The Dangerous Side of Giving - H 2015
AP ImagesEva Longoria, Two “Philanthropreneurs” and the Dangers of Hollywood Charity: THR Investigates
Eva Longoria has helped raise millions for causes around the world with the help of two best friends who call themselves her 'soul sisters' — women who can attract big stars, big money and (judging by their accounting) big problems.
The news came on the heels of Longoria’s production company UnbeliEVAble Entertainment’s hot streak this past development season, with eight projects sold — everything from a supernatural drama to a musical comedy. When the star is not assiduously tending to her business brand, she either is cozying up with her handsome mogul boyfriend, Jose Antonio Baston — the 45-year-old president of Televisa, Latin America’s largest media company — or, as her philanthropy guru Trevor Neilson (who has advised Bono and Angelina Jolie) explains, she can be found “down on the border on immigration issues.”
With admirable results, the well-liked Longoria has leveraged her wealth (Forbes ranked her as primetime’s fourth top-earning woman in 2011, with an estimated annual income of $12 million) and profile for greater good. She has become known in recent years for her highly publicized work in liberal politics and immigration, emerging as a key voice on immigrant rights and campaigning against Arizona’s show-your-papers bill, SB 1070, as well as for President Obama‘s re-election, during which time she became one of his top bundlers and eventually spoke at the Democratic National Convention. Longoria’s altruism has, along with her glamour, fame and political advocacy, earned her near-saint status in the Spanish-speaking world.
Rare downtime also is spent with her glamorous best friends, Maria Bravo, 47, and Alina Peralta, 37. They run the series of Global Gift Galas, for which she serves as honorary chair and host. She refers to the women as her “gang” of “girls.” They call her “Evita,” considering themselves her “soul sisters.” On social media, they all document a world of public flash — those jewels are real, and they’re spectacular — intertwined with big-ticket philanthropy. They pose with the likes of Supreme Court Justice Sonia Sotomayor and billionaire Mexican mogul Carlos Slim. They can be found modeling primly in matching lavender bridesmaid dresses or laughingly in beach cover-ups, celebrating in private planes and in the hospital. (Longoria, pictured six months ago on Instagram holding a swaddled child next to a newly postpartum Peralta, congratulated her and her husband in a caption “for making another beautiful baby boy!”) They relax poolside at a luxury tropical resort, touch down in Paris to prep for another celebrity-studded red-carpet ball and then they’re off to the Middle East: “Dubai here we come!!!”
A champagne-soaked party in the emirate, held on Dec. 14 at the world’s largest horse-racing track, was a typical Global Gift affair, catering to about 400 local society figures who were looking to mingle with a few boldfaced names for $680 a ticket. It was curated for the demographic able to bid up “experiences” — a weekend aboard a superyacht during the Monaco Grand Prix or a trip into near-Earth orbit.
Subsequent press releases and news reports touted that “the live auction raised $400,000 for good causes.” But while Bravo and Peralta claim that “100 percent”of the money that came into the foundation in 2014 went to “philanthropic projects,” when asked by THR for substantiation of where the money from auction donations and ticket sales for the Dubai event (a number that appears to exceed $500,000) went, Bravo turned over a spreadsheet that documented $166,883 donated to two Dubai charities. Where is the rest of the money?
Global Gift sent this spreadsheet of its internal accounting numbers to THR. (click above to enlarge image)
When examining the financial dealings of the Global Gift Galas, this question, it seems, comes up a lot.
By now, it’s a cliche: the celebrity-affiliated charity undercut by its lack of attention to detail. (Madonna‘s Raising Malawi board members misusing $3.8 million earmarked for a girls’ school under her watch and Wyclef Jean‘s camp’s decision to divert $100,000 of his Yele Haiti Foundation funds to pay for his performance at a benefit concert he organized are two examples cited by philanthropy experts.) Yes, it’s tough to raise eyebrows in a town where creative accounting reigns. Still, philanthropy is embedded in the culture of Hollywood — after all, the events and affiliations are part networking opportunity, part guilt-easing and part image-building for talent and executives. On any given night, there are seemingly innumerable industry events with a charity beneficiary to attend. Internationally, it might be a Global Gift Gala. With six events per year, the glittering affairs are populated by such stars as Jane Fonda, Ricky Martin, will.i.am and Victoria and David Beckham.
