No merit badge for whistleblowers

Diane Puhl isn’t one to boast. But when asked how she became a top fundraiser for the Michigan Metro Girl Scout Council, she says, “I was good at it.”

Former co-workers and others involved with the organization agree.

“Diane is the best there is” says Tina M. Larson, of Birmingham, who has been volunteering with the Girl Scouts 35 years.

Puhl says that she owes her success in part to her determination. The other part, she says, is that “I believed in the organization … and my passion and sincerity came across.”

But Puhl’s passion for the Michigan Metro Girl Scout Council — specifically the administration — isn’t what it once was. Last October, the 38-year-old Van Buren Township resident was laid off after working for the organization more than 13 years. The corporate fundraiser was let go — along with 15 other employees — as a result of a budget crunch, according to Girl Scout Council Board President Anne Sherwood.

But Puhl says that she and some co-workers lost their jobs because they alleged financial mismanagement and other problems within the Girl Scouts. In fact, Puhl, who is suing the council for wrongful termination, says that she and a few others helped expose a $868,000 deficit that the organization racked up in 1999, which made headlines last month.

Sherwood says that the deficit is a result of overspending and an inexperienced accounting staff. But this is not the first time that the council has run in the red: the council finished 1997 and 1998 with $490,000 and $100,000 deficits, respectively.

Some critics, including Puhl, say that the board gave free rein to the strong-willed former executive director Penny Bailer. Bailer led the group through 17 years and major expansions, but ultimately the board allowed her to drive the organization into the red with overspending and poor accounting practices, these critics say. The allegations of financial mismanagement are repeated in Puhl’s lawsuit.

Bailer, who cited personal reasons for resigning three months after the deficit was discovered, says, “there was no wrongdoing whatsoever” by her or the board.

Sherwood says that the council is taking steps to make the organization fiscally sound and re-establish its credibility after months of negative press.

But some, including Puhl, say this organization — founded on integrity and trust — needs to come clean about its treatment of former staff and other problems. If it doesn’t, the real cost — financial and otherwise — will be to the thousands of girls the council serves.

Making a difference

In 1987, Puhl joined the Michigan Metro Girl Scout Council staff as a field executive. She learned about the job from a friend who worked there. A research assistant in the University of Michigan’s education department, Puhl was looking for a career that suited her. “I believe in volunteerism and charities,” says Puhl as she sits on a butter-colored sofa at her home during an interview. She says she likes working with kids and thought her psychology degree would come in handy, but she was really sold on the Girl Scout mission.

“I believe in preparing girls to excel … instilling values in girls, making them strong — body, mind and spirit,” says Puhl, who was a Girl Scout briefly in her own youth. “I don’t think girls get that in a lot of other places.”

By 1994, about 1,200 volunteers, including troop leaders and their trainers, were under Puhl. The 5-foot-6 woman with short brown hair and big blue eyes was responsible for recruitment, running and developing programs, training volunteers and other duties.

“Girls are our future,” says Puhl. “Women make up about 52 percent of the work force today and that is going to continue to increase. And Girl Scout programs prepare girls for the job market.”

About 14,000 volunteers donate countless hours to the nonprofit, which today serves 38,000 girls in most of Wayne and Oakland counties and has about 45 paid staff after the layoffs.

Puhl says that she had a good rapport with volunteers because “I would not ask a volunteer to do anything I wasn’t willing to do. If they were stuffing envelopes, I was stuffing envelopes.”

The volunteers also respected Puhl. Julie Smith of White Lake tells how Puhl helped ease the 1994 merger between a reluctant North Oakland County Girl Scout council and the metro council.

“Diane had a positive effect on how a lot of people viewed this,” says Smith. “She smoothed that out with us.”

“She uses resources wisely, knows how to pull a team together for a project and gives you the freedom to make decisions on your own,” says Larson, who has been a Girl Scout volunteer in Michigan and Ohio and worked with Puhl about six years. “She also is very thankful for your time as a volunteer and is quick to point out what a difference what you are doing can make.”

The insider

It wasn’t just the volunteers who recognized Puhl’s strengths. In 1997, management promoted her to director of corporate development, putting her in charge of fundraising from major businesses. According to the documents reviewed by the Metro Times, when Puhl took on the job in 1997, the department raised about $180,000; three years later, Puhl nearly tripled that figure to about $525,000.

“I liked that the more money I raised the more programs we could do for the girls,” she says. “I put pressure on myself to do really well.”

She also knew that fundraising was critical to the nonprofit, which she says struggled financially throughout her employment.

