For Immediate Release
Media Contact: Todd Dvorak
(208) 334-4112

Date: April 4, 2015

Attorney General Report on Idaho Aquarium Finds Questionable Use of Charitable Funds, Poor Record Keeping

(Boise) – Attorney General Lawrence Wasden has concluded his investigation into Idaho Aquarium Inc. and issued a report showing a pattern of bad judgment and questionable use of charitable resources by former executives and board of directors.

Wasden released the findings today of his investigation, which revealed problems ranging from poor and incomplete record keeping to deceptive solicitations for charitable donations to excessive compensation paid to former executives.

The Attorney General’s Consumer Protection Division began its investigation in September 2013 amid allegations the board and other officials were mismanaging charitable assets. The investigation coincided with separate federal criminal cases involving Idaho Aquarium founders Christopher Conk and Ammon Covino.

Idaho Aquarium ceased operations last fall. The Aquarium of Boise, a nonprofit corporation with no relationship to Idaho Aquarium, now owns and operates the public aquarium. The corporation’s leadership team has voluntarily adopted most of the recommendations outlined in the Attorney General’s report.

“I take very seriously my statutory duty to protect charitable assets from waste or misappropriation,” Wasden said. “It’s my hope that this investigation and the findings contained in the report will provide all of Idaho’s charities a clear roadmap for better managing their charitable assets.”

Under Idaho law, the Attorney General has authority to supervise and investigate organizations holding property subject to a public or charitable trust. Like other tax-exempt nonprofit corporations, the Idaho Aquarium held its property – its animals and exhibits – as charitable assets for the benefit of the public.

The Attorney General is also charged with enforcing the Idaho Charitable Solicitation Act, which prohibits a person from engaging in unfair, false, misleading, deceptive or unconscionable acts or practices while planning or conducting charitable solicitations.

Wasden’s investigation of the Idaho Aquarium was limited to activities between January 2012 and October 2013, because aquarium officials failed to maintain accurate or reliable records throughout its operation. Missing financial records, board meeting minutes and resolutions made it difficult for the Attorney General to develop a complete history of what occurred.

In his report, Wasden made several factual findings, including:

  • Inadequate record-keeping practices: The Idaho Aquarium’s financial, tax, inventory and board records were incomplete and inaccurate. The unsatisfactory state of the records made it impossible for the Attorney General to determine the extent of charitable fund misuse.
  • Excessive compensation and benefits: The board approved paying Covino more than $140,000 in 2012, despite the fact he spent much of his time that year developing a for-profit aquarium in Oregon.
  • Inadequate supervision of executives: The board neglected to oversee or question Conk and Covino’s activities, failed to protect charitable assets and adopted a laissez-faire approach that put the Idaho Aquarium’s charitable assets and the organization at risk
  • Failure to remove executives: Even after the federal government indicted Conk and Covino on felony charges, the board did not attempt to remove them from leadership positions. Conk and Covino continued their association with the Idaho Aquarium, further damaging the organization’s fragile reputation and financial status.

“As stewards of the charitable organization, the board of directors has a duty to use its charitable assets in a way that fits with the organization’s mission,” Wasden said. “In this case, the former members of the board didn’t understand or fulfill their responsibilities, and, as a result, the aquarium and its mission suffered.”

Idaho law authorizes the Attorney General to file a lawsuit against an organization to recover misappropriated charitable assets. The organization also has options for recovering assets, including filing a lawsuit against a negligent executive or filing a criminal police report against a person who intentionally steals from the organization.

Existing Idaho law, however, does not give the Attorney General the authority to hold individuals civilly or criminally responsible for misappropriating charitable assets.

“There are statutory limitations that prevent my office from taking action against those individuals responsible for the loss and misuse of Idaho Aquarium’s charitable assets,” Wasden said.

In this case, the Attorney General elected not to file an action against Idaho Aquarium because it could have led to the closure of the aquarium, a result Wasden said nobody wanted. Had the Idaho Aquarium lost ownership of the facility, Wasden said its assets were only sufficient to fulfill its federal probation requirements.

“A lawsuit in this case would not have benefited anyone,” Wasden said. “Ultimately, I’m pleased that Boise’s public aquarium is now in good hands, and it’s my hope it will continue to benefit the community.”

The report is available by clicking here.

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