Yet, in an investigation by The Hollywood Reporter of the Global Gift enterprise, a frustrating pattern of opaque accounting and practices that raise questions emerges — as does a tangled story that includes a falling-out with Antonio Banderas, accusations of misrepresentation from Harry Winston and questions about whether Bravo and Peralta personally profited from millions in contributed funds.
LONGORIA MET PERALTA ABOUT 15 YEARS AGO, when Longoria moved to Los Angeles as a freshly minted Miss Corpus Christi with an acting dream. She connected with Bravo — an occasional actress who is scheduled to appear on Mexican television opposite Terrence Howard in the series Hada Madrina (Fairy Godmother) later this year — in 2003, when they co-starred in Carlita’s Secret, a low-budget noir thriller that was released straight-to-DVD in 2004, the year Desperate Housewives debuted on ABC. In the film, Longoria plays an aspiring dancer and Bravo a nightclub owner; they navigate the treacheries of bad-news boyfriends and drug-related violence while coming to terms with their own burgeoning private intimacies through stolen-yet-lingering kisses.
Bravo first came to global attention in 2000 because of her two-year relationship with Bruce Willis in the aftermath of his split with Demi Moore. The pairing brought her unforgiving scrutiny, with People writing that her father reportedly had been convicted three times in Spain for dealing drugs and her mother once had run a “seedy strip bar called La Reina.”
At 24, Bravo wed John Pierre Gonyou, a Canadian helicopter pilot turned Jordan Belfort-esque finance player. Gonyou, who died in 2002, was identified by the press as a “share-pusher,” with links to unscrupulous broker firms in multiple countries. In 2001, the Thailand Securities and Exchange Commission issued a report detailing “ongoing criminal proceedings,” naming Gonyou and Bravo among a group of individuals involved in a “case of boiler room operation” in which the accused allegedly engaged in a securities business “without having licenses.”
Thailand’s Securities and Exchange Commission released this annual report in 2001, which named Maria Bravo and her then-husband Pierre Gonyou in a “case of boiler room operation” on page 69 of a section detailing “criminal proceedings on major cases.” (click above to enlarge image)
Bravo, who has said that she was trained as a stockbroker, denies the claims, notes that she’s never been convicted and says her involvement was “blown out of proportion because it was attractive to create controversy as I was dating Bruce Willis at that time.” Her attorney, Andrew Zucker (who also represents Longoria’s management firm, Brillstein), adds, “We trust that if Thai authorities were interested in charging Ms. Bravo with a crime or seeking civil actions against her that they would have done so already.”
Bravo, who has said she’s “half gypsy,” modeled early in her career and appeared on a short-lived 2010 reality TV show that aired in Spain about glamorous Spanish-born women in Los Angeles, called Casadas con Hollywood. In more recent years, when not busy working as a spokeswoman for the Spain launch of adultery-facilitating website Ashley Madison in 2011 (the company tells THR that “subsequently she did not honor the full terms of that contract”), she came to reposition herself as a self-styled “philanthropreneur,” as she puts it on GGF’s website. Bravo teamed with Peralta, a Nicaraguan emigre who grew up in Southern California and began her career in the executive headhunting sector, to launch MandA. On Casadas, Bravo observed that securing celebrity support for charitable endeavors “isn’t so easy” because what they’re donating “is their time, which is very important.” Yet, she noted, she succeeds “because I have personal relationships.”
First among them is hers with Longoria, who is so close to Bravo and Peralta that for stretches she’s had them living with her as housemates. “How did I get involved in the galas?” Longoria says. “They asked me, I said yes.”
Longoria’s philanthropic efforts are extensive — supporting such causes as the National Center for Missing & Exploited Children; PADRES Contra El Cancer, a nonprofit focused on Latino children with cancer and their families; and Eva’s Heroes, a charity supporting developmentally disabled children that she co-founded in 2006. And her own Eva Longoria Foundation, focused on economic and educational empowerment of Latinas, is the big beneficiary of the Global Gift Galas. U.S. media outlets, including THR, which in 2009 named her its Philanthropist of the Year, have helped burnish her image as a quintessential Hollywood do-gooder.
Nothing in THR‘s reporting indicates any wrongdoing by Longoria or ELF, and there’s no doubt that her association with Bravo and Peralta has resulted in undeniable benefit to ELF, bringing the organization $1.3 million in just three years. “I am grateful for the funds that have been raised,” she tells THR.
