WonderWork CEO Resigns; Independent Bankruptcy Trustee to Take Over Management of the Charity
About 11 months after WonderWork filed for bankruptcy in the wake of an arbitrator’s decision that it pay HelpMeSee a $16 million award (see Donor Alert posted on 2/2/2017), WonderWork’s co-founder and CEO, Brian Mullaney, has resigned from the charity amid “allegations of fraud and misdeeds,” according to a November 9, 2017 report by The Wall Street Journal. The news of Mullaney’s resignation came on the same day that a judge tasked a U.S. bankruptcy trustee with finding an independent trustee to take over management of WonderWork.
The Wall Street Journal (WSJ) describes that an investigation by a bankruptcy court-appointed examiner “revealed that sufficient grounds exist to appoint a trustee to run the charity [WonderWork], given ‘the evidence of mismanagement and improper fundraising and reporting practices.’” The five-month investigation into WonderWork by the bankruptcy examiner produced “a laundry list of alleged misdeeds, including accusations that Mr. Mullaney used the $54.4 million in donations accumulated since 2011 to pad his and others’ paychecks; used false and misleading solicitation materials; failed to honor and account for matching donations; and made false and misleading statements in public filings, according to court papers,” the WSJ reports. In court papers, the examiner reportedly said: “WonderWork presents a case study on how a dominant CEO, left unchecked by a passive and overly deferential Board of Directors, can damage a charity beyond repair.” It is also noted by the WSJ that the New York attorney general’s office is investigating the allegations against Mullaney.
WonderWork contests the allegations made in the bankruptcy examiner’s report, saying they “were simply untrue,” according to WonderWork’s attorney, the WSJ reports. Further, WonderWork’s attorney reportedly said in court papers: “Despite—or perhaps because of—its deficiencies, the filing of the [examiner’s] report has damaged WonderWork’s reputation beyond repair and has made it virtually impossible to continue operations with current management in place.” With respect to Brian Mullaney’s resignation, per the WSJ, the following statement was made by WonderWork on November 9th: “For the sake of WonderWork and to avoid further distraction, Brian voluntarily chose to step down as CEO and from the board.”
Although Brian Mullaney’s resignation was announced on November 9th, CharityWatch has noted that he continues to be named as WonderWork’s CEO under the Board of Directors listed on WonderWork’s website, as of at least December 6, 2017. Furthermore, CharityWatch cannot find any reference to WonderWork’s bankruptcy on its website, and its home page continues to claim that “100% of all donations goes towards our free surgery programs.”
In light of the above, along with WonderWork’s “F” rating, CharityWatch continues to recommend that donors forgo making donations to WonderWork.
See also February 2, 2017 Donor Alert: $16 Million Award Against WonderWork May Force It to Cease Operations
See earlier article: Have You Been Wondering About WonderWork?