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How an Office Romance Went Off the Rails and Brought Down the NCPA’s John Goodman

Back in June, when the National Center for Policy Analysis fired its CEO for alleged “sexual misconduct and breach of fiduciary duty,” the free-market think tank had more than a dozen directors on its board. Chief executive John C. Goodman denied the charges at the time, you might recall, and said his dismissal was based on trivialities. Today the NCPA board is down to just five directors—and insiders say the Dallas nonprofit is struggling to survive.

So, what happened to bring all this about? The apparent implosion has come as the result of an office romance between Goodman and a staffer that went way off the rails, leading to an unusual “job promotion” that backfired badly:

 

In the world of free-market think tanks, Goodman was a star. Best known as the “Father of Health Savings Accounts,” Goodman was the founding president of the 31-year-old NCPA and a nationally quoted champion of privatization, tax reform, and a consumer-driven health system. He’d advised politicians like George W. Bush and Newt Gingrich, testified before Congress, and written numerous books as well as opinion articles for The Wall Street Journal. Photos of Goodman and such Republican luminaries as Dan Quayle, Clarence Thomas, and William Bennett lined the halls of the NCPA headquarters in North Dallas.

So it came as a surprise, to put it mildly, when the think tank announced in June that its board of directors had dismissed the 68-year-old Goodman as president and CEO. Goodman told the Dallas Morning News the charges weren’t true, insisting that his ouster was the result of “trivial stuff.” Reached by phone, one board member agreed that Goodman’s dismissal was a “shocker,” but declined to comment further. Very quickly, an iron curtain of institutional silence fell over l’affaire Goodman. The NCPA appointed an interim CEO, corporate-governance expert and talk-show host Dennis McCuistion, who said that business at the 501(c)(3) nonprofit would continue as usual while a permanent replacement for Goodman was sought.

What really led to the upheaval at the venerable conservative organization, though? According to documents, emails, and interviews with multiple sources familiar with the situation, Goodman’s firing stemmed from an extraordinary arrangement that was made with an NCPA employee named Sherri Collins, after Collins accused Goodman of assaulting her in a Southern California hotel room in 2012, D CEO has learned. To avoid threatened litigation for violating “both state and federal discrimination laws” over a period of many months, Goodman agreed to promote Collins from an assistant’s position to be the NCPA’s director of human relations, at a yearly salary of $85,000, plus a guaranteed annual bonus and other  benefits, for at least three years, sources say. Collins had done “aspects of HR work” at previous jobs, NCPA spokeswoman Catherine Daniell says.

When another employee came forward this spring to protest her treatment by the HR director, as well as the “relationship” between Goodman and Collins, sources say the relationship became the focus of scrutiny by the group’s board members. For many if not most, this was the first they’d heard about it. At least one of the directors, John Strauss, raised questions about Collins’s professionalism and the California incident, asked that his six-figure contribution to the NCPA be returned, and resigned his position on the board. Eventually the HR director left the organization.

In early June, Collins, then 47, was arrested at a house in Frisco for assault and criminal mischief. According to Frisco police, Collins had assaulted a “boyfriend” (not Goodman) by trying to hit him with a fake plant and throwing things across the living room at him. It wasn’t Collins’ first brush with the law. Texas Department of Public Safety records show she had been arrested four times in North Texas between 1997 and 2009, on charges ranging from assault and theft to criminal mischief.

NCPA board members who were asked to comment for this story, including Jerry M. Mills, the board chairman, and Mike Montgomery, did not return phone calls. Neither did Strauss or Goodman. Collins referred us to her attorney, Chuck Elsey of the Elsey & Elsey law firm in Flower Mound. He didn’t respond, either. Our sources asked to remain anonymous either because they were still negotiating for NCPA severance packages, had promised “not to say anything bad against” the organization as part of a severance agreement, or did not want to jeopardize the jobs of friends still working at the think tank.