BRAVO AND PERALTA HAVE PROCLAIMED TO DONORS AND THE PUBLIC THAT NEARLY ALL OF THE MONEY THEY RAISE GOES TO A GOOD CAUSE, but they are quiet about how they make money through their event-production company, MandA, which the foundations hire to stage the galas, and about their for-profit limited company that sells advertising and sponsorships for the events. They assert that MandA produces events for rates that are “far below industry standard” and that the limited company manages all expenses for the events so “all donations are untouched.”
Bravo and Peralta run the four organizations depicted above. All of them play a role in the execution and finances of Global Gift Galas. Because these entities are private and based in two countries, the finances are less transparent than most U.S. charities. Global Gift provided THR with its own detailed explanation of its operational structure and history here. See page 4 for its organizational chart. (click above to enlarge image)
While Global Gift attendees and donors might think they are participating in a purely philanthropic affair, they are providing funds to an intertwined group of entities run by the two women. Yet, operating in California, GGF must comply with California’s Corporation Code section 5233, which regulates self-dealing within charities and forbids transactions of “unjustified favoritism” in cases “in which one or more of its directors has a material financial interest” and “results in a benefit” to them.
PDF: Audemars Piguet sponsorship proposal THR obtained this sponsorship proposal created by Global Gift. It contains an explicit claim that the organization had raised $16 million for charity by 2013.
Richard Marker, an NYU professor and co-principal of Wise Philanthropy, agrees. “People have an expectation that there will be a level of accountability,” he says. “There’s no question that it doesn’t pass the smell test.”
Questioned extensively over the course of 15 days by THR, Bravo and Peralta insist they are “trustworthy, honorable people” and continue to claim THR‘s concerns are due to a misunderstanding, in large part derived by ignorance of the nuances of the contemporary “charitable industry.”
In 2013, GGF simultaneously registered as a nonprofit in California and in the province of Malaga, Spain. “The international dimension here complicates things,” says James M. Ferris, director of the Center on Philanthropy and Public Policy at USC.
Specifically, GGF is based in Bravo’s hometown of Marbella, an affluent resort area along the Costa del Sol. These days, it’s well known within Spain for pervasive municipal corruption, highlighted by a years-long bribery and fraud scandal related to a real estate boom — which ended in 2013 in dozens of convictions — that ensnared a trio of ex-mayors and about 20 council members.
THR spoke to several individuals who have worked in various capacities with Global Gift during its nascence in Marbella and claim that the organization burned bridges because of its practices. (Another gala in town, Starlite, which is co-led by Banderas, parted ways with Bravo and Peralta because of a conflict about approach; Starlite declined comment. Meanwhile, Marbella’s Dynamic gym stopped working with the pair on a walkathon due to, says the business, “different concepts as to what is philanthropy.”)
Most of these sources would not go on the record for fear of retribution. “Marbella is a very small town,” says one. “In Marbella, everyone knows Maria Bravo.” Another explains that the duo rankled others because they weren’t transparent about their profit-making intentions: “It’s wonderful that you have a company that you want to use to help so many people with so many problems. I’m happy for you. But don’t come here like God’s messenger because you have a foundation. Because you are a business.”
Spanish nonprofit law experts note that Spanish oversight is — even compared to its lackluster American counterpart — slow, lax and solely reactive. “We do not have a good system,” says Juan Cruz Alli, administrative law professor at UNED Madrid. He notes that while charities like GGF must file ministry paperwork regarding their accounting, in practice the documents are nearly impossible to review, kept off the Internet (in the U.S., IRS 990 forms are easily searchable online via the free service GuideStar) and at arm’s length by often indifferent low-level bureaucrats. “They are available to be seen — but who knows where?”
BRAVO AND PERALTA PROVIDED THR WITH A SPREADSHEET TO SUMMARIZE THEIR FINANCIAL DEALINGS as well as supporting materials such as donation certificates. But when THR scrutinized these documents along with published reports, tax documents and other subsequent statements, numerous questions arose — many of which Bravo and Peralta could not answer satisfactorily.
News reports and press releases indicate that Bravo and Peralta have helped raise $19.5 million since 2009; the two women stand by this figure. In their spreadsheet, the duo claim that exactly $17,739,205 was raised after promotional revenue (which covers event costs) was deducted — meaning that total claimed overhead for all the events they ever put on was less than $2 million.
Yet when pressed about confusing numbers for 2013 — only a few weeks ago, their website touted that their 2013 events raised $3.4 million for philanthropy, but after inquiries by THR they now say that only $1,349,212 was donated — Bravo asserted that the larger figure merely was a communication error and thanked THR for helping to clear up the confusion. Yet if this were true, either their overhead for 2013 alone was greater than what they a week earlier had documented for a six-year period or they have serious accounting issues.
