L.A. education foundation became a lucrative source of income for USC’s Pat Haden and his relatives

Seventeen years ago, former USC and Los Angeles Rams quarterback Pat Haden joined the board of an old, little-known charitable foundation that helps needy young people get an education.

The George Henry Mayr Foundation, established in 1949, has no office of its own, no full-time staff and no website. Its founder and namesake wanted it to be a thrifty operation that gave as much scholarship money as possible to California educational institutions.

Under Haden’s leadership as board chairman, however, the $25-million foundation became a lucrative source of income for him and two of his family members -- even as its scholarship spending plunged to a three-decade low and the size of its endowment stagnated, a Times investigation has found.

Haden, his daughter and sister-in-law together collected about $2.4 million from the foundation for part-time roles involving as little as one hour of work per week, according to the foundation’s federal tax returns for 1999 to 2014, the most recent year available.

Half of that, about $1.2 million, went to Haden. His annual board fees have been as high as $84,000; the foundation paid him $72,725 in 2014.

During Haden’s tenure on the board, donations directed to USC, where he has been athletic director for nearly six years, far outpaced the amounts given to any other school, a Times analysis of the tax records shows.

Haden, 63, was a paid advisor to the foundation in 1998 and became board chairman the following year. His father-in-law, Benjamin F. Grier, was a board member from 1984 until his death in 1999. Catherine Grier Olson, Haden’s sister-in-law, became a member a year later, in 2000.

Since then, Olson, 59, has received more than $750,000 for her director duties.

Natalie O’Connor, Haden’s 37-year-old daughter, has held part-time positions at the foundation and received about $470,000 in payments since 2005, according to tax records. She has been variously identified on its tax returns as a director, secretary and administrative worker.

Under terms of the foundation’s trust, the three board members can pay themselves “reasonable compensation” with the approval of Wells Fargo Bank, the trustee, which received about $166,000 in 2014 to manage the finances.

Payments to board members and O’Connor totaled $244,000 in 2014. That same year, the Mayr Foundation gave $645,000 in scholarships, down from $1.1 million in 2008.

Spokesmen for Haden and the bank defended the payments, saying they were appropriate for the work done and the board members’ skills.

Haden declined to be interviewed for this article, but responded to some questions by email and issued statements through USC spokesman Tim Tessalone. In one statement, Haden said Wells Fargo approved “the board’s composition, activities and compensation.” He said the board “is proud of its work and the difference those scholarships have made in the lives of these thousands of students.”

This month, in response to further Times inquiries, Tessalone said in an email that Haden had stepped down as the foundation chairman but would remain a volunteer board member and would no longer receive fees. Tessalone said Haden was scaling back his work for the foundation for health reasons.

Many foundations do not pay their board members, philanthropy experts say. The $1.5-billion California Community Foundation, for example, does not pay board members.

Foundations that do compensate board members, those experts say, typically pay far less than the amounts received by Haden and his relatives. The $12.5-billion Ford Foundation paid its board chairman about $30,000 less than the Mayr foundation paid Haden in 2014.

Mark Hager, an associate professor of philanthropic studies at Arizona State University, said in an email the Mayr payments to the board would be high “even for a foundation that was giving out more than $50 million in grants each year.”

“I’ve never heard of fees that large,” said Adam Hirsch, a law professor at the University of San Diego who specializes in trusts.

Tax returns for the organization are not available for the first two decades of its existence. But, in the 1970s, annual compensation for the directors ranged from zero to $500 each.

The foundation’s investment-based assets had a market value of about $28 million when Haden became a director and the board chairman. They dropped to $20 million three years later, fell further during the recession -- which hit many charity investments hard --and had rebounded to $25 million in 2014.

Wells Fargo, which oversees those investments, did not answer questions about the decline in both the value of the assets and scholarship disbursements.

Lisa Ranghelli, who reviews foundations for the National Committee for Responsive Philanthropy, a watchdog group, said it was unusual for relatives to control the board of a foundation their family did not establish. She said “it’s not a great practice” because relatives might be reluctant to challenge each other on matters such as investment strategies and the amount of director fees.

“You’re looking at a very insular situation,” Ranghelli said of the Mayr board.

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George Mayr was 81 when he established the foundation with a $3-million endowment.

The eight-page trust declaration, filed in 1949, mandated that disbursements be used “exclusively” to provide scholarships and pay incidental expenses for “deserving, needy and worthy young men and women.”

Mayr wanted them to pursue “useful trades” like chemistry or electrical engineering, the declaration stated. He died in 1958.

Mayr’s own education was cut short, and that was one of the reasons he set up the trust.

Born in Rockford, Ill., in 1868, he dropped out of school at 14. He had dreamed of studying medicine. Instead, Mayr cleaned the offices of two doctors for $5 a month. He spent his idle hours reading his bosses’ medical books.

