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Agency paid $25,000 to settle sex harassment claim against former leader

One of Pinellas County's biggest nonprofits paid $25,000 to settle a sexual harassment claim against its president in 2008, though he denied any wrongdoing, a spokeswoman said Wednesday.

Michael Bernstein, 57, resigned Oct. 14 as president of Gulf Coast Jewish Family Services, the charity he served for three decades. A week later, he was found dead of a self-inflicted gunshot wound in a Valdosta, Ga., hotel room.

The sexual harassment settlement was disclosed in a two-page memo released Tuesday by Ray Gadd, a former Pasco County School District assistant superintendent who took over Monday as interim president.

"The attorney felt we could have easily defended it," said spokeswoman Lisa Brock. "But he advised there would be less stress for the agency (to settle). There was no admission of guilt."

The $25,000 settlement, approved by the agency's executive board members, came from profits derived by agency programs, not private donations or grant funds, Brock said.

Gadd's memo, which was sent to the staff, the board and financial contributors, said the charity is conducting an internal investigation that so far has "not found any evidence of possible fraud or embezzlement."

But the organization is now in the process of investigating two other sexual harassment complaints against Bernstein by former employees, as well as an allegation that he had staffers do repairs at his home, Gadd said.

None of the harassment claims involved allegations of physical improprieties. The women, who were not identified, all said that there were instances where they felt "uncomfortable" around Bernstein, Brock said.

"One was asked to attend some evening meetings with him that she was not comfortable attending. So any kind of evening meetings were ceased," Brock said.

The investigation about home repairs is ongoing, Gadd said.

Six weeks before his departure, Bernstein repaid the organization $108,000 he received when he was paid his annual benefits package twice. The overage was the result of an administrative error, charity officials said.

The investigation of Bernstein began after he reported to state regulators that he had uncovered problems with a Florida Department of Education contract for job placement for mentally and physically disabled individuals.

The state launched an inquiry and found that, in some instances, Gulf Coast billed the state for having found jobs for clients but could not produce adequate documentation that the placements had occurred. The review also found some clients were placed in jobs the state found were not appropriate.

Gulf Coast was ordered to repay $132,000 to the state, which it did in mid September. The contract was discontinued Oct. 14, the same day Bernstein resigned. The state review turned up no evidence of illegal activity, but said the possibility could not be ruled out.

In an e-mail Bernstein sent to the board Oct. 11, he mentions anonymous letters that accused him of fraud, embezzlement and sexual harassment, and said he took and passed a polygraph test regarding the "false allegations."

Gadd, who signed a six-month contract as interim president, said he is reviewing and shoring up internal controls and processes and working with the board on "good governance and accountability systems."

The organization is trying to heal after such a devastating loss, said chairman David Abelson.

"It's a great tragedy what happened to Michael," Abelson said.

Rita Farlow can be reached at farlow@sptimes.com or (727) 445-4157.

The headline on this article has been revised to reflect the following correction: The $25,000 paid by Gulf Coast Jewish Family Services to settle a sexual harassment complaint against former president Michael Bernstein did not involve a lawsuit. A headline Thursday was incorrect on that point.

Agency paid $25,000 to settle sex harassment claim against former leader 11/04/09 [Last modified: Thursday, November 5, 2009 3:30pm]
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