One employment-law expert briefed by D CEO on the situation, Matt Scott of Dallas’ Kendall Law Group LLP, says problems like the NCPA’s occur with some frequency in today’s workplace, especially when a successful CEO with a “fair amount of arrogance” uses the “organization as their own, to do with it what they want.” At the same time, Scott says, many smaller companies fail to take HR issues seriously, putting people with little or no experience in charge of HR. “That goes on for awhile until they cross the line and it blows up in their face,” says Scott, who has represented both management and employees in employment cases. “So, this [situation] doesn’t surprise me. …

“What is unusual, though, is to settle [a discrimination charge] by giving someone a promotion,” he goes on. “Usually the accused is gone, and the other person stays.” Someone with a criminal background like Collins’ shouldn’t have been hired in the first place, Scott adds. “A number of poor decisions were made, and these things don’t occur in a vacuum. From her hiring to the [alleged California incident to the promotion], it was a recipe for disaster,” he says. “And it sounds like that’s exactly what they had.”

Goodman had led the NCPA ever since its founding in 1983 at the University of Dallas, helping to attract more than $100 million in funding over the years from the likes of Exxon Mobil Corp., the Scaife Family Foundation, and foundations run by Charles and David Koch. For more than two decades Goodman’s wife, Jeannette Nordstrom-Goodman, also worked as a top executive at the nonprofit. (Records show the couple divorced in 2012, and Nordstrom-Goodman has relocated to Florida.) According to the group’s latest Form 990, filed for the fiscal year ended Sept. 30, 2012, the NCPA had $4.13 million in revenue and expenses of $4.92 million, while Goodman’s total compensation was $587,337 (see accompanying chart).

Goodman and the NCPA, which has a full-time staff of 22 plus a number of interns and part-time workers, hired Collins in 2011 as a “temp secretary,” a former employee says, through the Recruit Texas employment agency. No background check was done on Collins. “John liked her,” says the ex-employee. “He would rub her leg. She would smile. It seemed like two people in a relationship.”

Then came the alleged altercation in Southern California. There, the source says Collins later told her and other NCPA employees, the “hotel room was torn up” after Goodman became jealous and upset with Collins and “apparently choked her.” Afterward Collins phoned an NCPA official in Dallas about the incident, crying, and later threatened to file assault charges against Goodman, the source says.

“Settlement and release” and employment agreements resulting from the alleged incident gave Collins new status and freedom at the NCPA, the source says. Stipulations of the November 2012 agreements said that, unless the parties mutually agreed, Goodman would refrain from having any contact with Collins that wasn’t related to the duties of her job—and that he would not act or speak in any way that could be construed as discrimination or sexual harassment. As the months went by, the source says, Collins “started to display a different personality around the office.” According to the source, the HR director became increasingly “hostile, combative, and disrespectful” toward the source and other NCPA employees.  That caused the source to complain in an email to Goodman, Collins, and the think tank’s chief operating officer, Richard Walker, that the NCPA had become “a hostile work environment because of the … harassment relationship that is taking place” between Goodman and Collins.

Not long afterward, the source says, she was fired. In March, she filed a complaint with the Dallas district office of the Equal Employment Opportunity Commission. The source added that Collins also had been let go following a “meltdown” in the office and was threatening legal action against Goodman and the NCPA, aiming to be paid for three full years of work, as stipulated in her employment agreement. In a document prepared by lawyers to rebut Collins’ claims, the HR director was portrayed as the aggressor in the relationship with Goodman. The report also said Goodman believed Collins was suffering from a “multiple personality disorder.”

In July, D CEO was working to secure an interview with Goodman. But that ended July 9, when a voicemail message was left jointly by Goodman and McCuistion, the think tank’s interim CEO. Goodman said that, as part of an undisclosed agreement that had just been reached, “we really can’t say anything.” Then, in a brief formal statement, McCuistion added: “We deeply regret any differences we had with a former employee, and all disputes with her have been mutually resolved. We do not wish to comment further.”

In a press release a couple of weeks later, Mills said the NCPA had patched up its differences with Goodman and was looking forward to working with him on future projects.

 

HEFTY PAYDAY
As a percentage of expenses, the NCPA compensated its president much more generously than other conservative think tanks.

THINK TANK COMPENSATION* % OF EXPENSES

National Center for Policy Analysis, John Goodman

$450,173

9.14

Ludwig von Mises Institute, Llewellyn Rockwell Jr.

$175,078

4.77

Competitive Enterprise Institute, Fred Smith Jr.

