Really, I mean, really, really – It was the money stupid !
Lets just recap – the Whittemore Peterson Institute is a non profit organisation, its funds have either come from public donation, large individual donations, or Government Grant; the only public records of large single donations are those from the Whittemore family via the Whittemore Family Trust. From the creation of the WPI its president has been Annette Whittemore who has also held the unpaid position of CEO; the Board of WPI has had up to five members but on occasion that has been down to just two, with Annette Whittemore the only constant presence. All other Board members have been close associates of the Whittemore family. I’ve written previously about how this lack of breadth of Board representation is problematic in that it exposes both the members and the organisation to concerns about lack of broad perspective and issues of conflict of interest. Such concerns now appear substantiated because Annette Whittmore along with her husband has been named in a Lawsuit that implicates the Whittemores in a multimillion dollar, multifaceted fraud to which the WPI itself is linked.
You think it couldn’t get worse ? Think again
The most interesting aspect of the claims against Harvey Whittemore is that not merely has he defrauded his business partners, but that he has acknowledged this as fact and that the case now only comes to Court because he has failed to fully recompense those he has defrauded despite having previously promised to do so. However the Whittemores are contesting the allegations, describing them as entirely false.
It is beyond the scope of this blog to cover all the intricacies of the 41 page legal suit, in simple terms however the complaint is that: Harvey Whittemore, in part, and in cooperation with Annette Whittemore and up to ten as yet unidentified individuals and ten as yet unidentified corporations plus a limited partnership called The Lakeshore House Limited, is alleged to have defrauded his partners in three companies, Wingfield Nevada Holdings Company LLC (Wingfield), Tuffy Ranch Properties LLC and The Foothills at Wingfield LLC.
The Document of Complaint lodged with the Court provides an impressive depth of detail and scope of the alleged misconduct by the Defendants, an item of particular interest to M.E/CFS affected people is a mention of Redlabs, the company that marketed the XMRV test licensed by WPI. Redlabs is not recorded as being a particular focus of any fraudulent activity but the Plaintiffs do claim that in 2004 Harvey and Annette Whittemore, via their The Lakeshore House Limited partnership sold 50% of several businesses including Redlabs to one of two companies owned by Thomas Seeno. The remaining interests in these companies held by The Lakeshore House Limited partnership together with Mr Seeno’s previously purchased interests were then, in 2005, transferred to either the Wingfield Nevada Holdings Company LLC or The Foothills at Wingfield LLC. From 2005 Redlabs was therefore wholly owned by Wingfield, its registration in the name of Harvey Whittemore being in accord with Whittemore being the manager (but not sole owner) of Wingfield . An important aspect of the complaint against Harvey Whittemore is that he withheld information from his business partners, it is therefore appropriate to ask, whether his partners were aware of the License agreement with the WPI for the XMRV tests, whether they considered sale of the non FDA approved tests to be ethical business and whether they considered the $226,652 paid to the WPI in licensing fees in 2010, to be justified ? Further questions will no doubt be asked by the Plaintiffs in respect of how the operational activities of the Redlabs (operating as VIPdx) commercial business was seemingly transferred to the benefit of the WPI, via creation of UNEVX as a for profit corporation owned by the WPI.
Don’t Mix Business with Charity
Aside from the ‘for profit’ Redlabs/VIPdx company, the Document of Complaint against Whittemore and others, lists amongst numerous charges of alleged fraud, a number of incidences which directly involve the Whittemore Peterson Institute. These are:
- Diversion and donations of assets and equipment from a Wingfield called Wild West Sound Company Inc. (renamed – Western Electronics Inc.) to (amongst others) the WPI.
- Diversion of funds disguised as donations to WPI.
- Improper and abusive use of Wingfield personnel for WPI purposes.
- Harvey Whittemore caused aircraft leasing costs of over $2 million to accrue to Wingfield accounts in support of private use made by him and Annette Whittemore and others, including travel related to WPI activities which it is claimed alone amounts to $346,546 remains unreimbursed.
- Annette and Harvey Whittemore directed employees of Wingfield to work on WPI at Wingfield’s expense, it is specifically alleged that Annette Whittemore represented herself as having management authority at Wingfield.
- A 'PR' Agency retained by Wingfield was directed to do work for the WPI without any recompense being paid to Wingfield. It I claimed that Wingfield’s Director of Marketing Angelina Wyss-Gordon [Angelina Gordon] who at the same time was the WPI Director of Marketing and Events http://www.wpinstitute.org/about/about_execboard.html, instructed the Agency that all work carried for WPI should be charged to Wingfield.
- Harvey Whittemore permitted Annette Whittemore to charge compensation and other employee expenses of the WPI to Wingfield.
- Specifically Annette Whittemore caused 75% of Dr J.Mikovits’ salary ($185k) to be charged to Wingfield as was the $42,000 relocation expenses paid to Dr Mikovits.
- Currently unnumerated expenses of other WPI staff and consultants were paid for by Wingfield.
- A Wingfield owned company, the Redhawk Golf Course and Entertainment facility was used at the direction of Harvey and Annette Whittemore for fundraising events for the WPI for which fees were not paid, the costs are claimed to exceed $157,000.
- Harvey Whittemore solicited grants and donations from businesses dealing with Wingfield, which were of benefit to the WPI, but which were undeclared to the owners of Wingfield, to their detriment.
Should any of these claims be true then huge embarrassment would be attached to the WPI, and by association, the wider cause of M.E/CFS research.
The Plaintiffs are seeking a court hearing in front of jury, in addition copies of the documents are with the
police and it seems highly likely that criminal investigations will now follow, such investigation would necessarily involve the WPI as an institution. While apportionment of criminal blame or civil liability remain to be properly tested, it is abundantly clear that the management structure of the WPI leaves it profoundly exposed, and there must be serious questions about it’s long term future despite it having been recipient of millions of dollars in public funding in the last 4 years. The positions of both Annette Whittemore and Angelina Wyss-Gordon are to be tested in public if a trial goes ahead, but it would seem likely that all those who have served on the WPI board since WPI was first set up will be called upon to give evidence to investigatory authorities – and those may be multiple. The position of Carli West Kinne , current Vice President and long term General Council at WPI would seem to be potentially quite difficult given her listing as Registered Agent for many Whittemore ventures, including Wingfield, as well as the Whittemore Family Trust. Nevada
Other investigatory authorities seem likely to have a great interest in the Wingfield case, some of what is alleged would seem to have Federal relevance, and in respect of the WPI there are aspects which are likely of concern to the IRS in respect of WPI’s annual returns. For example should the WPI have declared costs for fundraising or airfares, and those costs have not been paid then a false declaration has been made. And questions then arise as to what has happened to the unaccounted funds. The role of Federal Grant giving agencies must also be in question – was there due diligence to ensure that WPI was fit and proper recipient ?
XMRV was a disastrous association for M.E/CFS in terms of research credibility – the associated publicity has in fact been played well by a few effective advocacy organisations and the harm that could have resulted has been largely mitigated. The possible implosion of the WPI, a consequent association with illegality and with it a loss of credibility for M.E/CFS fundraising and advocacy would be a further blow that M.E/CFS affected people should not have to endure. How organisations are structured matters – good intentions are not enough, nor are smiling lobbyists with promises of donations beyond dreams the stuff of long term research stability. M.E/CFS affected people and their advocacy organisations must ensure that in future support is only given where sound institutional practices are demonstrated and guaranteed by external measures.