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Indiana Attorney General Steve Carter is suing the Olin B. and Desta Schwab Foundation, alleging that it was moved illegally from Fort Wayne to Nevada to escape scrutiny by state regulator, the Fort Wayne Journal Gazette reports.
The Schwab Foundation was created in 1989 by Olin Schwab to help area students choose careers. In the past few years, however, the foundation's board dwindled to just three members — including Richard H. Blaich and Jon Garver, defendants in the AG's suit — paid staff was fired, and the foundation was moved to Nevada. An August investigation into the foundation's operations found that a growing number of grants were made to out-of-state schools and that the foundation had paid for a luxury house in a gated community in Lake Las Vegas and picked up nearly $90,000 in board members' travel expenses and vehicle leases.
Carter's office is seeking to freeze the foundation's assets and remove its board members. The suit contends that the board acted illegally in 2003 when it dissolved the Fort Wayne-based foundation and merged it into a Nevada foundation with the same name and board members. After the merger was completed, all the assets of the Indiana foundation became the property of the new Nevada foundation, including the home. In addition to Blaich and Garver, the suit names former board members John Dortch and Charles Conville, as well as Asset Funds LLC, the Delaware corporation used to buy the house, as defendants.
"We certainly view these expenses as questionable and continue to investigate them," said Carter, stressing that his biggest concern is the $1.5 million house. "The public trust in this institution has been betrayed."
Stockman, Dan. “State Sues Schwab Foundation.” Fort Wayne Journal Gazette 12/29/05.
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