The Wizard of Wyoming?

Plenty of money was generated at Gerry Spence’s Trial Lawyers College last weekend at an auction of Spence memorabilia. A used leather jacket of Spence’s, replete with a hole in the pocket, went for more than $10,000. A roll-top desk went for $3,000.There were photos, books and art work. I left midway through the auction and already for $38,000 had been generated. All proceeds went to the college, we are told.

But what does that mean?

The Trial Lawyer’s College is a 501c(3) tax-exempt organization. Its mission is the education of trial lawyers. The facility sits on the land of what was once a former cattle ranch owned by Spence. The vast bulk of the land is now a wildlife preserve. But the buildings and the grounds surrounding it belong to someone. Who?

The land and buildings are apparently owned by the Spence Foundation. IRS records reflect that the land had a so-called book value of $2.7 million in 2007; the buildings and improvements had a book value of almost $1.5 million. Gerry Spence and his son are co-trustees; so is the brand new president of the Trial Lawyers College.

In 2007, the most recent year for which reports are available, the Spence Foundation received rents of $242,580. During that same year, the foundation paid out about $233,000 in contributions made to the Trial Lawyers College. Query: Did the college pay the foundation rent and then receive the funds back as contributions? It is hard to tell from the IRS Form 990s submitted by both entities: The college does not carry a line item reflecting the $233,000 contribution; neither does the college carry a line item reflecting rent paid.

The Trial Lawyers College leases the ranch from the Spence Foundation. Under the terms of the lease, the college pays for all of the ranch’s upkeep costs. Any improvements done to the ranch become property of the foundation when and if the lease is not renewed. During the past 18 months, more than $200,000 of improvements have apparently been done at the facility, all paid for by the college, but belonging to the foundation. Were indpendent contractors hired to do the work? If the foundation does not renew the lease, it enjoys a windfall. Isn’t that self-dealing?

The boards of the college and the foundation are interlocking. Several years ago Senator Chuck Grassley of Iowa raised questions about shenanigans engaged in by the wealthy. Grassley cited Spence and the college as an example. Nothing came of Grassley’s fulminations, but, at about that time, Spence named one of the Trial Lawyers College’s star students to the board of the family foundation. This past weekend that same student, Jude Basile, was named president of the college. Recently, Spence’s wife, Imaging, a non-lawyer, was named to the board of the Trial Lawyers College. Incest anyone?

There has been a quiet blood-letting on the board of the Trial Lawyers College for the past several years. Garvin Isaacs and Charles Abourezk, two lawyers with national reputations long before they stepped foot on the ranch, are no longer present. John Nolte, one of the nation’s leading psychodramatists, has also departed. There are rumblings that all these departures were due in part to disagreements with how the various boards managing the property counted beans. Earlier this year, the college’s executive director of nine years, Joanne Garcia Colson left, reportedly with a fat severance package.

The current board of the Trial Lawyers College is chock full of people who’ve drank the Kool Aid, and decided it is good, very good. One lawyer boasts that his firm is comprised of nothing but graduates of the college. It almost seems as if folks are required to draft a testimonial pledge before taking a seat at the council table. There’s a secret oath, too: "Lemme be a lemming" repeated three times in rapid succession.

The college is hoping to build a library in Spence’s honor at the ranch at an estimated cost of some $2 million. The library will apparently be property of the foundation. Do donors know this? Do they care? Why not a library at a public institution, such as the University of Wyoming's School of Law?

Both the Spence Foundation and the Trial Lawyers College are well managed. In 2007, the foundation listed assets and a fund balance of $4.2 million, but cash on hand of just $15,000; the college ended the year with savings and temporary cash investments of $1.8 million. It looks suspicious, like one entity spread across two sets of books.

These numbers and the relationship between the foundation and college startled me. Interlocking boards. The same accounting firm handling both sets of books. The new president of the college serving on the board of the family foundation. Independent voices driven from the board. This combined with the fact that Spence and his wife maintain a private dwelling on the ranch create the suspicion that the corporate veils separating these entities are transparent; sitting behind these veils is one very satisfied man.

Imagine holding a garage sale of castaways and using the money generated to put a roof over your head. Imagine further that’s all tax free. Imagine, if you will, that it was all legal. The Wizard of Oz should be Lilliputian green with envy.

Spence is a great lawyer. He can cast stones at corporations and big government with the best of them. But wealth and power corrupt individuals, too. The ancients knew this, and warned against plutocracy. It saddens me to think of Spence as a plutocrat. I hope I have misread these tax documents and their meaning.