“The staff always talked about overspending, spending that was not in the budget” says Puhl. And when she began raising money for specific programs — and requesting budgets to determine their costs — Puhl became acutely aware of the organization’s money troubles.

“I would get six or seven different budgets” for one program, she says.

Puhl says that the various budgets — which Bailer and others drafted — made it difficult to know the precise cost of programs.

Several staff members complained to one another about the loose budgeting practices, says Puhl. But to change how the organization operated, Puhl says that Bailer would have had to initiate it. “I never saw it change,” she says.

The Bailer years

For 17-and-a-half years, Bailer was the metro council’s executive director, overseeing a major expansion. Even her critics say that she worked tirelessly for the group and did a lot of good. Bailer declined to be interviewed by phone or in person for this article. In an e-mail to the Metro Times, she wrote that she could not comment on Puhl’s lawsuit or personnel matters; she declined to respond to a number of other questions as well. But she did provide an overview of how the organization grew under her leadership.

During her tenure, Bailer — who started out with the organization driving buses of inner-city girls to camp after prodding scout officials to do more in Detroit — says that the number of girls served doubled, as did the number of volunteers. Grant funding increased from $15,000 to $1.6 million and the total budget went from $2.5 million to $7.5 million, winning the Crain’s Detroit Business Award for the Best Managed Non-Profit in 1993, she says. “We established many innovative programs never attempted before in Girl Scouting in any part of the country and were extremely successful, especially in areas of teen-pregnancy prevention and diversity education,” she wrote, describing her former position as the “world’s greatest job.”

Bailer did more than just expand the Metro Girl Scouts Council to become the fourth-largest in the nation. The native Georgian, who left the Girl Scouts last year at age 59 to be with her family in New York, has a list of other impressive accomplishments. She helped found the Golightly Education Center, an alternative Detroit public school, served on the school board four years in the early 1990s and received the United Way’s Executive of the Year Award in 1997. Meanwhile she raised two children with her now-deceased husband Kermit, former city corporation counsel under Mayor Coleman Young.

But some former employees also describe Bailer as an “aggressive” leader who instilled fear in staff.

“People’s careers were on the line,” says a staffer who left about five years ago and asked not to be named for fear of reprisal. “It wasn’t just your job, it was your reputation in the nonprofit world.”

“I think people were afraid of Penny,” says a staffer who was laid off last fall and asked not to be identified.

Some learned — the hard way — that Bailer did not like to be criticized. In 1993, Bailer told the staff to enroll Detroit Public School students into the Girl Scouts to raise membership. What bothered staff about this is that though the girls were registered as year-round Girl Scouts, they did not benefit from any programs other than the one-day outing.

“We paid for buses and for lunch and admission fees and told the girls they were Girl Scouts and after that day we never saw them again,” says Linda Leclerc, who trained Girl Scout volunteers before she was laid off last fall.

Leclerc and other former staff wrote Bailer a letter complaining about the mass recruitment. The letter said that “the true life of Girl Scouting is to teach girls critical life skills, decision-making, self-esteem and career development … it is difficult to believe that these limited-duration programs are truly making a significant impact on the lives of girls.”

Leclerc says that Bailer lectured those who wrote the letter for three hours. Bailer also downgraded several workers’ performance reviews and at least one worker was put on probation, say former staff.

A similar mass outreach in 1999 was also controversial among staff, although one official who asked not to be named said that a substantial number of those girls did become involved in scouting through the effort.

Bailer did not respond to questions about boosting membership through mass recruitment.

Budget questions

In the spring of 1999, says Puhl, a volunteer committee began asking questions about the budget. The scout council has volunteer committees for camping, communications, fundraising, and cookie, calendar and nut sales, among other activities. The fund development committee, which helps raise money for the organization, wanted to know the specific cost of each program. But Puhl and her supervisor Lynne Aldrich, former deputy executive director of fundraising, were unable to provide the information because they had difficulty getting it themselves.

“How is the budget done? Who does it? What are the specific costs of programs? Those kinds of questions were asked,” says Puhl.

Aldrich tried to get answers, but didn’t get far, says Puhl.

Aldrich told the Metro Times that she could not comment “because of a legal agreement entered into with the Michigan Metro Girl Scout Council. I am unable to disclose the details of that agreement or why I resigned.”

By the fall of 1999, Puhl says the fund development committee “reached the boiling point” and said they were going to go to Bailer for answers.

Shortly after, working conditions for Puhl and Aldrich became unbearable, according to Puhl’s lawsuit.