$236,300

4.38

Manhattan Institute, Lawrence Mone

$453,104

3.37

Cato Institute, Edward Crane

$466,872

2.08

American Enterprise Institute, Arthur Brooks

$637,500

2.00

Heritage Foundation, Edwin Feulner

$1,162,696

1.42 

 

*Base, bonus, and incentive compensation only. Does not include nontaxable benefits or retirement and other deferred compensation. Source: Charity Navigator, latest fiscal year available.

A version of this story appears in the September issue of D CEO, which also features a cover story about five of the most powerful businesswomen in Dallas. The issue will be mailed to subscribers and appear on bookstore newsstands at the end of the week.

45 comments on “How an Office Romance Went Off the Rails and Brought Down the NCPA’s John Goodman

  1. That place sounds like a hot flaming mess. I wonder if Richard Walker, the COO that was part of the cover up is still working there?

  2. He definitely needs to be fired to… And I wonder what the source who was fired who went through all of was compensated.. Sounds like they need something fir the President and COO to be so incompetent!

  3. I don’t think he can be fired because I hear he has some shady contract similar to that of Sherri Collins. I hear he’s now retaliating on anyone that exposed him in this debacle.

  4. This article is an interesting take — way to blast the NCPA for incompetence (seems deserved), but it sounds like only one person in this story assaulted a coworker and needed to execute an elaborate cover-up that ultimately blew up their business. And that person isn’t Sherri Collins.

  5. Is “bunny boiler” two words. Or is it hyphenated. I’m asking for a friend.

  6. The COO is a stand up guy…..it’s the board that should be called into question….they govern the organzation

  7. This story depends on anonymous sources with axes to grind. Just no way to know how much of it is true.

  8. Yes- I agree. I’ve been to
    Many of their events and Mr. Walker does not seem like the type of person that would be behind something like this. He has been there for many years and has done a wonderful job running the organization. If anything I feel bad for the guy dealing with all of this-it sounds like a nightmare on his part.

  9. John Goodman has a practice of commenting on his own blog using a pseudonym. I’m guessing that Erica Cane is actually John Goodman. Come to think of it, Maria J. is probably John Goodman too.

  10. I am sure there are witnesses to this information.. Documented facts apparently.. DMagazine could not post based on fake info..

  11. The writer could have be given inaccurate information by disgruntled employees or people that don’t have 1st hand knowledge, they may just be repeating things they have heard 3rd hand.

  12. They were all on their best behavior at events as they should be to attract donors with money. The COO Richard Walker should be let go also being he knew this was all going on! Shame on him and the board of directors for allowing this kind of treatment to their employees!!!!! DMagazine has all the facts and would not publish info that was not verified and correct. Glad they both got what was a long time in coming!

  13. I’m hearing from an inside source that Richard Walker was the executive called after the assault and he did nothing to remedy the situation. He gets a $60K a year bonus if he covers for John and makes sure nothing gets out. he did a good job of keeping it under wraps for a year or two. I think an officer of an organization has an obligation to notify the board and to protect the employees.

  14. It appears someone is out for revenge here in the comments section. Misery loves company.

    As a free market think tank, NCPA ought to ask itself what the free market would do in this instance. Would the free market hold the bad actors responsible for their own bad behavior? Or would the free market look for a scapegoat to blame? According to the DMagazine story, NCPA has removed the bad actors. Now the free market will determine whether NCPA sinks or swims. Recriminations have no place at a free market think tank.

  15. Check the published article in the D CEO magazine comes out today, I have heard there will be some documents that prove the story…

  16. I’ve known Richard Walker for more than 15 years, and worked with him at the NCPA. These accusations sound really out of character for the gentleman that I know, who was also responsible for cleaning up a big mess at Keller ISD when he was Board President. It’s really sad to see what’s happened over there. Whether you like the NCPA’s policy ideas or not, they brought numerous world leaders to Dallas through the Hatton Summers lectures they sponsored each year. Those were always some of the best events that happened in the city. Hopefully, the organization will be able to transform itself in the wake of this unfortunate episode. There are some great people who work there, and it would be too bad if they had to suffer for the actions of somebody else. There’s also a good lesson here for any organization that becomes too dependent on one individual…

