- The Washington Times - Thursday, April 20, 2000

Sammy Sosa has learned the hard way that when it comes to pro athletes, too much charity is never enough.

The Chicago Cubs slugger, one of the most popular players in baseball, two years ago donated a $2.7 million building in his native Dominican Republic to house a much-needed children's medical clinic. Sosa's gift, which came just months before the country was rocked by Hurricane George, helped him win the Roberto Clemente Man of the Year Award.

But his Sammy Sosa Foundation, a charitable organization started in 1998, is now under serious fire after charges of mismanagement, financial misappropriation, theft and nepotism.

One of the foundation's co-founders and its secretary, Arturo Sandoval, recently told Fortune magazine and then the IRS about developments within the organization. Sandoval reported that relief supplies are wasting away in a Miami warehouse, two of Sosa's sisters run businesses out of the clinic building without paying any rent, and the foundation is near bankruptcy. Sandoval also claims Sosa, who makes about $10 million per year with the Cubs plus endorsements, has yet to make a meaningful cash grant to the foundation.

Sosa's camp is trying to lay low and regroup. Experts in athlete-led charitable foundations say Sosa's troubles could very well lead to a chilling effect in an already embattled area.

"Unfortunately, black eyes in this sort of thing are so easy to get and so difficult to lose," said J.T. "Dock" Houk, founder and president of the National Heritage Foundation. The Falls Church, Va.-based organization runs charitable foundations for dozens of athletes, including the Seattle Mariners' Edgar Martinez and NBA Hall of Famer Rick Barry.

"All pro athletes should have a [charitable] foundation, I think," Houk said. "Their fame can be such an instrument to do good work. But it's important to remember that people don't ever need much of an excuse to come down on charities.

"These kinds of things can be so embarrassing, which is why you need to be so careful and hire the right people."

But that's where it often gets extremely tricky for many pro athletes and their charities. Most player agents have a law degree and are highly skilled in pro sports finance and labor law. They also know the power of marketing and understand how charitable endeavors can greatly help intended beneficiaries as well as the public image of the athletes.

The economics of nonprofit charities, however, is much different. Most agents are not at all versed in the often-Byzantine accounting regulations that surround 501(c)3 organizations, the most common classification for nonprofit, tax-exempt charities.

"This is a business, a nonprofit, but still a very serious business," said Eric White, executive director of the Washington-based Darrell Green Youth Life Foundation. "We have the very same challenges in hiring qualified people and getting all of our operations organized that for-profit companies do. Often, we need the most skilled people because of the scrutiny and the spotlight that is on us."

Several years ago the Green Foundation, started and chaired by the Washington Redskins cornerback, went through a situation somewhat similar to Sosa's. Green, who has enjoyed a near-flawless reputation in Washington since his arrival with the Redskins in 1983, endured embarrassing revelations about his organization. It was discovered that for years his foundation failed to submit IRS tax returns or register in local jurisdictions to solicit donations.

The foundation has since recovered. It hired a professional foundation director in White, registered to solicit donations and started a training initiative to help other athletes and community activists form charitable foundations.

Problems with foundations run by athletes are almost as old as the foundations themselves. Many remain unregistered and, because they are often small compared with charitable giants like the YMCA or United Way, continue to fly under the radar of the IRS and the National Charities Information Bureau, the chief watchdog organization of charitable organizations.

Even Michael Jordan, with as close to an untouchable public persona as any modern athlete, closed down a foundation in his name several years ago after repeated complaints that too much money was being spent on overhead. The NCIB recommends that any charity spend at least 60 percent of its budget on its intended work. Any percentage less than that gives critics an opportunity to attack the work and mission of a foundation.

The accusations against the much-beloved Sosa open a new level of criticism.

"It's such a shame about Sosa. You just hate to see them get into trouble. As soon as we heard there was a problem in the Dominican, Edgar Martinez sent down $30,000," Houk said. "So many of these guys just don't understand that with just some more organization and professional management, their charities could do much more work."

Sosa and his advisers firmly deny Sandoval's charges but have retained a California law firm to lead an internal investigation of the foundation's finances.

"These are some reasonably serious charges being levied against him and he's hired outside counsel to look at them," said Adam Katz, Sosa's agent. "We are taking time to regroup and evaluate the situation, but beyond that I can't swing at every pitch thrown against Sammy."

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