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Quasi-governmental missing kids center enjoys key exemptions from federal rules

In many ways, the National­ Center for Missing and Exploited Children is a quasi-government agency.

Mandated by Congress, the center has access to the FBI's missing, wanted and unidentified persons files. It operates tip lines for the Justice Department and Immigration and Customs Enforcement. It gets more than half of its money from U.S. taxpayers.

Yet the Virginia-based center, with regional offices in Florida and three other states, is a private nonprofit organization exempt from federal salary caps. And that has enabled the center's president, Ernie Allen, to command a salary among the highest in the nonprofit world.

In 2008, the latest year for which records are available, Allen made $511,069 as head of the center and its international affiliate. He also received $787,126 in deferred compensation and underfunded retirement benefits, as well as $46,382 in nontaxable benefits — a total of $1,344,567.

Allen's base salary was higher than that of the top executives of two other nonprofits — the American Red Cross and the Smithsonian Institution — that also get substantial funding from the U.S. government. Both have budgets many times greater than that of the missing children's center.

Allen's compensation "does appear quite high,'' says Daniel Borochoff, president of the American Institute of Philanthropy.

Of the more than 500 nonprofits the institute rates, Allen's total compensation ranked third-highest — exceeded only by that at the Boy Scouts of America ($3.97 million) and Memorial Sloan-Kettering ($3.67 million), one of the world's top cancer centers.

Borochoff says there is "no easy formula" for determining executive compensation in nonprofits.

"You really have to look at the facts and circumstances and what kinds of skills are needed," he said. "If he (Allen) was running the Red Cross, where he was in charge of half the blood supply and major disaster relief, you could make a bigger argument (for his compensation)."

Charity Navigator, a watchdog group that evaluates 5,400 nonprofits, ranks Allen's salary as 47th-highest and almost twice the average for chief executive officers of similar-size organizations. Most of the CEOs who are paid more than Allen head major universities or research centers.

"I think it doesn't pass the smell test with donors," Sandra Miniutti, Charity Navigator's vice president, says of Allen's compensation. "It's very hard for people to wrap their arms around huge salaries, especially right now when we're in a recession.''

Although Allen's salary is high by nonprofit standards, Charity Navigator and the philanthropy institute list the center as "top-rated'' because most of its revenues go for programs, not fundraising costs.

Allen, a lawyer, said the board of directors set his compensation based on a study to ensure it was "comparable, appropriate and reasonable.'' He said he won't receive some of the money for years, although Internal Revenue Service rules required it to be reported on the center's annual IRS return.

"I am one of the nation's leading experts on the issue of missing and exploited children,'' Allen said in an e-mail to the St. Petersburg Times. "I am always on call and have little time off, including nights, weekends and holidays. I receive no bonuses or perks that many other nonprofit executives receive."

Allen said none of his compensation comes from U.S. taxpayers — $25.4 million in 2008 — but is paid out of "private funds" like donations. Total revenues in 2008 were $42 million.

The center's 350 employees include 11 who are paid more than $125,000. And in 2006 and 2007, the center paid medical claims totaling $76,572 for co-founder John Walsh, whose son Adam was murdered in South Florida in 1981. Although Walsh is no longer an employee, his wife is an unpaid board member and their family is covered by the center's health plan.

Walsh, host of America's Most Wanted, still acts as a spokesman for the center and is a "key person … whose knowledge, work, and overall contribution is uniquely valuable," Allen said.

President Ronald Reagan announced the creation of the center in 1984 and Congress designated it as the national clearinghouse for information on missing and sexually exploited children.

Missing kids are located by way of a 24-hour toll-free phone line, a photo distribution system and a team of forensic artists, who create age-progressed photos showing what a child abducted at, say, 2 might look like at 13.

The center says it has helped recover more than 135,000 missing children, though it acknowledges that many reported kidnapping victims are actually taken by parents in custody disputes.

As use of the Internet grows, the center has also become a key partner with law enforcement in identifying online sexual predators. It operates the CyperTipLine for reporting suspected cases of child pornography. Its Child Victim Identification Program analyzes pornographic pictures and videos in an attempt to identify the children.

As a nonprofit organization, the center gets far more support from the business world than it would if it were a government agency, Allen said. Among its major benefactors is Boca Raton entrepreneur Hank Asher, who has donated millions of dollars to the center as well as some of his people-finding technology. He also sits on the center's board.

As the St. Petersburg Times recently reported, Asher and the center were involved in a project to develop a system for tracking children in the custody of the Florida Department of Children and Families. But as the scope of the project broadened, raising privacy concerns, DCF and other agencies backed away.

DCF still deals with the center on children's issues, and praises its work.

"I was blown away by the national center,'' said DCF Secretary George Sheldon, who has visited the Arlington, Va. headquarters. "They have housed at the center (agents) from homeland security, the FBI, several of those kinds of entities.''

Unlike the FBI and Department of Homeland Security, the center is exempt from the Freedom of Information Act. But it should be subject to it because of its quasi-governmental status, contends a medical researcher who was labeled an "abductor'' on the center's Web site in 2005, after he left the United States with his daughter.

Emmanuel Lazaridis, now living in Greece with the child, sued the center last year after it declined to turn over records he requested. There is a Michigan arrest warrant for Lazaridis for custodial interference, but he has never been convicted and was cleared by a Greek court.

The center is "intimately entwined with agencies of the executive branch of government,'' the suit says. "Because even their simplest statements about a person are accorded substantial weight, any abuse of their vaunted position can cause to the plaintiffs irreparable harm.''

The center publicizes family abductions only at police request, Allen said. He did not directly address the issue of whether the center should be subject to Freedom of Information queries, but said the organization "receives extensive oversight from various charity regulatory bodies.''

Some experts agree with Lazaridis' position.

"If the center is going to continue playing the role it does today, there's not a question in my mind that it should be subject to accountability and transparency through the FOIA process," says Berin Szoka of the Progress and Freedom Foundation in Washington.

"It could very well be that Ernie Allen is the best possible person to run the organization and that (the center) is the best strategy you could possibly come up with for protecting children. But I don't have any idea and I don't think anybody outside (the center) and a handful of people outside of law enforcement do either."

Susan Taylor Martin can be contacted at

Quasi-governmental missing kids center enjoys key exemptions from federal rules 01/22/10 [Last modified: Sunday, January 24, 2010 11:18pm]
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