PRESERVATION SOCIETY FRIENDS

October 25, 2016

Monty Burnham
Chairman of the Board
The Preservation Society of Newport County
424 Bellevue Avenue
Newport, RI 02840

Re: Whistleblower Policy

Dear Monty:

We acknowledge receipt of your letter dated September 23, 2016, sent by regular mail. You say
you consider our continuing request that the Society adopt and publish a strong whistleblower
policy, available to all Society stakeholders, to be a closed matter. However your response
triggers more questions and comments.

You say we must have been misled about the Societys policy. Mislead by whom? Last
March, your attorney, Tom McAndrew, informed Mary Joan Hoene that the policy was
confidential because it is in the employee handbook, and that the Society might release it if a
formal request was made. Mary Joan told Tom that we already had a copy of the handbook,
dated 2012, so that unless the policy had been modified there was no reason to make a separate
request. Tom did not say anything on this point; we assumed that the policy remained the same
as in the 2012 handbook: all complaints to be brought to and handled by the CEO.

It seems from your letter that the policy has been amended to provide a means for employees to
report directly to the Board, or to the Societys auditor or lawyer. These are positive
developments. However, if the policy had been modified, why keep it a secret? Perhaps you did
not want to acknowledge that the policy needed improvement, as we have stated several times
since we began our communication with the Board in late October 2014. Once the policy was
revised, did the Board communicate the changes to employees and former employees who might
have something to report? Are there sound protections to ensure confidentiality and no
retaliation? Reporting to a lawyer for the Society is questionable because the person, at least in
our experience, represents management and is not independent. The Societys auditors have
been in place for many years, interact with management regularly and can be expected to support
managements positions and perhaps communicate with them with regard to complaints.
Perhaps actual details in the policy address these concerns? Could we now have a copy of the
policy?

As we have said repeatedly, the Society should have a policy that extends to all stakeholders
beyond employees donors, members, vendors, consultants, and others who do business with
the Society. You do not address this very important point at all. The size of the Society, its
approximate $20 million annual budget, marketing, events and tourism focus and the breadth of

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its activities all point to the need for a published policy that provides a protected conduit to
independent board members. Regardless of what your counsel says about standards, why would
you not want to have a strong policy designed to address the risk in the organization?

In our September 15, 2016 letter, we cited two examples of why the Board should have a strong
policy. One (also referenced in our 2014 submission and never addressed by the Society)
pertained to the means through which the Society won the National Trusts This Place Matters
contest in 2011. The source of the information was a former employee who was aware of red
flags in connection with the contest, including voting by the Society on behalf of people who had
contacted the Society via email.

Coincidentally, we have been in contact just recently with another former employee who worked
for the Society for over ten years before retiring several years ago. She and other employees
were strongly encouraged by their superiors, including the CEO, to use all their email accounts
to vote for the Society in the contest. The contest rules apparently allowed a person to vote from
one personal and one business account. The Society set up separate Society email accounts
addresses for employees in Visitor Services, Sales and Buildings and Grounds who did not have
Society email accounts so they could vote as employees, as well as voting from their personal
accounts. There was a memo to employees laying out the process for these Society email
accounts; it stated that the accounts were to be used only for the purpose of voting in the contest.
There was no business purpose for the accounts other than to enable extra votes.

The former employee says that management initially approached the contest as a fun game, then
it became more like a political campaign, with buttons for the employees to wear to encourage
group think and to get visitors interested so they could be asked to vote. There was a general
staff meeting at Rosecliff where senior management strongly promoted the contest, noting that
many people have several email accounts and these could all be voted as a way to help the
Society win. Additionally, visitors to the Societys properties were asked to vote and told that if
they had more than one email account each could be used. In fact, computers were set up in
some of the houses for visitors to vote. The approach to some visitors bordered on harassment.

The result of all this pressure and manipulation was that one person could equal several votes,
not exactly fair to the other contest nominees. The former employee believes that top
management bullied lower level staff into the behavior, which she later realized was dishonest
and unfair. She has regretted her own actions ever since, saying it was wrong and unseemly for
the Society to use the methods it did to get the $25,000 prize from the National Trust. She noted
that the Society is a large nonprofit with multiple sources of revenue, and that the smaller
nonprofits that participated in the contest needed the money and the prestige much more than the
Society. She observes that many Society employees are too afraid of management and losing
their jobs to ever complain, which means that questionable management behavior can continue.
This all adds up to why whistleblower policies are important.

In light of this information, it appears that the Society got the $25,000 award using unethical
means. The National Trust would likely agree, as would the nonprofit that would have won the
contest if the Society had not pursued multi-duplicate voting. The appropriate remedy for this
behavior is to return the money, with interest, to the National Trust along with a letter of apology

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from the CEO and the Board. You should also identify the responsible management employees,
admonish them severely and take steps to recover their bonuses or raises for 2011.

Clearly, regulatory attention or publicity on this matter, should either ensue, would tarnish the
Society. If it occurs at least the Board should be in a position to say that it acted to ameliorate
the wrong that occurred. In any case, the Board should act simply to do the right thing. We look
forward to hearing from you on an appropriate resolution of this matter.

In closing, please know that we remain most interested in a positive relationship with the Board.
We continue to believe the Trustees would not in good conscience endorse the behavior and
tactics of the Societys senior management if the Trustees had the full picture.

Preservation Society Friends

Henry Breyer Stephanie McLennan

Joanne Breyer Elizabeth Lisette Prince
Donald C. Christ Diana R. Slocum
Linda Gordon John J. Slocum, Jr.
Maureen Donnell Gladys Szapary
Ronald Lee Fleming Paul Szapary
Dodo Hamilton Gladys Thomas
Mary Joan Hoene William Vareika
Judy McLennan

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