Sammy Sosa's Foundation
Is a Major League Fiasco
HURRICANE RELIEF OR
By David Whitford, April 2000
During the magical summer of 1998, when
Cubs slugger Sammy Sosa battled the Cardinals' Mark McGwire for the
single-season home-run record, Sosa did what rich celebrity athletes
sometimes do. He set up his own foundation. The timing was fortunate.
That fall Hurricane George battered Sosa's native Dominican Republic.
"We became famous," says Bill Chase, president of the Sammy
Sosa Charitable Foundation. "Everybody wanted to help Sammy and his
country." Small donations poured in. "A lot of kids would send
their allowance," says Rebecca Polihronis, who coordinates
charitable giving for the Cubs.
Yet the total was hardly staggering: The foundation disbursed $82,842 in
relief supplies, according to its 1998 tax return. Nonetheless, Sosa got
credit for bringing attention to the plight of his country. For his
civic and charitable acts, Major League Baseball honored him with the
Roberto Clemente Man of the Year Award.
Today, a year and a half after its high-profile debut, the Sosa
Foundation is broke and in disarray. Amid a board member's allegations
of misuse of funds, operations are at a standstill. Seven thousand
pounds of food, clothing, and medical equipment have been accumulating
$2,000-a-month storage charges in a Miami warehouse since last fall.
What's more, there's no evidence that Sosa, who's halfway through a
four-year, $42.5 million contract, has ever made a significant cash
contribution to his own foundation. (Even rival McGwire pitched in
$100,000 last year.)
It appears that Sosa's foundation was a dog from the start. He
established it in June 1998 by donating a three-story office building
called 30/30 Plaza (in recognition of his two-time feat of hitting at
least 30 home runs and stealing at least 30 bases in a season), which he
had built a couple of years earlier. Located in an impoverished
neighborhood of San Pedro de Macoris, where Sosa grew up, the property
was a money-loser. Many of the tenants that ran businesses from it
didn't pay their rents. By handing over the building, appraised at $2.7
million, to his nonprofit, Sosa got a tidy federal tax deduction of at
least $1 million.
The deadbeat tenants are still there--including two of Sosa's sisters,
who run a boutique, a disco, and a beauty shop--but Sosa's off the hook.
"Sammy don't want to get involved," says Gordon Skitt, the
building manager. "It's the foundation's problem."
Financial woes aside, the internal squabble--pitting the foundation's
secretary, Arturo Sandoval, against Sosa and other members of the
board--threatens the foundation's survival. In a November 1999 memo
Sandoval has since shared with the IRS, he informed his fellow
directors, Chase and Dana Kaufman, of the back rent the Sosa sisters
owed. He also said Sosa took a check for $1,500 from the foundation as a
security deposit on an apartment to be used by the nonprofit. But before
the foundation could move in, he sold the apartment--and kept the
deposit. "Someone has to clarify with Sammy that he cannot take
charitable contributions from the United States and directly deposit
[them] into his business account in the Dominican Republic,"
Sandoval summed up. Chase does not dispute those charges. He even
admitted to FORTUNE that he once bought a new sports car for Sosa's
brother Jose using foundation money. But he responded to Sandoval's
allegations by terminating his consulting contract, withholding his last
month's pay, and locking him out of foundation headquarters. Sosa did
not return a call to his cell phone the day before he left for the Cubs
season opener in Japan, but his agent, Adam Katz, says, "I'm going
to go down [to Miami] and clean this thing up. I can virtually assure
you there's been no impropriety."
Not so fast. At the very least, Sosa's setup violates basic standards of
philanthropy laid out by the National Charities Information Bureau: A
public charity, like Sosa's foundation, should have at least five
members on its board to guarantee diversity (Sosa's has three, plus
himself); board members shouldn't profit from their affiliation with the
charity (Sandoval has earned $4,000 a month as a consultant to the
foundation); and the board shouldn't be beholden to special interests
(Chase, who once owned a factory in the Dominican Republic, used to pay
the young Sosa to shine his shoes; now he lives in a home in Coral
Springs, Fla., that Sosa owns. Kaufman, the remaining board member, is
The irony is that despite Sosa's selfishness and questionable practices,
agencies housed at 30/30 Plaza are doing good work--inoculating
children, educating young mothers, and providing dental care. But with
the escalating shenanigans inside the Sosa Foundation, the future looks
cloudy. In January, Paul Schenkel, a senior technical adviser with the
U.S. Agency for International Development's health and population team
in the Dominican Republic, sent an e-mail to Chase in which he
concluded, "I believe the foundation is at a critical moment. I am
convinced that without Sammy's direct involvement the foundation will
run out of funds and be forced to terminate a great project." Hey,
Sosa, you're up.