The reported misuse of funds was discovered after one of the organization’s accountants raised a question about a transaction, according to a spokesman for the Children’s Homes. After meeting with Blackwell and receiving a letter from his lawyer, board members offered him the choice of taking a leave or being suspended without pay.
Investigators for the charity found Blackwell had long had access to a special account set up for his benefit. Known as “Account 2695,” that account was set up in 2004 with $50,000 to pay for Blackwell’s sabbatical and other expenses.
“This fund can be carried over or used immediately at Dr. Blackwell’s discretion,” according to the minutes of a May 11, 2004, board meeting. “If there is a way that the money can accrue to Dr. Blackwell tax-free, that would be the choice of the Executive Committee. The motion was unanimously approved.”
But Blackwell allegedly continued to add money to Account 2695 without board approval — and at times diverted funds meant for the general support of the children’s homes to that account. The investigations found that $312,500 had been transferred into the account since 2009—with the bulk of it being transferred from 2020 to 2022.
The remaining account had a balance of $183,096 as of September.
While a number of donors had designated their gifts specifically for Account 2695, they were not told that the board was not aware of how the funds were being used or that they were used for “expenditures unrelated to BCH’s charitable purposes,” according to the report.
“Perhaps more important is that one of BCH’s most significant individual donors lacked awareness that Account 2695 existed and that significant portions of two of their recent donations to BCH were deposited into that account,” the report said.
Blackwell told investigators he had not solicited funds for Account 2695. Instead, according to the report, he told them that donors had “gratuitously directed considerable funds for Dr. Blackwell’s benefit because of his importance to the organization.”
Investigators found his explanation “lacked credibility.”
According to the report, about half of the personal expenses from 2020 to 2020 were paid for from Account 2695. The other half—about $45,000—came from general operating funds without any approval by the board.
The report also found that Blackwell was not required to turn in receipts and for decades had no oversight when using his company American Express card.
“Our investigation revealed that Dr. Blackwell created a process outside of BCH policy (that) enabled him to keep the actual expenses paid by the AMEX card hidden,” according to the report.