Comments: (19)

  • I just can't find it in my heart to characterize t...
    I just can't find it in my heart to characterize tax evasion as "corruption," even if carried out illegally, let alone tax avoidance carried out legally through legal wizardry. If Spence's wealth allows him to hire legal advice to facilitate measures we wish were also available to the less well off, more power to him. Where is the hypocrisy and where is the inconsistency in someone like Spence who casts stones at big government trying to avoid sending money to big government?
    That said, this Trial Lawyer College thing does seem awful cultish.
    Posted on August 27, 2009 at 5:04 am by John Kindley
  • On the other hand, personally benefiting (e.g. by ...
    On the other hand, personally benefiting (e.g. by maintaining a private dwelling) from what donors perceive as charitable contributions can be morally suspect.
    Posted on August 27, 2009 at 5:11 am by John Kindley
  • John: You assume that the conduct is legal simply ...
    John: You assume that the conduct is legal simply because it is ongoing. I'd advise you to reconsider your premise. How were the transactions between the College and Foundation conducted at arm's length when the same people were negotiating on either side of the deal?
    It's like playing a game of chess against yourself: Even when you lose, you win!
    Posted on August 27, 2009 at 6:34 am by Mike
  • Hi Norm - I don't think that Joane's severance p...
    Hi Norm - I don't think that Joane's severance package, if she was given one, should be lumped in with the bulk of this post. Doing so makes it look like the payment of a severance, which is normal and appropriate at the end of a long-term employment, was wrong or somehow related to financial management decisions that she probably had very little control over.
    My guess is that whatever she was paid was well-deserved and is unrelated to any of the other issues you wrote about. Her presence in the college was important to many students and staff, but she was, ultimately, an employee and not "management." She reported to the board and was under their direction and control.
    As to your blog in general, I am so glad that you are blogging again as I love to read what you write.
    Fondly and with best wishes,
    Posted on August 27, 2009 at 10:48 am by Lilys McCoy
  • L
    Great to hear from you. Not sure what Joane's g...
    Great to hear from you. Not sure what Joane's gig was all about. Perhaps you are right.
    Thanks for reading.
    Posted on August 27, 2009 at 10:54 am by Norm Pattis
  • Hi again Norm -
    I figured that you had just men...
    Hi again Norm -
    I figured that you had just mentioned Joane's situation in passing, but these things can "go viral" and get out of hand quickly, as you well know.
    Posted on August 27, 2009 at 12:06 pm by Lilys McCoy
  • Is it normal to pay severance to someone who resig...
    Is it normal to pay severance to someone who resigns?
    I have been put off by the fundraising at TLC events - it is one of the reasons I no longer attend them.
    Posted on August 27, 2009 at 3:45 pm by Anonymous
  • You hit the nail on the head Norm. TLC is a plutoc...
    You hit the nail on the head Norm. TLC is a plutocracy. Spence himself could easily finance the college but instead, he has built it on the backs of the little people. Just look at the board, nearly all white males, most of whom are wealthy. Only 2 minorities, and a single public defender. I have heard from the mouths of board members themselves that Spence isn't even the top donor to his own college! That honor goes to a selfless trial lawyer from the Northwest. I have even heard it said that Josh Karton has given more money to TLC than Gerry Spence. Why doesn't the college publish how much each board member has given in financial support? The lack of transparency breeds suspicion and distrust.
    The other problem with TLC, it is becoming a rich white man's club. I have been to a number of programs and the number of women and minorities both on staff and who attend as students is incredibly small. May be due to how they are treated. Or maybe because Spence, the plutocrat, doesn't want them at the table.
    Posted on August 27, 2009 at 6:21 pm by Anonymous
  • I have always had my suspicions about the finances...
    I have always had my suspicions about the finances of this organization. Everytime I have heard someone get up at a regional and say "Gerry gave the ranch to TLC" my gut told me it was a lie. Just another rich man building his empire with other people's money. Someone once said "The deeper the pocket the shorter the arms."
    TLC is a cult, plain and simple. They get you in, break you down with psychodrama, make you feel wanted, then ask you for money, tell you you need to come to more and more programs to "get it", make you pay more for regionals each year and then ask you for more money at every one. Money, money, money. Come on Gerry, write a check and be done with it. Fund the college, or ask your well healed board members to do it. Didn't Jude Basile just settle a case for several million dollars? And didn't Rex Parris just get a $370 million verdict? Why are you asking us, the true "people's lawyers" for money? Hell, you even charged us to attend your birthday party. I don't have a mansion in Montecito AND an estate in Jackson.
