Lawmakers call for resignation of Minnesota Orchestral Association leaders

A group of 10 state legislators today called for the resignation of Minnesota Orchestra President and CEO Michael Henson and two members of the orchestra's board of directors on the grounds that they have poorly led the orchestra.

In a letter sent to members of the Board of the Minnesota Orchestral Association released late this afternoon, the lawmakers accused Henson, Board Chair Jon Campbell, and Past Board Chair Richard Davis of financial mismanagement.

The letter comes just hours before the MOA board is due to gather for its annual meeting.

Citing studies by two groups of orchestra supporters,  Save Our Symphony Mn and Orchestrate Excellence, the lawmakers -- among them Sen. John Marty, Rep. Phyllis Kahn, and Rep. Alice Hausman -- call Henson's fiscal leadership a disaster. The legislators also said that orchestra officials "manipulated financial results in a deliberate deception of the public, first to gain public funding for Orchestra Hall and then to justify locking out the musicians for well over a year."

The letter also calls for an immediate end to the musicians lock out, and asks board members to deliver a change in leadership. The letter's full text is below.

In response Orchestra management issued the following statement:

“The allegations raised by some legislators have been thoroughly reviewed and discredited by credible professional sources including the Office of the Legislative Auditor. This is a complex labor dispute that requires negotiations at the bargaining table in order to come to a contract resolution that the community can afford.  As we have emphasized many times, the Board is ready to meet with musicians at any time to negotiate a compromise.”

December 10, 2013

Dear Minnesota Orchestral Association Board Members:

As you prepare for your annual meeting tomorrow, we write to express our deep concern about recent actions of Minnesota Orchestral Association (MOA), and the future of the Minnesota Orchestra.

Leadership of the Minnesota Orchestral Association manipulated financial results in a deliberate deception of the public, first to gain public funding for Orchestra Hall, and then to justify locking out the musicians for well over a year.

This intentional deception was spelled out in September 2009, by MOA VP of Finance Bryan Ebensteiner to MOA’s Finance and Executive Committees,

"Balances in 2009 and 2010 would support our state bonding aspirations, while the deficits in 2011 and 2012 would demonstrate the need to reset the business model." This statement was made, not as a prediction, but as a fact -- long before Mr. Ebensteiner had any real ability to know what would happen with MOA finances.

MOA achieved exactly the result Mr. Ebensteiner said it would, with balanced budgets in fiscal years 2009 and 2010 and then large and increasing deficits in FY 2011 and 2012.

Save Our Symphony – Minnesota (SOS-MN), an independent organization of Minnesota Orchestra supporters, has documented this MOA manipulation of its financial results. We encourage you to read the entire presentation of Save Our Symphony: http://tinyurl.com/SOSMN-The-MOA-Debacle.

When seeking public funding during the 2010 legislative session, CEO Michael Henson told legislators, "On the financial front, we have announced balanced budgets over the last three consecutive years, and we are facing the current economic downturn with a degree of stability." In light of the internal documentation provided by SOS-MN, these statements were deceptive to the Minnesota Legislature and the public.

This pattern continued in May 2012, during the same week as the MOA was finalizing an agreement for the public money with Minneapolis, MOA secretly purchased 13 web domain names such as: "savethemnorchestra.org" and "saveourminnesotaorchestra.net." Such domain names might be desired by those upset at the likely destruction of the orchestra from an extended lock-out of musicians.

While the public had no reason to suspect that the MOA would soon be engaged in a lock-out, MOA management was preparing a strategy that would shut down the Orchestra just when they were taking the public funds. This is further evidence of careful, advanced planning for a long and difficult battle with the orchestra musicians who were supposed to be performing in that newly renovated hall.

It is not only the deception that is troubling, but also the apparent fiscal mismanagement:

In October, Orchestrate Excellence, another independent organization of orchestra supporters, released a detailed comparison of the Minnesota Orchestra’s financial performance against that of the Cleveland Orchestra. Both are major, first-rate orchestras located in large, Midwestern cities, but the disparity of results between them is quite revealing. The Twin Cities are larger and have a more prosperous population and business community than Cleveland, yet from a fiscal perspective, the Cleveland Orchestra management has significantly outperformed the Minnesota Orchestra management.

Since Michael Henson was hired as CEO of the Minnesota Orchestra, from 2008 – 2012, the Minnesota Orchestra’s revenue from operations has decreased over 15%, contrasted to the Cleveland Orchestra's increase of over 8%. Likewise, for donor contributions; from 2008-12, the Cleveland Orchestra increased its donor contributions (excluding capital campaigns) by over 25% while the Minnesota Orchestra has shown a decrease of over 15%. The Minnesota Orchestra’s return on its investments did not match that of the Cleveland Orchestra nor of its peer group of similarly-sized endowment funds. We urge you to read the entire comparison at http://www.orchestrateexcellence.org/a-tale-of-two-orchestras/

Despite the subpar financial management of Mr. Henson, and the deliberate deception carried out by his administration, MOA rewarded him with not one, but two, bonuses, totaling over $200,000, bringing his total compensation to over $619,000 during the 2011 calendar year. These bonuses were paid in the midst of the financial crisis that was later used to justify the lockout. The results under Henson's management have been nothing short of a disaster.

The bottom line is that the Minnesota Orchestra musicians have now been locked out for over 14 months. There is no sign of any change in the near future, as the MOA management has refused to end the lockout. The MOA rejected even the proposal of George Mitchell, the mediator that the MOA itself suggested. Many commentators around the country have been aghast that such brass knuckle negotiating tactics would be used in a non-profit organization that should be about lifting the human spirit and spreading the joy of great music to the next generation.

It is clear that MOA management and Board leadership is willing to destroy the orchestra in order to "reset the business model."

Orchestra Hall sits dark and empty. The $14M of public funding is not being put to public use. The only Minnesota Orchestra concerts that are being performed are those produced by the musicians without any MOA support or funding. MOA’s endowment

and other donor contributions are not being used for the purposes for which they were given to MOA.

The Minnesota Orchestral Association itself sits on the verge of extinction as a meaningful organization that has any legitimate reason to continue its existence.

We call for:

--the resignation of CEO Michael Henson, Chairman Jon Campbell, Past Chair Richard Davis  and any others in MOA leadership involved in the public deception and the financial mismanagement of the organization. To restore public trust in the Orchestral Association, it is time for new leadership.

--an immediate end to the lockout of the musicians and resumption of negotiations over a new contract. The MOA has locked out the musicians; the MOA is the only one who can end this debacle. In other words, accept the mediator's proposal.

The Minnesota Orchestral Association Board will need to decide the direction it will pursue. If the board fails to replace MOA leadership and end the lockout, it will force the hands of other stakeholders, including the state, which provided major public funding for the renovation of Orchestra Hall.

We believe there are members of your MOA board who truly care about the Minnesota Orchestra, members who question why board leadership and management has been willing to destroy the orchestra that they claim to love. And with the loss of more than one entire season, the departure of Osmo Vänskä and some of the top musicians, the cancellation of Carnegie Hall and BBC Proms performances, they are destroying the Minnesota Orchestra.

Please deliver a change in leadership and an end to the lockout before Minnesota's World-Class Orchestra is nothing more than a memory.

Sincerely,

Senator John Marty

Representative Alice Hausman

Representative Phyllis Kahn

Senator Patricia Torres Ray

Representative Jim Davnie

Representative John Lesch

Representative Jerry Newton

Representative Ray Dehn

Representative Leon Lillie

Representative Mike Freiburg

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