A civil trial focused on control of the $500 million Koret Foundation and the leadership of former Koret president and current board member Tad Taube led to awkward moments for both sides in a San Francisco courtroom this week.
Susan Koret, widow of Koret Foundation founder Joe Koret and longtime foundation chair, filed the suit in 2014, seeking to have Taube and San Francisco attorney Richard Greene, the foundation’s former general counsel, removed from the Koret board.
The lawsuit further demands recovery of millions of dollars she claims were granted to projects outside the scope of the foundation’s original mission of helping the poor and aiding Jewish communities in the Bay Area and Israel. The suit claims that Taube “autocratically controlled the Koret Foundation as a personal piggy bank to aggrandize his name and funnel millions of dollars annually to favored causes, many of which are politically and socially at odds with the core mission of the foundation.”
The lawsuit accuses Taube, who is also chairman of his own charitable organization, Taube Philanthropies, of diverting Koret Foundation funds to Jewish projects in his native Poland — including the Polin Museum of the History of Polish Jews in Warsaw — as well as to conservative groups in the United States, such as Stanford University’s Hoover Institution.
Taube, who was born in Poland, fled the Nazis and went on to make a fortune in real estate and venture capital in Northern California, was the foundation’s president for 32 years until he stepped down in June 2014.
Though the case centers on the allocation of Koret Foundation grants and a series of real estate deals, at times the trial devolved into character attacks on Taube and Susan Koret, who met Joseph Koret when she was hired as a caregiver for his first wife, Stephanie. Susan Koret married the clothing and real estate magnate after Stephanie Koret’s death in 1978.
Both Susan Koret and Taube testified at the trial, which opened April 18 and was expected to wrap up by the end of this week.
Taube testified April 26 in Superior Court in San Francisco, noting that recently he had been suffering from shingles and an “erosion of energy,” as he put it on the stand. Much of his testimony centered on his history with the Koret Foundation and his involvement in real estate deals, in which Taube earned commissions on the sales of Koret properties he had co-owned with Joseph Koret.
He acknowledged having a “fee-sharing” arrangement with real estate agent Greg Galli (who brokered the sales), but said in fact he lost money because his commission proceeds went to charity, by mandate of the Koret board.
Taube also addressed questions about Koret grants to the $45 million core exhibition of the Jewish museum in Warsaw, noting that he had made assurances to the museum that he would cover any shortfall in funding but that he never asked the Koret Foundation to do so.
Taube also testified that he was aware of an investigation into allegations he had engaged in “unwanted hugging and kissing” of women at the Hoover Institution. The subject was not further pursued by the lawyers as of midweek.
Susan Koret also took the stand on April 26. Under questioning from defense attorney Susan Harriman, Koret gave halting answers to basic questions, such as defining her role on the board and how much Koret has given to various grantees.
Koret, who is Korean-born and acknowledges having difficulties with English, had trouble answering some questions. When asked why she abstained or voted no on certain proposals before the board, she could not remember the reasons. She recalled voting no on one real estate sale, when the minutes showed she had voted yes. She couldn’t remember conversations she had about Koret real estate deals, although documents diplayed in the court showed she supported the deals.
When asked why she emailed Koret staffers asking for 14 changes to the minutes of an April 2014 board meeting, she claimed they were inaccurate but could not say how. She also could not remember writing that email, which was in perfect English. Koret said her niece sometimes helps her write.
She also denied she is an officer of the foundation, even though, as Koret chair, she is indeed an officer.
Koret’s testimony took a bizarre turn when she could not explain the meaning of Jewish peoplehood (other than to say “identity”), describe the Holocaust, or explain what was meant in an ad campaign touting her lawsuit that “the poor in the Bay Area are being short-changed” by the Koret Foundation.
When asked who was shortchanging the poor, Koret had no answer. She acknowledged she did not know what the term “shortchange” meant.
Koret said she was simply upholding the wishes of her late husband, who had wanted the foundation to be a positive force. When asked why she voted to decline grant requests by mainstream Jewish organizations that fight anti-Semitism and anti-Israel activity, such as the Israel on Campus Coalition and the Israel Project, she said they were “too political, too negative.”
On April 22, Anita Friedman, a co-president of the Koret board, testified that Susan Koret was incapable of handling her duties as a foundation board member. Susan Koret was named the foundation’s chairwoman for life in her husband’s will after Joseph Koret died in 1982.
Friedman, who also serves as executive director of S.F.-based Jewish Family and Children’s Services, testified that she gave a presentation on the Holocaust to the foundation’s board and was told by Susan Koret: “I didn’t know about the Holocaust, Joe never told me.”
Also on April 22, former foundation employee Kirsten Mickelwait testified she was fired after rebuffing Taube’s efforts to set her up romantically with his friend, venture capitalist George Sarlo, founder of the S.F.-based Sarlo Foundation. When she told Taube she was not interested, Mickelwait testified that Taube responded: “Honey, sex comes and goes, but money is forever.”
Additionally in the lawsuit, Susan Koret accuses Taube and other board members of blocking her from making former San Francisco Mayor Willie Brown president of the board. Instead, when Taube retired as president in 2014, Friedman and Michael Boskin became co-presidents.
She also contends the foundation had losses of about $34 million because of actions taken by Taube and other board members, including the untimely sale of Bay Area real estate and expenses related to the Hoover Institution and other causes. Included in that figure is $93,000 for a mural at the foundation’s new home that featured a portrait of Taube with Joseph Koret.
Greene, the former Koret Foundation general counsel, testified that the real estate deals were proper, timely and lucrative for the organization.
But Herbert Beller, a Northwestern University law professor specializing in federal tax law who was hired by Susan Koret to examine the foundation’s real estate deals, testified last week that some of those transactions “raised serious tax risks and exposures” and amounted to “flat-footed self-dealing.” However, Beller did not testify that the deals were financially unwise or not lucrative.
The Koret Foundation has issued $500 million in grants since its founding in 1979, supporting education, hospitals, humanitarian groups, the arts and Jewish life in the Bay Area. It supports similar projects in Israel, and in recent years also has focused on Jewish life in Poland.
Susan Koret’s attorneys said in court that all funds given to charity food programs by the Koret Foundation over the years paled in comparison to what Taube directed to the Hoover Institution, and that Susan Koret favored increasing food-aid donations in the Bay Area instead of giving money to global Jewish causes such as the museum in Warsaw.
But on the stand Friedman defended the museum grants, saying they were appropriate and worthwhile.
“Poland is central to the Jewish story,” Friedman testified. “More than 80 percent of American Jews trace their roots to Poland and that part of the world.”