By Maria Saporta
Friday, February 24, 2012
The Atlanta-based King Center — a nonprofit that has experienced a multitude of management changes over the years — now is under the oversight of Terry Giles, who was made interim custodian of the Center by a Fulton County Superior Court judge on Jan. 31.
The order gives Giles broad-based powers, including the ability to negotiate and execute contracts, to prepare new corporate governance guidelines, to explore long-term funding opportunities, to manage the accounting functions and review past procedures, to help identify new board members, to handle any potential adverse litigation or claims, and to determine the long-term capital needs of the center.
The order went on to say that Giles, who is supposed to work with the King Center board and management, “shall implement, address and accomplish” those duties by June 1.
Giles recently sat down for a lengthy interview with Atlanta Business Chronicle, when he shared his views and plans for the Center as well as discussed his relationship with the members of the King family — namely the three surviving children of revered civil rights leader Martin Luther King Jr.
He is no stranger to the King family. In April 2010, Giles, a Houston lawyer with a colorful past, was named custodian of King Inc., the for-profit entity that handles the intellectual property rights of the King estate.
King Inc. is owned by the three children — Martin Luther King III, Dexter King and Bernice King. Giles had been brought in as custodian because the siblings were suing each other over financial and governance issues.
Now, as custodian of the King Center as well as King Inc., Giles is back in the spotlight. The appointment is being welcomed by some and questioned by others.
Giles’ re-entry to center stage mirrored the reasons he was brought into King Inc. Earlier in January, Martin King III was removed as CEO of the King Center and replaced by his sister, Bernice King, a move that was supported by Dexter King. The board offered that Martin King III remain as president, but he resigned saying it would only be ceremonial.
“When things kind of exploded at the Center, because we have had a pretty good relationships with the three siblings, we got drawn into it,” Giles said, adding that Dexter and Bernice asked him to seek court approval to become custodian of the Center. “Martin objected to that.”
Martin King III objected because of philosophical differences — particularly questioning whether there was a conflict of interest for the same person to oversee the for-profit King Inc. and the nonprofit King Center.
“My concern is whose interest is the custodian representing — is it the interest of the King Center, or is it the interests of the King estate,” King III said in a telephone interview Feb. 21. “I continue to be concerned about the two institutions being conflated.”
But when asked if there was a conflict of interest, Giles quickly responded: “None.”
Giles said he is “very clear about the difference between King Inc. and the King Center.” And he believes there’s less of a conflict of interest for him being in charge, as an officer of the court, than for the family members.
“We are very, very aware that these are two separate entities with two separate rules, and they can’t be mixed,” Giles said. “It draws a bright line of distinction between the for-profit and the nonprofit.”
Christine King Farris, sister of the late civil rights leader, has been on the King Center board since its founding.
“The King Center is not going to change from its original mission,” she said in a telephone interview. “I was there from the beginning. We will remain a nonprofit 501(c)3 organization.”
Asked about Giles serving as the King Center’s custodian, Farris said: “Terry Giles is there to offer his advice. If we want to take it, we can. It’s not like he’s standing over us and ordering us what to do.”
Another longtime board member, former Atlanta Mayor Andrew Young, who worked side by side with MLK Jr., is not so sure.
“Part of the problem is that I really don’t know what’s going on,” Young said. “Terry Giles was made trustee of the estate, and now it seems as though the estate is taking over the Center. It’s a concern.”
Young also added that he didn’t know how Terry Giles “got put in charge of the King legacy.”
Giles has quite a background. Early on, he was a criminal defense attorney who handled high-profile cases, such as the Hillside Strangler. He became disillusioned as a criminal defense lawyer, and he focused on civil cases and family relationships. Among his clients: comedian Richard Pryor, former Enron CEO Kenneth Lay, and late TV personality Anna Nicole Smith.
He also is a close associate of Werner Erhard, the founder of EST, serving as board chairman of Erhard’s successor organization — Landmark Education.
Giles, who has been described as a conservative Republican, did meet MLK Jr.’s widow, Coretta Scott King, in 1983 at a White House event with President Ronald Reagan where Richard Pryor spoke. Mrs. King then talked to Giles about how she wanted to build a Center that would carry on her husband’s legacy.
“I’ll never forget her thoughts of what she wanted the center to be,” Giles said. “That has never left me.”
Now as the King Center custodian, Giles said he is trying to determine whether there were any improprieties that might have occurred when Martin King III was CEO.
But Giles quickly added: “I regret Martin’s decision to resign. I like Martin, and I hope at some point he’ll reconsider and be an important part of what’s happening at the center.”
Meanwhile, Giles is helping “design a strategy and game plan” for the Center.
He wants to increase the board from seven members to 15. Currently, six of the trustees are members of the King family, and Young is the only non-family member, even though he is called “Uncle Andy.”
“The board needs to have some members who are outside the family and can give a perspective to the family regarding fundraising and corporate responsibility,” Giles said, adding he will be “persuasive” in recommending who should join the board.
Giles said there are two major problems at the Center — one being bricks and mortar and the other being content and programming. Plans exist for a major renovation or rebuilding of the Center, but it all will boil down to fundraising.
Currently, the Center is facing financial problems, and there’s a question of whether it can pay its debt and even cover payroll.
“Right now what we want to do is avoid any kind of bankruptcy to get the Center on firm footing,” Giles said. “Once we have a strategy in place, then we will begin to deal with the larger issues of major-league fundraising and what is the best structure to do that. We do think there are some significant donors, angels who would be ready to come forward to assist us if there were a competent set of strategies and a business plan that could be put forward.”
But King III said there had been donors ready to support the Center when he was CEO, but after the leadership changes, those commitments dried up.
Young agreed: “We were well on our way to developing a $100 million plan to improve the Center.”
Giles acknowledged that division among the family members does make his job more difficult.
“There’s no question that as long as there’s a feeling of conflict, as long as there is a sense or perception of issues surrounding the Center, it makes fundraising more difficult,” Giles said.
Ideally, he would like to find a way for the siblings to agree.
“There’s been a weakness for the three of them to work together and reach agreement,” Giles said. “We could act as mediator, take strengths of the three of them and eliminate conflict.”
But Young, who has been through all the Center’s ups and downs, said he is “less optimistic now than I’ve been before.”
Still, he hopes “reason can prevail.”
King III also hopes the Center will be able to fulfill his mother’s vision as being a place to spread the mission of nonviolent social change.
“I always want to retain an air of optimism,” King III said. “I would hope and believe that it will happen one day. It will always be my hope that we as a family can work together in a harmonious fashion.”
Sounds like more public confrontation and angst will be forthcoming. How Mr. Giles can have no conflict of interest in simultaneously representing a for-profit corporation owned by the King children (King, Inc.) and a not-for-profit corporation with interested persons in addition to the King children (King Center) is beyond me.
Sounds like more public confrontation and angst will be forthcoming.
How Mr. Giles can have no conflict of interest in simultaneously representing a for-profit corporation owned by the King children (King, Inc.) and a not-for-profit corporation with interested persons in addition to the King children (King Center) is beyond me.