Thursday, August 13, 2020
Home News Marine Mammal Care Center in Crisis

Marine Mammal Care Center in Crisis

By Terelle Jerricks, Managing Editor

The Marine Mammal Care Center in San Pedro recently announced it is in dire financial straits and needs to raise $1 million by June. Los Angeles County Supervisor Janice Hahn stepped up with $100,000 from her office, but that’s still a long way from the goal.

New Marine Mammal Care Center board president, Amber Becerra, left, accepting the check of $100,000 form Supervisor Janice Hahn’s office. Photo courtesy of Sup. Janice Hahn’s office

“We are saving lives here at MMCC and these precious animals need our help,” said a prepared statement released by the organization. “But we can’t do this alone—it’s going to take a village. We need you to come together to save this incredible organization.”

The statement attributed the Marine Mammal Center’s financial predicament to an increase in operating costs. In turn, those increases were said to have derived from an unusual mortality event that struck the California sea lion population between 2013 and 2017. The death of many sea lions created a population of their pups that were stranded on the beaches due to malnourishment. The event  took a toll on staff, volunteers and the financial footing of the organization, according to the statement.

This is all true, but to anyone who has paid attention to the Marine Mammal Care Center over the past 30 years, it would seem there’s more to this story. A lot of long-time observers, former board members and ex-volunteers say the whole thing sounds fishy. 

The questions are many, but the number one question is, “Has someone taken money from the cookie jar?”

With the available evidence, it’s not exactly clear. But from the perspective of some people close to the center, it looks more like interlopers tried to turn a volunteer nonprofit organization into a gravy train that employed too many people and gave themselves large salaries without raising enough money to allow the care center to both fulfill its mission and make payroll. 

Marine Mammal Care Center in Context

It’s been about 33 years since the publishing company, Harcourt Brace Jovanovich, which owned SeaWorld, bought and closed Marineland of the Pacific, which was in Palos Verdes where Terranea Resort now sits [Click here to see a timeline for Marineland and the Marine Mammal Care Center]. With this move, Harcourt sowed seeds that could have bred enmity with local residents, which would last decades. What happened instead was the Marine Mammal Care Center was created to fill the care and educational void left by the old theme park entertainment structures.

Marineland was home to Orky and Corky, two of the most famous orcas on exhibit at any aquarium at the time. Marineland was also home to the first pilot whales (“Bubbles” and “Bimbo”) ever captured for display, as well as dolphins, sea lions, harbor seals, sharks and a variety of other related sea creatures.

In 1986, Harcourt purchased Marineland. For months prior to the closing of the sale, the publishing company said it wouldn’t close Marineland, which was, to the local community, more than an entertainment venue but a center for education and research as well as a place of convalescence for sick and injured marine animals. Six weeks after the sale, Orky and Corky and the rest of Marineland’s animal residents were transported to SeaWorld in San Diego under the cover of night. Adding salt to the wounds, SeaWorld poured cement into the storm drains so that nothing similar to Marineland would open there. 

SeaWorld, at the time, was owned by the textbook publishing giant, Harcourt Brace Jovanovich, which bought up a number of theme parks, including SeaWorld in an effort to diversify its business holdings. 

This set of events would have a number of repercussions, some of which happened early on. According to reports at the time, SeaWorld began incorporating Orky and Corky into its own routines without, reportedly, taking heed to any of the advice the Marineland trainers offered.  

Mar3ine was founded in 1984 by local activists concerned about marine animals. To gain perspective of the Marine Mammal Care Center as an institution and understanding as it evolved through the years, Random Lengths News reached out to former board members of Mar3ine. 

This nonprofit was put together by advocates who were actively concerned about the welfare of the animals at Marineland. To say they were angry about Marineland’s sale to SeaWorld and the subsequent news reports of the animals being mistreated resulting in trainer injuries would be a massive understatement.

Mar3ine convinced Harcourt Brace Jovanovich to financially support what would become the MMCC, which was just a small marine mammal care center at a Dockweiler Beach substation before the facility was built at Fort MacArthur adjacent to Angels Gate Park. John Resich, Dennis Moore, Donald Zumwalt, Parker Stevenson and actress Kirstie Alley were the most significant figures at Mar3ine in the beginning. 