  17. I agree that the NCPA is a great organization. It has just suffered from poor leadership. With two corrupt leaders at the top that place didn’t stand a chance. John Goodman was collecting a $500k/year salary and Richard Walker close to $250k/yr. The saddest part is all the scholars and researchers there doing the real policy work and making the real change in public policy were being paid peanuts. They don’t even get matching 401k or any real benefits while the fat cats have these huge retirement plans and employment contracts. Just sad all the way around. Hopefully they clean house and start an honest organization. I used to donate $10K a year to them but after hearing about this, I feel my money could be spent on a much better cause.

  18. I’m just appalled that people associated with that scandal are still working there. I’ve seen the contracts and Richard Walker is listed as one of the executives that harassed Miss. Collins. It wouldn’t surprise me one bit why he would want to cover this up. I refuse to donate to them again until that whole management level is fixed. Can’t leave old dirt in there and expect anything better. Just a shame because I really liked the NCPA and what they do in public policy.

  19. As if NCPA lets random people named James P see their employment contacts! Ha! Sounds like John Goodman is trolling in here.

  20. This Joe S. sounds just like that Richard Walker character. I’m sorry if my opinion of Richard covering up this whole scandal from the employees and the BOD bothers him. Just as a long term donor I can’t continue to support an organization that is still ran by an inept COO. They really need to do a major overhaul to get donors like myself engaged again.

  21. I’m sorry, but there’s so much more going on here. Clearly John Goodman and Sherri Collins are in the wrong and have been terminated rightfully so. But I smell a rat (or rats) still lurking. I don’t question the integrity of Mr. Hunter or DMagazine; I believe there’s truth to this story and probably much more beneath it. I also suspect this wall is riddled with some folks currently affiliated with the organization who are on damage control. Here are my hang-ups:

    – “Afterward Collins phoned an NCPA official in Dallas about the incident, crying, and later threatened to file assault charges against Goodman, the source says.” Who did she phone and why didn’t said person report it?

    – “That caused the source to complain in an email to Goodman, Collins, and the think tank’s chief operating officer, Richard Walker, that the NCPA had become “a hostile work environment because of the … harassment relationship that is taking place” between Goodman and Collins. Not long afterward, the source says, she was fired.” Why was the source fired?

    – Why hasn’t Mr. Goodman, the NCPA, Mr. Walker et al countered with any perspective on all of this? Sorry, if someone came out with an article as damning as this towards me or the organization I work for, I’d stop at nothing to state the truth.

    Just my two cents folks. There are clearly some major issues here and I don’t think they’re settled yet. I never donated to them but am very unlikely to ever consider doing so, especially after seeing the Mr. Goodman’s annual salary was almost 10% of their operating expenses.

  22. I seriously doubt James P is an actual donor. Most folks who donate to think tanks are wealthy and successful business people. His poor grammar belies that fact!

  23. This is pure nonsense. Sane adults don’t try to blame other people for their own bad behavior. And if James P is who I think he is, all the worse because John Goodman always professed to be a live-and-let-live libertarian. So much for that notion!

  24. Richard Walker never harassed Sherri Collins. That is a libelous statement on your part and completely unfounded. As a former employee of the NCPA, I was witness to what went on, and I can say with absolute, first-hand conviction that the blame lies with John Goodman and Sherri Collins. Period.

  25. Josh, you simply cannot know what went on. I do. I am a former NCPA employee. I worked for the NCPA for 5 years and worked with John Goodman on a daily basis, as I ran his health care blog. I was there when everything went down. The details of this situation are far more complex than any “tell-all” article on D Magazine could EVER reveal. There are definitely “some major issues here” but you are not in a position to know enough about them to comment with any authority.

  26. And yes, I am using my real name (and photo) to comment, unlike ANYONE else on this comment thread.

  27. Richard Walker never harassed Sherri Collins. I know that for a fact. I am a former NCPA employee. I worked there for 5 years and worked very closely with John Goodman and Richard Walker on a daily basis. Richard is not in the wrong here. As I mentioned to “Josh” below, the situation is far more complex that any “tell-all” article could ever describe. The fact is, if you were not an employee of the NCPA during the time this “situation” was happening, you have no right to comment with such audacity and conviction.