“I was left out of meetings related to my job. I couldn’t get budget information related to my job. People had gone through my files at night when I was not there,” she claims. “It appeared that I was being set up to look insubordinate. I was subjected to a year of hell.”

Puhl says that Aldrich was under so much stress that she lost about 30 pounds in a month.

But before Aldrich resigned, she, Puhl and another employee sent a letter to the Girl Scout board of directors in December 1999, accusing Bailer of creating a hostile work environment. The board did not respond.

In February 2000, they sent another letter to the board accusing Bailer of “financial mismanagement” and abuse of her power, and asking the board to investigate, according to Puhl’s lawsuit. This time the board listened.

The investigation

In March, the board hired attorney Todd Shoudy from the firm Dykema Gossett to interview staffers, who were promised that they would not suffer repercussions for being candid. Shoudy told the Metro Times that he could not comment on the confidential investigation, which led to an in-depth financial audit.

The audit findings were announced at the May 2000 annual meeting: the council was $867,000 in the hole. In August, Bailer resigned. Bailer told the Metro Times via an e-mail that she had been planning since 1997 to leave the Girl Scouts and move “to New York to be near my children as they get their careers and someday their families started here.” Former staff say that the board announced that Bailer resigned. But some say they were privately told that the board voted Bailer out.

Elaine Maylen worked in sales, communications and other areas of the council for 14 years under Bailer before she was terminated last month without notice. Maylen informed the Metro Times via e-mail that Bailer told her that “the board felt that the combination of recent personnel issues” and the “deficit were too much for the board to overlook. Ms. Bailer’s sources on the board (she did not name them) told her that if Ms. Bailer had been faced with just one of these issues, she probably would not have lost her job.”

And how did the scouts end up so far in the red?

“We spent more than we brought in,” Sherwood says. “It was not one particular thing.”

Former employees say Bailer sometimes spent money frivolously.

“We all had cell phones,” says Laurita Faison, the former program manager, adding she actually needed one, “maybe once a month. Administrative staff that never left the office had cell phones.”

Thousands of dollars were spent to mass-recruit girls to boost membership — money the council did not have, say several former staff. Many staffers cited the costly move from their previous offices in the Michigan Mutual Building on Adams to the Fisher Building where the Girl Scouts signed a 10-year lease. According to financial records the Metro Times reviewed, the Girl Scouts paid $374,000 in 1998 at their old location compared to $392,000 at the Fisher Building in 1999, an increase of $18,000 or about 5 percent.

But some staffers saw that as a problem.

“We knew we didn’t have money to move into the Fisher,” says Faison. “I know this because we could not pay rent where we were. The landlord would tell us our rent was late.”

Sherwood denies that the Girls Scouts could not pay the rent at Michigan Mutual, but says that the move to the Fisher Building did contribute to the deficit.

“It certainly increased expenses,” says Sherwood, “but it is just one of our expenses.”

She says the move was necessary because “we needed more visibility, we needed a place for our retail shop … and at the time we made that decision it seemed like we could handle that additional expense.”

Some former staff and volunteers want to know how the financial problems escaped the board of directors’ notice.

According to tax records, the group was about $490,000 in debt in 1997 and about $100,000 in debt in 1998.

When asked what the board did to address the 1997 and 1998 deficits, Sherwood told the Metro Times that “I couldn’t answer off the top of my head.”

Asked later via e-mail what the board did to address the 1999 deficit and make the organization financially stable, Sherwood wrote back, “The Board has already dealt with the 1999 deficit. It is history.”

She also wrote that to ensure financial stability, the board “hired a new chief financial officer, trained staff responsible for accounting functions, hired an information-systems officer to upgrade our computer network and accounting software, developed a three-year strategic plan, reduced staff and reorganized job responsibilities and identified resources required to implement the plan, approved a 2001 budget with management accountability and engaged an executive search firm to hire a new CEO.”

Some involved with the Girl Scouts say that the board is taking steps to put the organization back on solid financial ground. But some former staff say they wish the board acted sooner — before many jobs were lost.

“I can’t tell you how many times in the last 11 years I have heard many staff and volunteers alike utter the words, ‘Why doesn’t the board do something about Penny?’” wrote Leclerc in a letter to Sherwood last year shortly before the board called the investigation.

The cuts fall

In October 2000, Girl Scouts management — with the board’s approval — laid off 14 full-time staff and two part-time workers — including Puhl and a few others who came forward about the financial troubles.

