Attorney General Bonta Announces Nearly $1.2 Million Settlement with Valley Rock Foundation for Self-Dealing Transactions

OAKLAND - California Attorney General Rob Bonta today announced a nearly $1.2 million settlement against the Valley Rock Foundation, formerly, Edward A. Keith Foundation, and its directors Celeste White and Dr. Robert White (Whites). The settlement resolves allegations that the directors engaged in self-dealing transactions, unjust enrichment, and breach of fiduciary duty for improper personal benefits from the Foundation's charitable assets. The Whites do not admit liability in the settlement agreement.

"At the California of Justice, we are unwavering in our commitment to safeguarding the integrity of charitable organizations and will hold any individual or entity accountable that misuses charity funds for personal enrichment," said Attorney General Bonta. "This settlement sends a clear message: Those who abuse their positions and exploit charitable resources for personal gain will be held fully responsible for their wrongdoings."

The settlement resolves concerns that the Whites breached their fiduciary obligation to act in the best interest of their charitable organization. An investigation by the Attorney General's Office revealed that the Whites made improvements to their personal real property (Barn), and to their condominium in Lake Tahoe, Nevada, using charitable assets. The investigation also showed that the defendants allegedly formed Veritas Refuge to acquire and manage the real estate assets of the Foundation. The expenses of the Veritas Refuge, however, do not appear on the Foundation's IRS Form 990-PFs, resulting in a lack of transparency to our office and the public.

Under the terms of the settlement, the Whites must adhere to the following:

• The Foundation will be required to dissolve, and any assets left after the payment of fees and expenses will be distributed to Westmont College, the named beneficiary of the Foundation upon dissolution.
• One of the Whites will resign as a director of the Foundation, and the President of Westmont College will be appointed to the board as an independent director.
• The Foundation will make a set of final grants totaling $10 million towards the opening of a community-use area in Yountville, the rehabilitation and development of two churches in the Napa area, and the renovation of campus facility buildings at Westmont College in Santa Barbara, California.
• The Foundation will contribute $997,571 to ImpactAssets, Inc. This amount is to resolve flood damage claims related to the Whites' Lake Tahoe property and fire damage claims at the Barn that led to a loss of use of charitable assets for their intended charitable purpose. The payments are restricted to specifically benefit residents of California.
• Pay the California Department of Justice $150,000 in attorneys' fees, investigatory costs, and settlement of claims.

A copy of the settlement can be found here.