After surviving a bout of typhoid in 1905, he developed Mayr’s Wonderful Stomach Remedy. It promised to treat a range of ailments, including gallstones, indigestion and fainting spells. The concoction of Epsom salts and olive oil made Mayr a fortune -- and cost him a $25 fine in 1915 from the U.S. Department of Agriculture for making misleading claims.

He moved to Los Angeles and eventually settled into a ridgetop mansion in Beverly Hills. His business empire grew to include downtown parking lots and other real estate.

Mayr was a wealthy man but also a frugal one. He once postponed motoring to Ventura to visit relatives because gas cost too much, recalled Al Maland, who married the daughter of Mayr’s nephew in the 1950s.

Every day or two, Mayr visited the now-defunct Beverly Hills National Bank to check on the foundation’s finances and make sure its future would be on a firm footing, according to a profile of the businessman published in 1950 by The Times.

Mayr was childless, but his nephew, Ted Mayr, who owned a funeral home in Ventura County, served on the board from its inception until his death in 1976.

Since then, the board has been without a Mayr family member, said Maland, Ted Mayr’s son-in-law. Maland said that George Mayr, who he considered an uncle, would have been upset to learn of the payments to Haden and his family members.

“Under no circumstances would Mr. Mayr agree to pay money like that to individuals,” the 93-year-old Maland told The Times.

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Michele McGarry Crahan, a former schoolteacher, joined the Mayr board in 1996, three years before Haden. When Crahan left her post this year, she was succeeded by Haden’s daughter, O’Connor, Wells Fargo said.

During her time on the board, Crahan was paid an average of $30,000 annually, less than Haden and his sister-in-law, tax records indicate.

In an interview at her Windsor Square home, the 80-year-old Crahan said she depended on Haden, as board chairman, to set the director fees. “I’m not much of a businesswoman,” she said.

Natalie O’Connor, Haden’s daughter, is listed on tax forms from 2008 to 2014 as either a “director” or “director/secretary,” and received a total of about $420,000 in fees for those years.

But Wells Fargo’s spokesman said her titles on the tax returns were incorrect; O’Connor, he said, did not become a director until this year. In 2005, she was paid about $50,000 for administrative work, the tax records show. She is not named on the returns for 2006 and 2007.

In an email, Vince Scanlon, the Wells Fargo spokesman, also said that the tax forms for several years incorrectly reported that Haden and O’Connor worked only one hour a week for the foundation. In fact, Scanlon said, Haden worked an average of 16 hours a month and O’Connor worked 40 to 45 hours a month. The bank said it intends to amend the tax forms.

O’Connor and Olson did not respond to interview requests.

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Haden brought a dash of celebrity to the foundation. He had been a star on the gridiron and Rhodes Scholar at USC, then helped lead the National Football League’s L.A. Rams to several postseason berths.

After his NFL career ended in 1981, he practiced law and provided color commentary for national television broadcasts of Notre Dame football games, moving easily between the worlds of sports and business.

When USC hired Haden as athletic director in 2010, he was a longtime member of USC’s board of trustees and a partner with former Los Angeles Mayor Richard Riordan in a successful investment firm.

Haden is stepping down as athletic director June 30, but he plans to remain on the school’s payroll for a year to oversee the $270-million renovation of the Los Angeles Memorial Coliseum, where USC plays football.

Since Haden became chair of the Mayr board, the foundation has given $16.6 million in scholarships and other educational grants, according to tax records. Of that, $1.8 million went to USC, the records show; donations to the school’s athletics program totaled at least $255,000.

The second-highest recipient after USC, St. Mary’s Academy, a Catholic high school in Inglewood, received $480,750.

In deciding where to spend the foundation money, Haden said in a statement, the board reviews more than 70 grant requests from schools each year and visits 15 to 20 campuses. He added that “distributions to USC were for scholarship funds to deserving students.”

Tessalone, the USC spokesman, said in an email that “Pat recuses himself whenever USC is discussed.”

In a foundation document and a USC publication, however, Haden is mentioned in connection with Mayr gifts to the school.

The foundation’s 2001 tax return noted that a $15,000 donation to USC was “for the endowment per P Haden.”

And a USC newsletter in 2006 said Haden supported one of the university’s schools “through personal donations and scholarship grants awarded by the George Mayr Foundation, which he chairs.”

In 2006, the foundation also was a “Bronze Sponsor” of a fundraising dinner at the Beverly Wilshire Hotel to support USC’s Marshall School of Business, according to the school’s website. In exchange for $10,000, the foundation received a table for 10 and invitations to the pre-gala reception. Haden was listed as part of the six-member dinner committee.

paul.pringle@latimes.com

nathan.fenno@latimes.com

Times staff writer Ryan Menezes contributed to this report.

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