When John Resich and Donald Moore learned of the Marine Mammal Care Center’s current financial troubles, their initial reaction was puzzlement. Resich is a San Pedro-born attorney. Moore, a retired veterinarian, lives in Montana. One of the first questions Resich asked was, “Why is there a full-time veterinarian on staff?”

Resich explained that prior to the fulltime veterinarian joining the care center,  veterinarians from South Shores Pet Clinic (owned by Moore) would doctor the animals as necessary. The creation of protocols on the treatment of various animals allowed the veterinarian to hand off work to volunteers. 

“When they had taken all the animals, everyone was pretty upset,” Resich said. “Marineland was an entertainment [venue], but it was also an educational facility.” 

At the time, Moore asked John Greenwood, a community leader and Los Angeles Unified School District board member representing the 7th District, how much money LAUSD was spending on textbooks with Harcourt Brace Jovanovich. Moore recalled it was $14 or $15 million a year. 

The pair to wrote a letter asking Harcourt Brace Jovanovich to do the right thing and place a new educational marine mammal care facility in San Pedro and pay for its management and operations. Resich described the relationship as a balancing act of raising funds and managing the contributions of Harcourt Brace Jovanovich while resisting the urge to ask for more. Resich noted that Harcourt Brace Jovanovich had expressed a desire to walk away many times but were persuaded to stay.

Resich also lobbied for putting some of the money Mar3ine raised into an endowment. Mar3ine ultimately followed that advice. According to the nonprofit tax-exempt form in 2017, it had about $1 million in publicly traded investments, while Marine Mammal Care Center LA saw its investments decline precipitously over the two years according to tax records Random Lengths News was able to examine.

Marine Mammal Care Center Today

The Marine Mammal Care Center recently installed a new board and a new president. To former insiders, it looked as if Jeff Cozad, the former board president and executive director, had jumped off the train with a few others when the gravy was gone, leaving a financial mess for new president Amber Becerra to clean up.

Becerra admits that the timing of the care center’s announcement about its dire financial straits seemed to come without warning. But the timing and speed of board changes were indicative of just how critical the care center’s crisis is.

Cozad, invited Becerra to join the board. Cozad, a bankruptcy law clerk, was already familiar with Becerra, a bankruptcy attorney, through their professional circles.

“When I joined the board, the board was relatively new and they had been asking for financial information around that time and were assembling it,” Becerra said.

Becerra said she has experience assisting company reorganizations. When she started looking at the financials, which were assembled just before she joined the board, she came to the same determination as Cozad: that the care center had only a few months before it would have to close its doors. 

“Luckily, we have been bolstered by a great deal of community support [following the announcement],” Becerra said. 

“We are going to get there, but as a result of the review of the finances we set the goal of raising a $1 million in the next six months so that we can be very prudent and make sure that come June, the end of our busy season in 2020, we can make sure we can operate for another year through the next busy season of February 2021,” she said.

Becerra suggested that the lack of transparency, particularly after the care center’s 501(c)3 was founded, contributed to the lack of financial warning. But now that the problem is known, Becerra said transparency is a top priority. 

Becerra said she hadn’t spoken with Cozad since he left the board. 

When news broke that the Marine Mammal Care Center was in financial trouble, a few questions came immediately to the fore:

  • What happened to the endowment the care center was supposed to have received from Harcourt Brace Jovanovich?
  • Why is the relationship between the official nonprofit arm of Marine Mammal Care Center and the Marine Mammal Care Center strained?
  • And, what happened operationally with the Marine Mammal Care Center to get to this point?

How the Crisis Began

Three years ago, Harcourt Brace Jovanovich, a textbook publishing giant that invested in other industries to diversify its business holdings, was looking to extricate itself from the care center. Becerra said it informed the care center that it was going to just walk away. This led Cozad to create a new 501(c)3 to fill the void left by that company. 

“Jeff Cozad took that call and stepped up to the plate and made us a 501(c)3 nonprofit,” Becerra said. “But he just wasn’t able to get the funding up to where it needed to be.” 

