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Charity criticized for thousands spent on sports suites, pay


The chairman of a Louisvillebased nonprofit that runs inmate halfway houses is standing behind decisions to spend tens of thousands of government dollars to lease luxury sports suites and pay its CEO a generous salary.

Dismas Charities Inc. gets virtually all of its revenue from the federal government and the state of Kentucky.

The Courier-Journal
reported recently that the charity had spent $92,000 to lease a luxury suite at Louisville’s new downtown arena and also that in 2008 it paid its chief executive, Ray Weis, more than $600,000.

The newspaper added this week that Dismas also spent $45,000 for a suite at Papa John’s Cardinal Stadium in Louisville.

James Simon Sr., chairman of the board of Dismas Charities Inc., told the newspaper he proposed leasing the suites “to show our presence in Louisville. This is our corporate headquarters. It’s to put our name out to the public.”

Simon, a consultant at Value City Furniture, has served as board chairman for 11 years. He said Weis works “80 to 90 hours a week” and is “worth every bit” of what he is paid, which Simon said is based in part on meeting goals for revenue and contracts.

Founded in 1964, Dismas operates 27 inmate “re-entry” facilities in 12 states, including seven in Kentucky. It has more than 600 employees, Weis said.

Spokeswomen for the U.S. Bureau of Prisons, with which Dismas has 21 contracts, and the state Corrections Department, declined to comment on Dismas’ expenditures. The IRS, which regulates nonprofits, also declined to comment.

The state Corrections Department has 17 contracts with Dismas Charities for 2011 worth a combined $1.2 million, according to records released by the Finance and Administration Cabinet in response to an open-records request.

The Bureau of Prisons said it paid Dismas $28,520,556 last year.

In 2008, Dismas got about 99 percent of its $36.6 million budget from state and federal contracts; it received $760,945 in contributions that year.

The organization’s winter 2010 newsletter cites contributions from 85 individuals and other entities, including three schools and a kindergarten class.

Weis said his compensation was set by a Chicago-based national compensation consultant, whom he declined to name, based on comparable salaries of others in similar positions.

“I think my compensation is reasonable,” he said. “It took me 27 years to get where I’m at.”

Dismas paid Weis more in 2008 than Louisville-based Papa John’s International Inc. paid chairman and CEO John Schnatter that year ($542,082), or Republic Bancorp paid president and CEO Steve Trager ($545,089).

Dismas pays its four top offi cers more than $200,000 each, according to its 2008 tax report, the most recent available; its secondhighest paid employee, executive vice president Jan Kempf, was paid $452,047 that year.

Weis said the suites will be used for “marketing” but acknowledged that it would be illegal to try to woo state or federal corrections officials by taking them there.

He noted that all of Dismas’ contracts are competitively bid and that Dismas is recognized nationally for cost savings. “We are very, very good stewards of our money,” he said.

Charles Mattingly, president and CEO of the Better Business Bureau in Louisville, said Dismas is a large organization and that the BBB’s charity standards don’t limit compensation for chief executives.

Defending the expenditures, Weis and Simon noted that Dismas doesn’t rely on charitable donations.

“We don’t take any donations from the community, hardly,” Simon said.

But Lindsay Nichols, a spokeswoman for GuideStar, which tracks 1.8 million nonprofit organizations, said that is a distinction without a diff erence.

“A public charity is a public charity,” she said. “All public charities receive favored tax status, therefore all public charities have a responsibility to be fiscally responsible.”

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