Lappin

Some business practices at the Palm Beach Pops are leaving the orchestra founded by maestro Bob Lappin exposed to lawsuits and the scrutiny of the IRS, forensic accountants have told the non-profit.

Red-flagged by the Alpern Rosenthal financial sleuths: The Pops is plunking down $20,000 a year for the health insurances of Lappin’s fiancee and his maids.

Also, pops staffers have improperly factored in Lappin’s salary in the books, making it look like he took no pay when, indeed, he’s compensated handsomely. And Lappin is reimbursed for his use of a private jet he co-owns and limo rides, even when it’s unclear whether he is on Pops business or pleasure!

What’s more, the scathing report spells out how the group’s bylaws make Lappin, who’s also the Pops’ CEO and a board member, the sole person in the organization who gets to select, elect and reject members of the Pops board of directors. The board, which includes Lappin’s personal friends and business associates, then approves the conductor’s pay package — about half a million per season!

The forensic report caused such a ruckus that eight board members have resigned over the past month. Only six board members remain, just weeks before the new season’s opening concert.

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Board member Bernie Marcus, a Boca Raton billionaire, won’t even say whether he’s still on the board. Standout directors like former radio czar Dick Robinson and billionaire philanthropist Ken Langone have resigned but neither agreed to discuss the report.

But former clothing manufacturer Richard Pietrafesa did.

“The report is pretty bad,” he said. “We were just fed up with it. We all were friends of Bob’s, all of us gave upward of $100,000 to the pops, and some at least $1 million. Yet, he lied to us. Some of us didn’t know he was paid by the Pops.

“We were about to discuss the report at a board meeting a couple weeks ago, and Bob invoked his right to fire board members. So he fired me and (well-known patron of the arts) Pat Cook. He replaced us by a Pops’ staffer and his lawyer. He has no shame. Some of the stuff he did is borderline fraud.”

GOVERNMENT GRANTS

According to its latest IRS filings, the Pops receives about $150,000 a year from Palm Beach County but supports itself mainly through ticket sales, nearly $3 million in 2008.

Lappin, meanwhile, released this statement: “I can assure the community that the Pops has always been run in a fiscally responsible manner, which has enabled us to survive while others have ceased to exist. The Palm Beach Pops remains artistically and financially strong and we will do whatever it takes in order to protect its legacy.”

Of Pietrafesa’s allegations, the maestro said: “I don’t know what Mr. Pietrafesa is thinking. He knows I worked for the Pops’ first 11 years for no compensation.” The conductor pointed out Pietrafesa voted in favor of Lappin’s compensation package.

Langone

Chief in the forensic accountants sights was the board, whose members are hand-picked by Lappin then approve his pay package, expenses, use of a private jet and putting his galpal on the orchestra’s insurance plan.

In 2008, the Pops paid the conductor $14,000 per concert, according to the audit. There are 36 shows in Boca and West Palm Beach per season (November through April). So Lappin got upward of $500,000!

While it is on par with some of the best-known philharmonic conductors in major cities, who earn upward of $1 million a year, the salary makes Lappin one of the local non-profit world’s best-paid workers.

LAWSUIT, THEFT

Robinson

One ex-board member who spoke on the condition he not be identified, defended the practices.

“Bob Lappin is the Pops,” said the ex-board member. “What he gets paid, the benefits, the plane, that’s insignificant compared to what he does. It’s a world-class orchestra. And he started it with his own money.”

Page2Live obtained the report that only board members and high-ranking staff members were supposed to see. It was accompanied with a letter from Pops lawyer Marty Katz to the board: “As the report identifies areas of potential exposure,” Katz wrote, “I suggest that this report be kept confidential.”

The financial review was ordered by the board in the spring, as the orchestra set out for a tough stretch. Lappin is getting sued by a former employee who claims he forced her into a long-term affair that took them at times to swingers’ clubs. And two weeks ago, Boynton Beach Police arrested former Pops executive Robert Aronson. He’s accused of embezzling $200,000 from the maestro’s personal corporation, Lappin Communications Florida.

FINANCIALLY SOUND

The good news is that the audit showed there’s no money missing from the Pops, except that Aronson gave himself several raises without the board’s approval. And the organization is on solid financial footing with strong ticket sales.

However, the review showed the Pops pays Lappin as a contractor through LFC, a no-no in the charity business, then fails to report the salary on the yearly IRS filings. The accountants advised the Pops to pay Lappin as an employee and report properly his compensation package.

The report also shows Lappin’s use of a private jet he owns with others is being reimbursed by the Pops. That set back the non-profit about $460,000 over a little more than two years. When he used the plane for personal travel, Lappin paid the Pops — but sometimes two years later!

Other practices the accountant told the Pops to change: Unclear record-keeping on Lappin’s business and personal expenses; and Lappin’s habit of leaving signed blank checks for routine expenses.

I’m told the Pops’ regular accounting firm, Glenn Zalk CPA in New York, already wrote the board to defend its handling of the orchestra’s books has been on the up and up.

As for Lappin’s fiancee, Gloria Briggs, a Pops insider said she is officially an employee — at the salary of $1 per year. Lappin, meanwhile, regularly reimbursed the Pops for his maids’ health insurance.