The budget was $1.6 million when Becerra joined the board. But there were no expenses that she could identify as exorbitant, she said.

“It was just a matter of the funding,” Becerra said. “[Cozad] was very hopeful that it would get there and that he would get community support and funding from local municipalities, but it just didn’t come in.”

Former education manager Jay Bon was employed by the Marine Mammal Care Center. Bon explained that when the care center began to be operated by the new nonprofit, new staff was added to the existing staff. 

Chris Nagle was on the board of Mar3ine with Cozad for seven years before joining him at the Marine Mammal Care Center as treasurer. Nagle’s suspicions were raised when he found out the new nonprofit was named Marine Mammal Care Center Los Angeles — for broader appeal to donors — and fundraisers were being hosted in Marina del Rey.

“I, as the treasurer, never saw any of that money,” Nagle said.  

“I got suspicious at the first fundraiser when the auctioneer was auctioning stuff but there was nobody buying,” Bon recounted. “It turned out it was a guy buying back all of his own stuff and was paying the Marine Mammal Care Center a small percentage of it.”

Bon recounted Cozad’s announcement during a staff meeting in spring 2017. He said that the Marine Mammal Care Center was going to run out of money in two years. When the care center transitioned to the new nonprofit Cozad could only be paid $30,000 while he still had his day job as a law clerk. Cozad increased his salary twice. The first raise was to $48,500 and his final raise was to $82,500. This is supported by the 990 forms the nonprofit filed for 2015 and 2016 and 2017.

In Bon’s recollection, Cozad had more than 20 people on his payroll including family and friends. Indeed, Tamara Meatzie, who is listed as a relative of Cozad, received $11,192 as compensation for research and proofreading. 

Bon described Conzad’s behavior had become erratic over time and noted that as former board president he started to alienate and kick people off the board. Eventually, the Marine Mammal Care Center staff was pared down to hand chosen staff including Alan Colman, a self professed sales and marketing expert, and partner in a company called the Closers Group. 

Random Lengths News retrieved the Marine Mammal Care’s Return of Organization Exempt From Income Tax Form for every year it functioned as an independent nonprofit since October 2015, when the Marine Mammal Care Center became a 501 (c)(3). While these documents are publically available, the returns for the fiscal year 2019 are not.   

On its 2016 return, covering the tax year beginning July 1, 2016 and ending on June 30, 2017, the care center received $3.4 million in revenue that came in the form of contributions and grants. Given the timing of Harcourt Brace Jovanovich dissolving its Florida nonprofit and the founding of the new 501 (c)(3) for the Marine Mammal Care Center, it’s likely that most of that $3.4 million came from Harcourt Brace Jovanovich. In that year, the Marine Mammal Care Center incurred about $1 million in expenses, $700,000 of which were in the form of salaries, other compensation and benefits. This left a balance of $2.4 million that year. 

The statement of expenses, compensation for current officers, directors, trustees and key employees for that year was $103,000 and other salaries and wages were $578,000. Repairs and The maintenance was $87,000, food for animals was $86,000, medical supplies were $30,000 and training (ostensibly for volunteers) was $14,000.   

On the care center’s 2017 Tax Return (covering July 1, 2017 to June 30, 2018), the nonprofit received $763,000 in contributions and grants, $57,000 in program service revenue and 11,706 in investment income. In all, the care center’s revenue that year was $812,000, but was $880,000 in the hole. Expenses that year ballooned to $1.4 million.

Scroll down to the balance sheet of assets, the one thing that sticks out is that the care center started the fiscal year with $2.5 million in assets, but ended the year with $1.5 million in assets. But when examined more carefully, the care center started the year with $1.75 million in investments. By the end of the year, these publicly traded securities were less than $500,000 and another $250,000 was invested in some money market account. The bottom line is the nonprofit was out $1 million by June 30, 2018. Where did that money go?

