- 37 -
As for petitioner's daughter, the facts must be examined
more closely. The $3,000 payment related to a contract with
Form, Inc., for the creation of an outdoor art exhibit. The sub-
ject matter of the contract comports directly with the Museum's
exempt purpose, and the contract was signed by petitioner's
daughter as a director of the Museum. However, the John Madden
Co. is the named party in the contract, not the Museum. The
payment by the Museum for setting up the outdoor exhibit satis-
fied a financial obligation of the Company under the contract
with Form, Inc., and the parties agree that it is a self-dealing
payment to the Company.
Petitioner's daughter testified that she was aware of the
payment made by the Museum. As evidenced by this testimony, she
was knowledgeable about the subject matter of the contract.
However, based on the testimony and surrounding facts, we con-
clude that her actions do not constitute knowing participation in
a self-dealing transaction. Petitioner's daughter testified that
the foundation managers intended to have the Museum shoulder the
responsibility for the exhibit, not the Company.10 She believed,
at the time of the payment, that responsibility for the financial
obligation rested with the Museum. As a consequence, peti-
tioner's daughter did not view this payment as benefiting the
10This testimony is supported by the contract itself, as it
was signed by petitioner's daughter in her position as the
director of the Museum.
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011