Recording Academy President Neil Portnow Accused of Diverting Funds from the MusiCares Charity

NARAS/Grammys President Neil Portnow

Recording Academy/Grammys President Neil Portnow

Recording Academy chairman and president Neil Portnow is in broiling water once again — this time for diverting funds.  But are these just accusations from a disgruntled ex-employee?

Neil Portnow, president and chairman of the Recording Academy, is now facing allegations of diverting funds away from the organization’s MusiCares Foundation.  According to accusations surfacing Wednesday, Portnow steered the funds from the charitable group to cover deficits incurred by the recent Grammy Awards in New York.

The Recording Academy, or NARAS, oversees the annual Grammy Awards, easily the most-watched and coveted music awards ceremony.

The accusations are being leveled by former MusiCares VP Dana Tomarken.  According to Variety, Tomarken detailed the issue to the Recording Academy Board of Trustees at their annual meeting in Hawaii.   That meeting is happening this week, with Trustees chewing on a 4,500 letter detailing the issue.

Here’s a snippet.

“I was very clear with Neil that I did not think this was a good idea, especially since MusiCares still had $5 million from the 20th anniversary campaign which was specifically earmarked for financial assistance,” the tell-all letter goes.  “In addition, the MusiCares Board of Directors had not approved reducing our grant funds to people in need.  Reduction in the amount of financial assistance could not be made unilaterally by staff.  It needed board approval.”

MusiCares is a charitable enterprise overseen by the Academy that offers emergency financial assistance to musicians in need.

That also includes people within the music industry and various music-related roles, with assistance also including medical payments and substance abuse recovery.  The group has distributed more than $48 million to people in need since it was founded in 1989, according to the Recording Academy.

That’s part of a far broader operational budget, which allegedly was used to cover at $6-8 million shortfall in the Grammys gala this year.  As previously noted, the Grammys return to New York City ended up being a seriously expensive endeavor, partly because of the amount of people flying from faraway spots like Los Angeles.  Of course, New York is also one of the most expensive cities in the world, with hotels, food, and other expenses easily breaking the bank.

We’re not clear on whether the Recording Academy permits transfers of funds from MusiCares to cover budgeting emergencies.  Or, if this really happened.   Right now, it’s just an accusation — potentially from a seriously disgruntled ex-employee.

In fact, it’s an employee that was apparently fired for misuse of funds herself.

Digging a bit deeper, Variety notes that Tomarken was shown the door over a suspicious acquisition over a MusiCares item initially up for auction.  Apparently under MusiCares policy, staffers can purchase items that fail to get auctioned, but Tomarken apparently didn’t pay for an item she acquired.

Neither side is talking to the media at this stage, and that includes the Recording Academy Board of Trustees.  Earlier, the Board backed Portnow against a firestorm of calls for his resignation on an entirely separate matter.  The demands for Portnow’s resignation followed the chairman’s urging of women to ‘step up’ if they wanted to receive more representation at the Grammys.

Portnow responded that his comments were misunderstood and misconstrued.

More as this develops.