real estate sale when the minutes showed she had voted yes.
Asked why she emailed foundation staffers asking for 14 changes to the minutes of an April 2014 board meeting, Koret claimed they were inaccurate but could not say how. She also could not remember writing the email, which was in perfect English. Koret said her niece sometimes helps her write.
Koret also denied that she is an officer of the foundation, even though, as its chair, she is indeed an officer.
Koret’s testimony took an awkward turn when she could not explain the meaning of Jewish peoplehood (other than to say “identity”), describe the Holocaust, or explain what was meant in an ad campaign touting her lawsuit that “the poor in the Bay Area are being shortchanged” by the Koret Foundation.
Asked who was shortchanging the poor, Koret had no answer. She acknowledged she did not know what the term “shortchange” meant.
Koret said she was simply upholding the wishes of her late husband, who had wanted the foundation to be a positive force. Asked why she voted to decline grant requests by mainstream Jewish organizations that fight anti-Semitism and anti-Israel activity, such as the Israel on Campus Coalition and the Israel Project, she said they were “too political, too negative.”
On April 22, Anita Friedman, a co-president of the Koret board, testified that Koret was incapable of handling her duties as a foundation board member. Koret was named the foundation’s chairwoman for life in her husband’s will after Joseph Koret died in 1982.
Friedman, who also is the executive director of the San Francisco-based Jewish Family and Children’s Services, testified that she gave a presentation on the Holocaust to the foundation’s board and that Koret told her: “I didn’t know about the Holocaust. Joe never told me.”
Also on April 22, a former foundation employee, Kirsten Mickelwait, testified that she was fired after rebuffing Taube’s efforts to set her up romantically with his friend, venture capitalist George Sarlo, founder of the San Francisco-based Sarlo Foundation. When she told Taube that she was not interested, Mickelwait testified that Taube responded: “Honey, sex comes and goes, but money is forever.”
In the lawsuit, Koret also accuses Taube and other board members of blocking her from making former San Francisco Mayor Willie Brown president of the board. Instead, when Taube retired as president in 2014, Friedman and Michael Boskin became co-presidents.
Koret also contends that the foundation had losses of about $34 million because of actions taken by Taube and other board members, including the untimely sale of Bay Area real estate and expenses related to the Hoover Institution and other causes. That figure includes $93,000 for a mural at the foundation’s new home, which featured a portrait of Taube with Joseph Koret.
Greene, the former Koret Foundation general counsel, testified that the real estate deals were proper, timely, and lucrative for the organization.
But Herbert Beller, a Northwestern University law professor specializing in federal tax law who was hired by Susan Koret to examine the foundation’s real estate deals, testified last week that some of those transactions “raised serious tax risks and exposures” and amounted to “flat-footed self-dealing.” However, Beller did not testify that the deals were financially unwise or not lucrative.
The Koret Foundation has issued $500 million in grants since its founding in 1979, supporting education, hospitals, humanitarian groups, the arts, and Jewish life in the Bay Area. It supports similar projects in Israel, and in recent years also has focused on Jewish life in Poland.
Koret’s attorneys said in court that all funds given to charity food programs by the Koret Foundation over the years paled in comparison to what Taube directed to the Hoover Institution, and that Koret favored increasing food-aid donations in the Bay Area instead of giving money to global Jewish causes such as the museum in Warsaw.
But on the stand Friedman defended the museum grants, saying they were appropriate and worthwhile.
“Poland is central to the Jewish story,” Friedman testified. “More than 80 percent of American Jews trace their roots to Poland and that part of the world.”
J., the Jewish news weekly of Northern California, via JTA