The executive assistant testifies that she was responsible for shipping products for the ancillary activities of a fiduciary – Twin Cities

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An executive assistant at the Otto Bremer Trust recalled faxing, filing and shipping packages for Eagle Street Partners, a side business run by trust director Brian Lipschultz, using her own credit card to pay the fees.

When she expressed concerns to the foundation’s financial controller that Lipschultz had told her to seek reimbursement from the trust for expenses incurred by her companies, the trustee offered a solution. From then on, she could use her own credit card.

“Issue resolved,” Lipschultz wrote in a September 16, 2019 email to Executive Assistant Marissa Schon, Controller Tony Thompson and two other directors.

This was not the only time staff members became aware of apparent “fraudulent transactions” at the heart of the allegations made against the trustees of the St. Paul-based Otto Bremer Trust by the prosecutor’s office. General of Minnesota, which regulates charities.

THIRD DAY OF TESTIMONY

Administrator Charlotte Johnson was called to the witness stand on Wednesday, during day three of testimony in a probate hearing that could determine whether the three directors are allowed to retain their positions at the $ 1 billion philanthropy of dollars.

The move could have far-reaching implications for philanthropy’s core asset – the St. Paul-based Bremer Bank, a $ 15.7 billion institution and a major Midwestern agricultural lender, which was also founded in the 1940s. The three directors sought to sell controlling shares of Bremer Financial Corporation to East Coast hedge funds as a first step towards a likely bank sale.

In 2019 and again in 2020, following the death of George Floyd in Minneapolis and during the early months of the pandemic, trustees awarded “strategic” and emergency grants to nonprofits and charitable causes. throughout the Midwest without the intimate involvement of program staff. Several of the causes appeared questionable to some staff.

Program manager Tessa Wetjen contacted the Minnesota attorney general’s office to express concern about grants to Abria Pregnancy Resources in St. Paul, which provides anti-abortion counseling, and had closed at the time. . An additional $ 85,000 went to Fluence Media, a public relations company run by Blois Olson, to fund the “MN Good” philanthropy newsletter, which Wetjen described in writing as a “contract with a public relations company. public pretending to be a subsidy ”.

The funds went to Christian organizations such as Metro Hope Ministries, Next Chapter Ministries, Special K Ranch, Minnesota Teen Challenge and the Hope Manor Foundation. This seemed to go against the founding documents of the trust which did not allow religious grants beyond church music and church building.

“It didn’t look like a place with a lot of integrity,” Wetjen said from the witness stand. “I felt there were inappropriate subsidies. “

RECIPIENTS OF SUBSIDIES IN QUESTION

During cross-examination, an attorney for the trustees asked if Wetjen was aware that some of these faith-based organizations were providing affordable and emergency housing. The grants may well be in line with Otto Bremer’s goals, developed in the war years following the Great Depression, to provide emergency aid during disasters and public health crises.

Among the recipients was Rachel’s Light, a nonprofit organization based in Owatonna, Minnesota. “Did you know that this organization provides emergency shelter for women victims of domestic violence? Said the lawyer.

Wetjen, who resigned from his post, was among the staff who testified that subsidies had become a concern before the pandemic.

In 2018, a $ 500,000 grant was made to Friends of St. Paul College, where Johnson’s husband had served on the board of trustees, although the trust has a tradition of not funding schools. In 2014, the Como Friends group received $ 1 million for the Como Zoo seal exhibit, although administrator Daniel Reardon was a member of the Como Friends board and the trust did not fund them. animal causes. The Ordway Center for the Performing Arts received another million dollars, although the trust did not fund the arts.

These grants were up to 20 times larger than the trust’s average $ 50,000 grants, attorneys for the attorney general’s office noted in questioning.

The attorney general’s office asked Johnson about concerns she herself raised about financial compensation for trustees. Over the course of a decade, the trustees’ salaries, including investment costs, have grown from around $ 50,000 each to over $ 300,000 for Johnson and over $ 500,000 for Reardon and Lipschultz.

In 2014, the trustees fired executive director Randi Roth, who didn’t shy away from raising concerns, and the pair opted to pay each other “investment advisory fees” – a percentage of investment payments from the trust. Johnson declined the additional charge.

At the same time, however, the directors hired the Tealwood Investment Fund to act as investment advisor, Johnson confirmed. Tealwood consisted of her husband, Ward Johnson. The contract ended less than a year ago, after the attorney general began his investigation.

OTTO BREMER TRUST:

Based in Saint-Paul. 46 employees.

Founded in 1944 by the philanthropist Otto Bremer.

Issuing over $ 50 million annually in grants and charitable loans in Minnesota, Wisconsin, North Dakota and Montana.

Owns 92 percent of Bremer Bank.

Aggregate assets of $ 1 billion to $ 2 billion.

Led by Trustees S. Brian Lipschultz, Charlotte Johnson and Daniel Reardon.

BREMER BANK:

Based in Saint-Paul. 83 branches. 2000 employees.

Minnesota’s third-largest bank in terms of assets ($ 15.7 billion).

Earned a net income of $ 155 million in 2020 and distributed $ 73.4 million to the Otto Bremer Trust that year.

Major Midwestern Agricultural Lender.

General Manager Jeanne Crain.


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