“We made them look at that, and the result was we lost our jobs,” says Puhl, who filed a lawsuit against the organization in January.

“I think there was a vendetta against those who blew the whistle,” says Leclerc, who headed adult development and trained volunteers prior to being laid off. “I did talk to Shoudy and was told there would be no retaliation. I don’t feel that was a true statement. I think by speaking up I was one of those who lost my job.”

Leclerc says she considered suing the Girl Scouts, but decided that it was not how she wanted to spend her time or money.

Of at least two other employees who spoke to Shoudy, one lost her job but was recently rehired.

Puhl, who has been looking for work since she was let go last fall, shakes her head in frustration. She says it does not make sense for the Girl Scouts to lay off one of their best fundraisers when they are trying to stay financially afloat.

“What really bums me out is we finally were turning the corner in fundraising,” says Puhl. “This year I projected we could earn between $500,000 and $1 million from corporations based on the contacts I made and all the corporate research I did.”

According to documents the Metro Times reviewed, the council’s goal for corporate fundraising this year is almost $200,000 less than what Puhl raised last year.

“Now, I feel they are taking a step backward,” says Puhl. “It drives me crazy, all that hard work I did the last three years is out the window.”

Some former staff members say that others who contributed to the personnel problems and knew about the money troubles are still on staff.

“I think there are people still there who knew what was going on, and they went along with it,” says one of the former staff members, who asked not to be identified. Others made similar statements.

But some of those let go had no contact with Shoudy and no knowledge of the financial problems.

Helen Bejide worked for the council for 17 years and for Girl Scout councils around the world for 32 years. She headed volunteer services until about a month before the layoffs when she was demoted to switchboard operator, though her salary remained the same.

“They explained to us that we were not going to lose our jobs,” she says. But on Oct. 31, Bejide was let go.

Bejide and others had just minutes to gather their belongings before a security guard escorted them out of the building; they were given no severance and their health benefits ended at midnight.

“It wasn’t just the firing,” she says. “but the dirty-dog way they did it. Ask them to say the Girl Scout promise. I bet you they can’t.”

Fallout

As the Girl Scout troubles unfolded in the press the past several months, the board and management feared that the organization’s reputation would suffer. But most volunteers are sticking by the Girl Scouts, says Joan Czarnota, who has been a volunteer troop leader and trainer 24 years.

“We realized there were a lot of things that happened that we didn’t like, but we didn’t know until it was over,” says Czarnota. “The only thing we can do is put it behind us for the good of the girls,” she says.

Some volunteers who relied on the former employees for training and other services are less forgiving. At two meetings in November and January, volunteers questioned the board about the deficit, and layoffs.

“It’s interesting that the people laid off were those who brought about the investigation,” said one woman.

Another asked, “Why weren’t those with higher wages laid off instead of middle management?”

“It would not have served the Girl Scouts to lay off top people,” said Sherwood. “It’s the top people who are making things happen in the organization.”

Moans resounded in the room — several times. Others questioned whether the cookie price increase from $3 to $3.50 would be used to pay the deficit. The answer was no.

Would the sale of two of the four Girl Scout camps be used to pay the deficit was another question. Again, Sherwood said no. She said at a recent press conference regarding the camp sales that the money would go toward improving the two remaining camps.

Sherwood also told the Metro Times that she was not aware of the deficit negatively affecting the programs provided the thousands of girls they serve. But according to a staff member, who asked not to be identified for fear of reprisal, girls will pay higher registration fees this year for most activities. In previous years, the council subsidized some programs, allowing girls to pay low fees or none at all. This year, this staff member says that the council is not subsidizing the majority of activities.

The most dramatic increase is the horseback-riding camp, which nearly doubled in cost this year — some five-day trips are $575, compared to $290 last year according to the brochures for the two years. Other camping trips have not increased or have gone up only $10 or $15.

Puhl says that it isn’t fair that the girls should have to pay for management’s mistakes. But they also may pay in other ways, says troop leader Ed Larsen, who has been involved with the Girl Scouts six years and criticized the board at a January membership meeting.

“You give the Girl Scouts a bad name,” shouted Larsen, who was referring to the way staff was laid off. “If you don’t keep in mind our values, we lose credibility.”

Puhl, whose lawsuit is before Wayne County Circuit Court Judge Amy Hathaway, agrees. She hopes that her suit, which is in the beginning stages, will send a message to management, and to the thousands of girls they serve.

“I’m confident that justice will prevail in this and they will learn that it may not always be an easy choice to do the right thing, but it’s the right choice.”