In the statement of expenses, compensation for current officers, directors, trustees and key employees for that year was $101,000, while salaries and wages were $117,000. More than $900,000 was spent on “other.” Money spent directly on the animals saw modest increases with $124,000 on food, and $48,000 spent on medicine and medical supplies. But right below that is  $74,000 on marketing and another $107,000 for all other expenses. Clearly the “other” category needs to be investigated.

One of the first things Becerra did when she was elevated to board president was trim the annual budget to $1 million.

“What I absolutely won’t mess with is animal care. You can look at our hospital, we run a very tight ship and a very clean operation,” Becerra said.

Next, Becerra and the board laid off six people working in the fundraising, development and community awareness capacity at the care center. 

“Now, 80 percent of every dollar that comes in, goes directly toward taking care of the animals,” Becerra said. “Only 20 percent of that goes toward overhead.”

The care center still has a robust 150-person cadre of volunteers, who are each scheduled four-hour shifts. In 2019, the care center clocked 30,000 volunteer hours. 

“We survive on individual donations and corporate donations,” Becerra said. “We don’t have a lot of guaranteed government funding… Our whole board is now all-volunteer, working night and day to get the Marine Mammal Care Center to financial sustainability. We don’t have this huge budget differential where what’s coming in isn’t matching what is needed to operate.” 

In the mid-90s,  Harcourt Brace Jovanovich set up the Foundation for Marine Animal Husbandry to help fundraise for the care center, but the nonprofit’s effectiveness was hindered due to it being a Florida-based nonprofit, Becerra explained.  

“There was a big disconnect,” Becerra said. “They set up that entity because there were some people wanting to give donations but they would be giving those donations to Harcourt Brace and that didn’t make any sense.”

 Becerra believes the Florida nonprofit didn’t do enough to get the care center into a good place from a nonprofit organization perspective. It wasn’t until the care center split off into its own nonprofit that it started raising money, she said. 

“To be fair, under Jeff’s management, he was able to raise somewhere around $400,000 in individual and corporate donations each year since founding the Marine Mammal Care Center nonprofit,” Becerra said. “But when your budget is $1.6 million, it just doesn’t touch it. Unfortunately, he wasn’t able to secure any government funding other than some state funding in the amount of $200,000, which gets split amongst six facilities in California.”

Becerra noted that they never knew how much funding they would receive from one year to the next and that the amount was based on the number of animals cared for the prior year. 

“Myself and the board worked really diligently with the county and city officials to get a line item in the budget for this resource because it is a county asset and it is a city asset,” Becerra said. “We’re taking in animals that are washing up on our beaches that could be dangerous.” 

Becerra acknowledged that those who are somewhat aware of the care center’s history believe the nonprofit was operating off a huge endowment, which is true for some nonprofits. The former bankruptcy attorney noted that if the care center had a $20 million endowment, it probably would be able to operate off the interest while the $20 million sat in account untouched. 

Becerra noted that the endowment care center did receive was only enough to tie the nonprofit over for a few years until it found other funding. 

“There’s not much of that endowment left,” Becerra said. “It should have been more in my opinion because they did have the ability to give more but they just wanted to be done with it.” 

Becerra noted that no one really knew what would happen to future donations and future financing to sustain the organization. 

“We all can look back and say we should have done this or that, but at the time nobody knew what would transpire,” Becerra said.

The board makeup as it currently stands is made of people who have served three years or less. The majority of the board members have served less than a year and it is comprised of all women with very deep experience in operating nonprofit organizations. 

“We do have a pretty diverse backgrounds of experience on our board,” Becerra said.

The new board is comprised of Liz Schindler Johnson, executive director of the Grandvision Foundation, Liz Hendricks, who has been on the board for about six months and had been a volunteer for Marine Mammal Care Center since 2014, and Donna Dutcher, an attorney who has been on the board for about a year. She has been doing all of their marketing materials. 

“It worked out that when I joined the board two other gentlemen had stepped down because right now where the Marine Mammal Care Center is at, it’s a lot to handle,” Becerra said. “But we now have four super-strong women leading this team and it’s pretty awesome and we get along well.” 

The Marine Mammal Care Center will host an open house from 11 a.m. to 3 p.m. Feb. 16 to celebrate its 10,000th day of operation.

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