In another instance, going back to the years between 2009 and 2011, the pair worked with an obscure North American charity called Rally for Kids With Cancer, during which time Bravo and Peralta claim they raised $3.8 million for its U.S. affiliate. But IRS 990 income tax forms from those years indicate Rally for Kids raised only $1.4 million. Presented with this information, Bravo, identified on the 2011 form as Rally for Kids’ executive director, asserts that she had no access nor control of funds during her time there and posited that Rally for Kids finally qualifying as a 501(c)(3) tax-exempt organization in 2010 might have something to do with “why the 990s do not correlate with the numbers provided.”
PDF: Rally for Kids With Cancer 990 forms, 2009, 2010, 2011 These publicly available IRS 990 forms from the nonprofit Rally for Kids With Cancer list Maria Bravo as a board member and indicate that its own financial claims to the federal government between 2009 and 2011 fall far short of the amount Global Gift claims in accounting provided to THR.
The discrepancies between tax documents and Bravo and Peralta’s own accounting raise questions. The big one: Did they present THR with a financial summary that does not fully address how much revenue their Global Gift empire has generated? Since they haven’t turned over audited financial statements, it’s hard to know for sure.
In one communication, Bravo and Peralta claimed that in 2013, 88.6 percent of all income into the foundation was used for “philanthropic projects” and that 100 percent went to philanthropy in 2014. For these two years, they provided THR with event-by-event accounting of each Global Gift Gala. But if these totals are cross-referenced with press releases and news reports that discuss revenue figures, the numbers don’t line up time after time. At the 2013 event in Cannes, for instance, a GGF press release says the event raised more than €400,000 (about $515,000 at the time) and that “all proceeds will be divided evenly” between the Eva Longoria Foundation and a charity called Children for Peace. Yet in its spreadsheet, GGF reports a $75,382 donation to Children for Peace. (GGF donated a total of $604,000 to the Eva Longoria Foundation in 2013 and did not detail how it was distributed among the year’s six events.) At the 2013 event in Dubai, GGF gave $100,000 to ELF as well as other donations of $172,000, while reports indicate that more than $540,000 was raised by ticket sales and live auctions. (Of course, as with any donation-driven charity, a percentage of promised funds might not come through.)
The pair claim to pay themselves a €60,000 (about $68,000) salary apiece. Yet there’s no way to corroborate this, as is standard in the charitable sector. They also do not mention $30,000 salaries for each of them that are notated on the 1023 tax form for their U.S. foundation. THR asked Bravo and Peralta to share how much they make from the Global Gift enterprises. Bravo’s reply: “Our income is reflected in our federal tax returns; in which are personal and private documents and are not available for publication.” Nor would they discuss how much revenue and profit their event-management firm and limited company have made.
PDF: Global Gift 1023 form This publicly available IRS 1023 form shows that Maria Bravo signed this 501(c)(3) registration document on Nov. 21, 2013 — three days after Global Gift entered into an agreement with Harry Winston with the understanding between the two parties that it already was a registered U.S. nonprofit in good standing.
In the end, however, Bravo and Peralta did ask for a meeting with THR to explain themselves on their terms. On the rainy afternoon of Jan. 26, they convened at BLD restaurant on Beverly Boulevard, dressed down in sneakers and T-shirts, hair pulled back, smiling warmly. The charming pair — Bravo deeply accented, Peralta not — insist they merely are “professional beggars” who honestly came by an efficient, next-generation charity model.
While acknowledging that they need to change how they talk about what they do (Peralta: “You’ve shed a lot of light into it”), including clearing up the language on their website (Bravo: “We absolutely will!”), they held firm that there’s nothing wrong with their modus operandi. They argued that it’s enough that their supporters are told “where their money is being spent; we show them pictures.” Adds Bravo, “I don’t think people get so much involved in the structure.” And as for any conflict of interest in board members hiring their own firm at an undisclosed price, they dismiss the concern, saying that they would only trust their own event-planning expertise to carry out as sophisticated an endeavor as a Global Gift Gala.