    It's time for all of us to stop drinking the cool aid!
    Posted on August 27, 2009 at 7:33 pm by Anonymous
  • Très intéressant, Norm. Obviously a typo but you s...
    Très intéressant, Norm. Obviously a typo but you spelled my name wrong.
    Posted on August 28, 2009 at 2:37 am by John Nolte
  • John:
    You're not Notle, eh? Good to hear from you...
    You're not Notle, eh? Good to hear from you. Corrected.
    Posted on August 28, 2009 at 3:26 am by Norm Pattis
  • Behind every great meal (or Kool Aid in this case)...
    Behind every great meal (or Kool Aid in this case) is a very messy kitchen.
    Maybe someday I will be ready for another drink; until then, I'm on the wagon....
    Posted on August 28, 2009 at 10:55 am by bread man
  • Dear Norm:
    Gerry gives his time, his energy, and ...
    Dear Norm:
    Gerry gives his time, his energy, and his knowledge. And how he has structured his foundation and school is his business. I am just happy to have gotten invited on the ride.
    Now, a lot of people turn TLC into their family, specifically they turn Gerry into daddy. So if daddy doesn't give them enough attention or doesn't choose them to run the college they get all bent out of shape.
    I've never given a dime to the college and it has never gotten in the way of our friendship. And if I ask Gerry for help on a trial he is always right there, he has never turned me away. Some of my greatest opening statements he helped me write.
    And Jude is a good choice to head the school. He's not my favorite person in the world, but his love of the school and his dedication to the students is very real. He has been involved with the place for fifteen years - since the beginning. Being director is a boring, thankless task, and if he wants it we should be grateful. I wouldn't want it for the world. Too many problems.
    If anybody drank Kool Aid on the Ranch it is the few people that have become psychodrama slaves - they have to psychodrama their every fart. But if you get past the psychodrama slaves you will find some amazing people teaching there.
    As far as being a Tax Shelter - well you have to make money to shelter it. I saw the books a few years back and the the place is a money pit - always has been and always will be. Expensive to operate, expensive to maintain. And I am sure that at the end of the day Gerry will leave a large portion of his wealth to the school. But some think that asking for money is some kind of sin. Give if you want, don't give if you don't want to. I choose not to give. I have my reasons, you have yours.
    Why the two foundations? Well if the school owned the land the board would do the sane thing and sell it and move the school to cheaper and better location. That isn't what Gerry wants. So the Spence foundation owns the land and the school gets to use it. And if the school is taken over by a bunch of Kool Aid drinking lunatics what better way for the Spence family to step in and say enough. Two foundations is real good idea given that psychodrama seems to attract a certain number of desperate people that convince themselves that Moreno and psychodrama are the solution to all their problems.
    As far as building Gerry a library? Its a great idea. It helps ensure that future students that want to study his rhetoric will have a place and environment to do it in. For that I would give them money.
    I'll leave you with a little story. I was at the Fieger trial. And there was a lawyer there that had been to TLC and had become disenchanted with the school and wrote terrible things about Gerry. When Gerry saw him there he openly embraced him and told him he loved him. He truly believes in the power of love. I don't. But I admire him for his compassion.
    TLC is like law school. Very glad I went, but why the hell would anyone want to go back.
    And the only people that are drinking Kool Aid at the school are the ones that brought it with them.
    David Clark
    Posted on August 28, 2009 at 4:25 pm by David Clark
  • Good points all. I almost recognized that Feiger l...
    Good points all. I almost recognized that Feiger lawyer but I don't recall having written terrible things about Spence; critical, yes. In any case, wouldn't you agree that the underlying relationship between the foundation and college should be transparent. Many people think that the ranch has been given to the college; these folks give unconditionally. To find out that there gifts can in effect be converted at will to a purpose other than what they intended is troubling.
    As you know from our conversation a year or so ago, I confess paternal issues. I've undertaken a Freudian analysis to explore them. Your comments to me helped me see that need and I remain grateful to you. So thank you, David.
    Posted on August 28, 2009 at 4:43 pm by Norm Pattis
  • This has been an interesting post. Someone pasted...
    This has been an interesting post. Someone pasted this to the TLC listserve and I expect a shitstorm in response.
