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Academy faults former leader on credentials, salary

Says Berlowitz inflated credentials, pushed pay to unreasonable level

The long-awaited report comes eight months after Leslie Berlowitz resigned as president and chief executive of the 234-year-old honor society.

Kurt Hegre for The Globe/File

The long-awaited report comes eight months after Leslie Berlowitz resigned as president and chief executive of the 234-year-old honor society.

The prestigious American Academy of Arts and Sciences released a scathing report Monday on its former president, concluding that Leslie C. Berlowitz exaggerated her resume and manipulated the compensation process to boost her pay by nearly $2.2 million over her 17-year tenure.

The long-awaited report comes eight months after Berlowitz resigned under pressure as president and chief executive of the 234-year-old Cambridge-based honor society. Her departure followed a Globe report that she falsely claimed on federal grant applications that she had a doctorate from New York University, and that she earned far more than leaders of similar nonprofit institutions.

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The report marks the first time that the academy has publicly acknowledged that Berlowitz did anything wrong and provides a wealth of new details about the misconduct. The academy also promised to amend its tax returns in light of the new findings.

“The weight of the evidence warrants the conclusion that Ms. Berlowitz knew that her resume contained materially inaccurate information regarding her academic and professional credentials,” the report found.

Berlowitz denied she ever claimed to have a doctorate, but investigators found that between 2002 and 2013 the academy submitted 18 grant proposals — many of which she signed — that falsely said she possessed the degree. She also e-mailed the inaccurate resume to several people and made handwritten edits on four versions listing the nonexistent degree, as well as an incorrect title for a past job.

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The report said Berlowitz, 70, declined to talk directly to investigators because of health issues — she is undergoing cancer treatment — but Berlowitz released a written statement Monday blasting the findings as “incomplete and unfair.”

“The report ignores critical facts, relies on anonymous sources, and misrepresents certain key information in order to reach a set of preconceived conclusions,” she wrote.

The academy, founded in 1780 by John Adams and other prominent Harvard College graduates to promote scholarship in the arts and sciences, began the investigation shortly after the Globe first reported the concerns about her resume and pay last year. The Globe reports also sparked additional reviews by the Massachusetts attorney general’s office and two federal agencies that gave grants to the academy based on proposals with Berlowitz’s inflated resume.

In total, the academy won $2.4 million in federal and private grants with proposals that falsely included the fictitious doctorate from several organizations, including the National Endowment for the Humanities, National Science Foundation, Andrew W. Mellon Foundation, Carnegie Corp. of New York, and State Street Foundation of Boston. Some applications also misstated her work history at NYU, the report found.

The board also found Berlowitz’s total compensation soared over the years to “unreasonable” heights for a nonprofit its size. For instance, in 2011 she earned at least $598,000 in salary and other compensation — 87 percent more than her peers at similar institutions. Over her entire tenure, she earned $2.2 million more than the “normal” pay for someone in her position at a similar-sized institution.

Nonprofit boards typically base executive pay on recommendations from outside consultants and surveys of pay at similar institutions.

But instead of using comparable organizations, investigators found that Berlowitz hand-picked a list of far larger nonprofits, including Wellesley College and Woods Hole Oceanographic Institution. Wellesley, for instance, has more than 3,000 employees, while the Academy had 52.

“No matter how extraordinary Ms. Berlowitz’s skills, leading a nonprofit institution with an $8 million annual budget is not comparable to leading institutions with budgets that average more than 10 times that amount,” concluded the report, assembled by the board with the help of outside law firms and a special committee.

The report also found the board failed to use an independent compensation consultant — against the advice of attorneys — and Berlowitz berated an employee who tried to gather information from similar institutions to help determine her salary, and declined to share that data with the board.

“At the heart of the failure of the compensation process was Ms. Berlowitz’s inappropriate participation in it,” it found.

Berlowitz insisted that her pay was determined solely by the board’s compensation committee. “I never interfered with their work or withheld any material they requested,” she said in her statement.

Regardless, the board vowed to improve the process of setting pay in the future.

The report also found that the academy provided misinformation in its tax returns, such as failing to report Berlowitz’s first-class air travel at the academy’s expense and falsely reporting that the board had used an outside consultant to help set her compensation.

The academy has already filed a tax form for 2012 disclosing that Berlowitz received an “excess benefit” of $166,861 — income that couldn’t be reasonably justified even if Berlowitz was paid in the 90th percentile of peer institutions — from 2010 to 2012. The decision creates the possibility that the Internal Revenue Service could ask her to repay the money or pay additional tax penalties.

The IRS could not be reached for comment, and Berlowitz’s spokesman did not respond to a question about the implications of the disclosure.

Berlowitz could have received even more had she been fired — including severance and other benefits worth more than $3 million — under a contract she negotiated with the academy. But the academy said she agreed to forgo the severance as part of a separation agreement signed last year. Instead, she received a one-time payment of $475,000 (which the academy said she was contractually owed) and supplemental health insurance for five years when she stepped down.

More than a decade ago, the Globe first reported complaints from workers and some members about Berlowitz’s harsh management style. But the report said many staffers were afraid to report additional concerns to the board for fear of retaliation, noting that two previous efforts to oust Berlowitz had failed.

Monday’s report noted that she severely criticized her staff and the academy had exceptionally high turnover during her tenure, especially among her executive assistants.

In addition, the report said staffers were expected to “tend to her personal needs, unrelated to the work of the academy.” Though the report did not go into detail, the Globe previously reported complaints that workers were required to drive her to and from the office.

The report did credit Berlowitz with boosting fund-raising and raising the academy’s profile. But it said that was offset by low morale and “her repeated use of documents containing inaccurate credentials and employment.”

The report also found that members of the board’s compensation committee allowed Berlowitz to have “undue influence” over the compensation process, overlooked her treatment of staff, and ultimately awarded her more money than can be justified under IRS rules.

Since Berlowitz’s resignation, the academy has revamped its board of directors and updated its bylaws, and on Monday it released the 28-page report in an effort to improve its governance policies going forward. Only one of the 13 current board members was in place when Berlowitz stepped down last summer, and the academy plans to appoint a new chief executive.

The “board of directors has now completed a difficult but thorough and uncompromising investigation of the allegations published last summer about aspects of its administration and governance,” said Don M. Randel, the new chairman.

A spokesman for the attorney general’s office said it is reviewing the report and changes the academy is making.

Some academy members who called for Berlowitz’s resignation last year praised the organization for releasing results of the investigation and publicly addressing the concerns.

“I think the report was candid and accurate and should help the academy get past the disgrace its former president brought upon it,” said Harvard University law professor Laurence H. Tribe, who was inducted to the academy in 1980. “It’s too bad it didn’t come sooner.”

Todd Wallack can be reached at twallack@globe.com.
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