The next day, the duo took a new tack, hiring top Hollywood crisis PR manager Howard Bragman (who also is the vice chair of search-engine-scrubbing service Reputation.com) and sending THR a detailed, quasi-academic missive that placed their endeavor within the context of “companies that make the world a better place through a hybrid for-profit/nonprofit business model, a common and growing structure. While some of these companies have a tangible product (e.g., Toms shoes), our product is event planning.” They then went on to cite a Duke University white paper on the blurring of boundaries between government agencies, nonprofits and social entrepreneurs, and a TED Talk by Dan Pallotta, a controversial figure in the altruism arena (the nonprofit he once ran dramatically shuttered in 2002, prompting lawsuits) who argues that charities should act more like corporations.
“THERE ARE UNUSUALLY HIGH INCIDENCES OF TROUBLE WITH CELEBRITY CHARITIES, which are often created for image reasons and put in the hands of people who aren’t experts, who don’t have any accountability,” says Ken Stern, author of With Charity for All: Why Charities Are Failing and a Better Way to Give and the former CEO of nonprofit NPR. Observes Marker: “People in the entertainment industry, their capital is their name. The problem is that many are willing to lend their name but aren’t sophisticated enough to realize that they’re being manipulated. They aren’t dumb, but their business is to be an entertainer, not to be a philanthropist.”
The Center for Effective Philanthropy’s Buchanan, for one, believes that Longoria, in her long-term and high-profile role as GGF’s public face, has a responsibility to donors to ensure that the nonprofit in this case is upstanding. “My hope is that if you’re a celebrity lending your name to an organization, you’re asking questions about the amount raised and where the money is going,” he says. “It doesn’t seem like an unreasonable expectation.”
PDF: Global Gift 990 form This publicly available IRS 990 form shows that Global Gift finally received its 501(c)(3) designation in 2014, too late to save the Harry Winston deal.
Andreas Kutzer, the co-owner of a firm called Optikal Noize that specializes in forging sponsor partnerships between luxury brands and nonprofits, says he attempted to make Longoria’s publicist Liza Anderson and philanthropy adviser Neilson aware of problems he had discovered with Bravo and Peralta’s operation after his own falling-out with the pair over a scotched deal involving Harry Winston in early 2014. (Optikal Noize and GGF currently are embroiled in a legal fight to sort out their own relationship’s denouement.) But he claims to have been rebuffed by Anderson personally and that he only was allowed to leave a message with Neilson’s assistant. (The venerable jeweler withdrew from the intended deal, according to a legal letter obtained by THR, because the nonprofit had “misrepresented” that it was “already recognized” as a 501(c)(3) in the U.S. when it had not yet been — Harry Winston required the 501(c)(3) status for its corporate tax deduction — “and then hastily tried to file the required documents a few days later.”)
THR obtained this legal letter sent by the Swatch Group, parent company to Harry Winston, to Global Gift, in which the luxury firm claims that the philanthropic organization had “misrepresented” itself. (click above to enlarge image)
“[My partner Nancy Epao and I] met Liza in person and told her,” says Kutzer. “She said, ‘It took me over 12 years to make Eva look like an angel in Hollywood.’ Those were her words.” As for Neilson: “Trevor had an obligation as a consultant to have taken this more seriously.” (“Andreas met with me in our offices for about an hour and told me about his concerns,” says Anderson. “I wasn’t able to address any of his issues since I wasn’t familiar with any of his agreements with GGF or any other aspects of their relationship.” For his part, Neilson says he was disinclined to listen since Kutzer had previously attempted to draw ELF into Optikal Noize’s scuffle with GGF, which he saw as unfounded.)
For her part, Longoria’s view of the situation has evolved since THR brought its reporting to her attention. When she was first approached for comment, Longoria responded, “There is no merit to questions raised. The only concern I have is how a reputable publication like THR would be in the business of an ‘exposé.’ ” But her position soon shifted as more details began to emerge: “I am glad to hear that Global Gift Gala is improving the effectiveness of its operations.”
Not just government regulators and prominent supporters, of course, share the responsibility to watchdog the sector. “You have to do your own due diligence, you have to do your own research,’ says USC’s Ferris. Agrees Elie Hassenfeld, co-executive director at nonprofit charity evaluator GiveWell: “Donors don’t demand [accountability and transparency] for the most part. If donors collectively demanded it, it would be incentivized. Oftentimes donors only expect to hear good news from charities. It’s like a fantasy. It’s not asking for reality. It’s asking for fiction.”
Additional reporting by Pamela Rolfe in Spain.
This story first appeared in the Feb. 13 issue of The Hollywood Reporter magazine.
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