    I believe "paternal issues" are behind much of the craziness that accompanies TLC, including the financial ones. And there often is a stunning lack of insight into those issues. For example, there is a guy who went there in 2008 who doesn't see how revealing it is that he insists on referring to Gerry as "Paw Paw." Call him whatever you want--call him "Harry Belafonte" for all I care. But when you are screaming "Be My Daddy" at least be aware that you're doing it. And this fellow isn't alone--the crop of graduates suddenly sporting fringed jackets and relentlessly spouting "Isn't that true?" at every witness is the same dynamic. It's mimicry of Daddy, like the small boy who watched his father in the morning and then pretends to shave.
    As for the finances, I agree with you, Norm. I don't think that Gerry (particularly with his spouse pulling the financial strings) does anything without there being agendas within agendas. And when people defend a lack of transparency or attack others for suggesting it would be constructive, it reminds me of children assuming that Mommy and Daddy understand money and that sort of "grown up" stuff is best left to them. And any criticism of TLC, Gerry, or the ranch dynamic is met with the emotional equivalent of "how DARE you after all he did for you?" that more typically would accompany the teenager's decision to drop out of school.
    Posted on August 29, 2009 at 1:36 am by Anonymous
  • Great comments. Thank you, Norm, for starting a di...
    Great comments. Thank you, Norm, for starting a discussion that TLC, Gerry and Jude should embrace. For years, it has felt like Gerry didn't want the alumni to know the details about the issues you raise. Keeping secrets builds distrust and suspicion. Tell us who are on both boards - yes we know who is on TLC's board, but tell us who is on the Spence Foundation Board. I know Jude is and Gerry, Kent and Imaging. That is 4 of the members of the TLC board of Directors who also sit on the Spence Foundation Board. Share the terms of the lease and who drafted it, what its terms are and how long it is for and whether TLC got independent legal advice regarding same. Tell us why Charlie Abourezk and John Nolte were thrown off the TLC Board. Tell us how much each TLC board member has contributed to TLC. Tell us how much has been spent on the remodeling work being done and TLC and who paid for it. I have been told that TLC has paid for it. If donor money is being used to pay for that, don't the donors have the right to know? Quit implying that TLC owns the ranch when it doesn't. If you are going to ask us for money, we are entitled to know these things. Make the financial statements public.
    Posted on August 29, 2009 at 2:38 pm by Anonymous
  • Blogs are blogs. My Dad told me that anonymous tal...
    Blogs are blogs. My Dad told me that anonymous talk is just that. It should be for the annonymous. Bill Gates has lots of foundations that are helping people all over the World. Curing diseases and relieving pain. I do not fault him for what he and his wife and their foundtions do for others. I do not fault Gerry and his family for helping others in their own way. I do fault those who cast their net far and wide as a blog sport. We can agree to disagree. Those who have a reason for their folly should tell us there all. Gerry opens himself up at each TLC event for anyone to ask any questions about all. It is often painful for him as he tells the Truth to all who are presnt. Norm tell us your all. What really pains you? You should share your true beliefs about your being an attorney and why you strive for Justice. What is your fight for Justice all about? Go to a regional and ask Gerry the questions you want. I have never known Gerry not to answer. But you should answer questions posed to you on your Blog. Please share with us the truth. We all know that it is very difficult for attorneys to tell the truth especially about themselves.
    Posted on September 1, 2009 at 9:03 am by tim blake TLC 02 (A great Class)
  • I dare you Tim, go to a Regional and ask Gerry Spe...
    I dare you Tim, go to a Regional and ask Gerry Spence to release all of TLC's financial statements, Spence Foundation financial statements, the lease, the list of donors to TLC (and in particular the list of board member donations), an itemized list of the costs of improvements to the ranch, the minutes from the board meetings, both TLC's and the Spence Foundations bylaws. I would lay odds that you will not get anything. So, do what Norm did, read the 990's on line. That will be the only way any of us will get any financial information about TLC. And the picture they paint is as Norm describes. And Gerry's answer is really just a smokescreen. He could easily release the documents, but he chooses not to. Ask yourself why? Is there something to hide? And as donors to a non-profit, we are absolutely entitled to this information.
    Posted on September 1, 2009 at 10:37 am by Anonymous
  • In the 1950s, speaking on the significance of host...
    In the 1950s, speaking on the significance of hostility to leading critical writers, Gore Vidal said:
    " . . . it is traditional that he who attempts to define man's condition demoralizes the majority . . . ."
    Posted on September 3, 2009 at 9:23 am by Anonymous

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