    I love the NCPA and all that it stands for, even though I have moved on. The sad thing is, the loyal employees that remain are the ones who should be given the limelight. They work very hard and are dedicated to the organization and the work that it does, and they continue to do so even though the name of the NCPA is being dragged through this mess. It’s time to put the blame where it lies. With Goodman and Collins. Period.

  28. “Erica Cane,” there was no cover up, as you so eloquently put it. Sounds to me like you have an agenda. Care to share what that is? BTW, nice “Dallas” soap opera pseudonym you have for yourself there…stay classy.

  29. Erica, there was no cover up by Richard Walker, as you so “eloquently” put it. One has to wonder, though…what’s your agenda in commenting? Curious minds want to know. Really. We’re waiting….

    And by the way, nice reference on your “name” to the TV show, All My Children. Stay classy. No one will ever guess that you’re a troll.

  30. Ooo, going right for the jugular with the “not ‘hot’ enough to hit on” comment. I’m hurt. Wounded. I never said I wasn’t bitter about the John and Sherri thing or that I left for any other reason than the environment they created. I’m fairly certain who I’m replying to here…your last name suits you.

  31. What a lively discussion! Wondering, was psychiatric consult/care a part of the benefits package offered to employees there?

  32. Josh I honestly doubt that place can afford anything. They can barely make payroll from what I hear. I highly doubt any real policy analysis is being done with all of this going on. Looks like they have lost 80% of their board. From 14 members to 3? That’s just crazy.

  33. Wow, there are lots of false rumors being spread in here. Apparently, you can leave NCPA, but you can’t leave NCPA alone. This isn’t Junior High. Grow up and keep moving forward. We’ll call you in 10 years for the next reunion.

  34. Like many of the critics who commented above, Ms. “Flake” is in error on numerous fronts. Her speculation is misinformed, her facts are wrong and her numbers fabricated. NCPA staff are hard-working and continue to publish research, hold Congressional briefings, and coordinate events without interruption. The board of directors is dedicated and enthusiastic. There is nothing “going on” but a lot of hard work, with collective eyes on the future.

  35. Like many of the critics who commented above, Ms. “Flake” is in error on numerous fronts. Her speculation is misinformed, her facts are wrong and her numbers fabricated. The NCPA staff is hard-working and continues to publish research, hold Congressional briefings, and coordinate events without interruption. The board of directors is dedicated and enthusiastic. There is nothing “going on” but a lot of hard work, with collective eyes on the future.

  36. Catherine Daniell I see you do their media relations. So can you tell me the number of board members the NCPA has lost this year? Also please elaborate on those diminishing financials numbers as well? Please feel free to make a statement on any other errors you feel have been made. You my dear are a joke of a PR person.

  37. I’ve been traveling and missed this story when it came out. But I know some folks at the NCPA. It seems from what I know of the organization and the people there that Walker’s most egregious act was that he fired the source in the story for cause. So let me ask what to me is an obvious question: the source gets fired, THEN comes forward? Wouldn’t that presume that the unnamed source had in-depth knowledge about all of this? So why not come forward BEFORE being fired? That’s strange, don’t you think? Don’t you think it’s also strange that the supporters of the NCPA signed their full names to their posts while every one of the critics on this blog hide and won’t reveal theirs. That speaks volumes to me. I’ve been associated with the NCPA on and off over the years. I knew Goodman and Collins slightly, and I’m pretty sure I know the critics. And I think by now that should be obvious to any sane, reasoning individual who reads their comments. Let’s just say this: any farmer knows a road apple loses its stench when exposed to fresh air and sunshine. Let’s hope some of the road apples laid in this string of posts someday are exposed to that same “fresh air” scrutiny.

  38. Obviously the source came forward and as the story says, told the COO about the hostile work environment for months. Nothing apparently happened, many were fired or quit because their concerns were ignored. Finally the source reported information to the board…Goodman was investigated and than finally fired…and the rest is history….

  39. I don’t think you’ll be eligible for rehire after a comment like that. Hope you weren’t looking for a reference. Sounds like you got some stories.