California Attorney General Rob Bonta has announced a settlement of nearly $1.2 million with the Valley Rock Foundation, previously known as the Edward A. Keith Foundation, and its directors Celeste White and Dr. Robert White. The agreement addresses allegations of self-dealing transactions, unjust enrichment, and breach of fiduciary duty involving improper personal benefits derived from the foundation’s charitable assets. It is important to note that the Whites do not admit liability in this settlement.
Attorney General Bonta emphasized the commitment to maintaining the integrity of charitable organizations: “At the California Department of Justice, we are unwavering in our commitment to safeguarding the integrity of charitable organizations and will hold any individual or entity accountable that misuses charity funds for personal enrichment.” He further stated, “This settlement sends a clear message: Those who abuse their positions and exploit charitable resources for personal gain will be held fully responsible for their wrongdoings.”
The investigation conducted by the Attorney General’s Office found that the Whites allegedly used charitable assets to make improvements on their personal real property (Barn) and condominium in Lake Tahoe, Nevada. They also reportedly formed Veritas Refuge to manage these real estate assets without transparent reporting on IRS Form 990-PFs.
As part of the settlement terms, several actions have been mandated:
- The dissolution of the foundation is required, with remaining assets post-fees directed to Westmont College.
- One director from among the Whites will resign, replaced by Westmont College's President as an independent board member.
- Final grants totaling $10 million will be made towards various community projects in California.
- The foundation will contribute $997,571 to ImpactAssets, Inc., resolving claims related to property damage affecting intended charitable use.
- Payment of $150,000 is required for attorneys’ fees and investigatory costs to the California Department of Justice.
A copy of the full settlement details is available online.