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Tonawanda Coke CEO earns $400 an hour from his own charity

The chief executive of convicted polluter Tonawanda Coke has collected around $40,000 a year from his family’s foundation — for working two hours a week, according to the nonprofit’s annual reports to New York 's Charities Bureau.

Paul A. Saffrin of Tonawanda Coke collected $37,500 as a trustee in 2015 and $42,500 the following year, according to the documents. That worked out to more than $400 an hour in 2016.

Foundation records for 2017 are not yet available to the public.

The foundation, begun by Saffrin’s grandfather in 2007, didn’t pay Saffrin or any other trustee until after the grandfather died in 2014. The grandfather, former Tonawanda Coke chief executive J.D. Crane, had called it the Crane Family Foundation. It is now the Paul A. Saffrin Foundation.

Tonawanda Coke filed for bankruptcy and closed last month, saying it ran out of money. The company, which for decades made a fuel used by steel mills, was convicted of environmental crimes in 2013. A judge called its conduct "singularly inexcusable" and ordered $25 million in fines and community-service payments for violating the Clean Air Act and other laws.

Reached at Tonawanda Coke, Saffrin would not say why he has drawn more than $400 an hour as a foundation trustee.

“I have no comments for any of your questions,” he said.

As Tonawanda Coke plans shutdown, activists breathe easier: 'This is the end'

The Internal Revenue Service discourages directors of private foundations from receiving compensation. The IRS calls them "disqualified persons" and says any payment to them is "generally an act of self-dealing." But the agency rule goes on to say they can be paid for "personal services that are reasonable and necessary to carry out the foundation's purposes."

The question with Saffrin, says the president of a charity watchdog group, is what he did to earn his payment.

"What is he really getting paid for?" asked Daniel Borochoff, the president of Chicago-based CharityWatch, formerly known as the American Institute of Philanthropy.

Contaminated site

The Saffrin Foundation is in greater focus now that Tonawanda Coke has closed and filed for bankruptcy, meaning it is less likely to clean up the River Road factory that rained dangerous chemicals and, according to inspectors, harbors byproducts that can spill into waterways.

Some people think that if Tonawanda Coke cannot pay for a cleanup, the Saffrin Foundation should step up.

"We think the Saffrin Foundation should be held accountable," said Rebecca Newberry, executive director of the Clean Air Coalition of Western New York. If Tonawanda Coke cannot make its property safe, the burden would likely fall to the state, creating an injustice to New York taxpayers, she said.

(Derek Gee/News file photo)

Tonawanda Coke once said it "strives to provide a safe environment for its employees and the surrounding communities." But there are signs it won't be paying for a cleanup. Consider the story that an environmental engineer with the federal Environmental Protection Agency, Harish Patel, told in court papers about a company moat filled with toxic byproducts.

"I asked what Tonawanda Coke Corp. planned to do with that liquid, and they indicated that they were going to leave it as it was when they left the facility because they don’t have the money to pump it out,” Patel said. “If the moat overflows during a rain event … contaminated water may eventually go into the Niagara River.”

For more than year, Tonawanda Coke relied on borrowed money to pay its fines. Its final $2 million community-service payment remains unpaid because Honeywell International declined to lend Tonawanda Coke the funds as the company faced further enforcement actions.

Newberry and another critic of Tonawanda Coke, Jackie James-Creedon of the Citizen Science Community Resources organization, have spotlighted the Paul A. Saffrin Foundation before. When it announced a $1 million donation for construction of the new Explore and More Children's Museum and a $1 million donation for Daemen College, where Saffrin is a trustee, Creedon issued a statement in 2016: "Wouldn't it be logical," she said, "to donate this money to the people that have been harmed by the company's pollution first?"

Two of three

When Crane began the Crane Family Foundation in 2007, he made Saffrin, the grandson he was grooming to run the company, a trustee. For years, Saffrin collected no pay for the two hours a week he averaged on foundation business, according to the charity's documents. Crane and the other trustees collected no pay either.

But after Crane's death in 2014, two of the three trustees started collecting pay: Saffrin and Gregory M. Ward of Dearborn, Mich. Foundation records indicate Ward collected $7,500 in 2015 and again in 2016 while averaging one hour a week on foundation matters.

The third trustee, Hodgson Russ lawyer Catherine B. Eberl, did not draw a salary. Eberl did not respond to a telephone message and an email sent to ask her about the foundation.

Saffrin's pay as a trustee for a charity with about $8 million in assets appears generous when looking at larger and smaller foundations in the area. The Oishei Foundation, for example, had almost $266 million in assets at the end of 2016, the Tower Family Fund had about $67 million and the much smaller Corwin Foundation about $570,000.

None paid a trustee anywhere near $400 an hour, if they were paid at all.

IRS guidance

In citing the reasons for which a director can be paid, the IRS cites as examples a director who manages its investments.

But CharityWatch's Borochoff, who looked at the Saffrin Foundation's documents at the request of The Buffalo News, saw the foundation pays a company to manage the investments. Saffrin is not a lawyer, so he doesn't provide legal services, and he doesn't manage the books. Those are in Eberl's care.

Sometimes, Borochoff said, directors are paid for specialized tasks — investigating potential grant recipients, for example. But the Saffrin Foundation's grants have been uniform in recent years.

In 2014, it granted money to four recipients. The largest sums went to Daemen College, the Hope for Tomorrow Foundation in Williamsville, which works to provide reconstructive surgery to children in need, and Mision Evangelica Bautista, a religious institution in Santa Cruz, Bolivia, where J.D. Crane used to do business and where he posted Saffrin after he graduated from college in 2000.

In 2015, the Saffrin Foundation granted $457,000 to those same three recipients.

In 2016, the Saffrin Foundation split $313,000 between Daemen College and Mision Evangelica Bautista. (While the $1 million for the Explore and More Children's Museum was announced in December 2016, foundation documents indicate the money was not disbursed that year.)

"Why does he need this compensation," Borochoff asked, "if all they are doing is these few grants?"

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