Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, May 18, 1995 TAG: 9505180045
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Associated Press
DATELINE: PHILADELPHIA LENGTH: Medium
With a winning smile and Main Line charm, John ``Jack'' G. Bennett Jr. had a talent for talking highly respected institutions and philanthropists into entrusting their money to him.
But after a bankruptcy filing and growing suspicions that his Foundation for New Era Philanthropy was a scam, the multimillion-dollar questions being raised are: Why did they trust the silver-haired 57-year-old former drug counselor, and where did their money go?
New Era solicited money from museums, universities, charities and philanthopists by promising to double their money in six months with matching contributions from anonymous donors. New Era would keep only the interest earned during the search.
The rich donors' identities were supposedly known only to Bennett, New Era's founder and chief executive.
On Monday, however, New Era filed for Chapter 11 bankruptcy protection. Lawyers for the foundation said Bennett has admitted that the anonymous donors never existed.
As much as $300 million to $500 million may be owed to hundreds of charities and investors, Pennsylvania Attorney General Ernie Preate said.
(No Western Virginia organizations are known to have ties with New Era Philantrophy, said Alan Ronk, executive director of The Foundation for Roanoke Valley. Ronk said he called several groups after the bankruptcy was reported and concluded "nobody is aware of anybody locally being involved with them.")
Bennett ``was such a very charismatic individual,'' Preate said Wednesday, ``and he said, `Well, if you don't want to invest with me that's just fine, I'll find someone else.'
``And so people then said, `Well, all right, I'll trust you for this once.''' After their first payments were doubled within six months as promised, the institutions invested more money, the attorney general said.
Among the philanthropists who entrusted their money to the foundation: John Whitehead, a former co-chairman of Goldman, Sachs & Co.; John M. Templeton Jr., a Philadelphia pediatric surgeon and son of a leading mutual-fund manager; and Laurance Rockefeller.
The district attorney's office, the U.S. attorney's office, the FBI and the IRS are investigating.
A state court Wednesday froze the Pennsylvania assets of Bennett and New Era, which despite its name is a charity with no endowment, not a foundation. Today, the attorney general will ask to have its worldwide assets frozen.
Preate also has asked a court to appoint an accounting firm to do an audit.
Bennett may have even fooled his own employees when he claimed to have a list of wealthy anonymous donors. New Era's lawyers said grief counseling was made available to the staff after Bennett admitted the donors never existed.
``He was subtly persuasive,'' said William McConnell, whose Intervarsity Christian Fellowship stands to lose $575,000. ``His reputation preceded him. Everyone we consulted with vouched for the guy as being deeply religious and genuinely kindhearted. A family man.''
Bennett has denied any wrongdoing, is cooperating with authorities, and is confident he has the money to repay everyone, his attorney, Gregory P. Miller, said in a statement.
His lawyer said Bennett has ``dedicated the past 30 years of his life to helping the underprivileged.''
Bennett has held several posts in substance abuse counseling, including a stint as assistant administrator in charge of a suburban county's addiction programs in the early 1970s. He also served as a consultant for the National Institute of Drug Abuse.
In the 1980s, he headed a program called Bell Institutes that trained nonprofit organizations in management.
by CNB