Attorney General: Doc Hurley Foundation Money Appears To Be Gone

Dec. 19--HARTFORD -- The Doc Hurley Scholarship Foundation, which held more than $1 million in assets just seven years ago, appears to have little or no money left, state officials investigating the charity said Wednesday.

After more than a month, investigators with the Attorney General's office and the Department of Consumer Protection have found "no indication that the foundation possesses any substantial assets," said Jaclyn Falkowski, director of communications for the attorney general.

Authorities had hoped to locate and preserve the foundation's assets. Now, the investigation is focused on finding out what happened to the money and seeing if Walter "Doc" Hurley's legacy can be preserved in another form. Hurley, 91, a former administrator at Hartford'sWeaver High School, began handing out scholarships in 1975 and has helped nearly 500 needy students attend college.

"We are working as quickly as we responsibly can to complete our investigation and determine appropriate next steps," Falkowski said. She declined to say what those next steps might be.

The investigation was prompted by a Nov. 3 article in The Courant revealing that the foundation had awarded few if any new scholarships since 2008 and had lost its tax-exempt status and board of trustees. The Courant subsequently reported that at least 15 scholarship winners from 2005 to 2008 said that they had received only a portion -- or none -- of the money they were promised.

The state's findings are in sharp contrast to assertions by Hurley's daughter Muriel, the foundation's executive director and sole employee, who told The Courant in October that the foundation had "probably about $550,000 in the bank."

"I can print you out records or whatever you want me to do," Muriel Hurley said at the time. She then indicated that she was trying to access the bank records on her phone, but declared that the application would not accept her password. She offered to provide paper records the following day, then canceled that appointment and failed to show up for a rescheduled meeting.

Hurley said Wednesday that on the advice of her attorney, she would not answer questions. The lawyer, John Wolfson of Feiner Wolfson in Hartford, said: "Because this is a continuing investigation, we have no comment."

The foundation's lack of cash has spelled the end of what would have been the 39th annual Doc Hurley Basketball Classic, a high school tournament that was scheduled to begin Thursday at a Weaver gymnasium named in honor of Doc Hurley.

School officials had said that the tournament could be held only if the foundation secured insurance and paid at least part of the $21,303 in bills that the Classic ran up in 2011 and 2012 but never paid. Muriel Hurley told The Courant a week ago that she would "absolutely" meet the district's conditions. But when the deadline passed on Friday with no payment or proof of insurance, school officials shut down the event.

Although Muriel Hurley has not explained how the foundation's money was spent, she sent an email last month to people involved in the basketball tournament, criticizing The Courant and declaring that "funds are not necessarily misappropriated but spent on all of the expenses that are incurred."

But tracking those expenses is difficult. The foundation last filed a required nonprofit tax form for the year 2007 and reported that it had about $880,000 in assets at the end of that year. Since then, an analysis by The Courant estimates that the foundation has spent at most about $100,000 on its formal scholarship program. The foundation's only other official activity was the basketball tournament, which was promoted as a fundraiser for the foundation, although Muriel Hurley has said that it has not been a moneymaker in recent years.

Beyond the known spending on the scholarship program and the tournament, there are hundreds of thousands of dollars of additional assets that have been lost.

The foundation's dire financial condition is a dramatic reversal of fortune from a dozen years ago, when a high-powered fundraising effort brought in at least $1.7 million in pledges. That campaign, led by former Phoenix CEO Robert Fiondella, was designed to establish an endowment that would sustain the foundation perpetually. But from 2002 to 2007, the foundation overspent its revenue by nearly $1 million, wiping out half the endowment. And over the past six years, the money that remained was apparently all depleted.

Past board members have acknowledged that while they were committed to selecting deserving scholarship winners and promoting the basketball tournaments, they were not focused on the organization's finances.

In the last years that the scholarship program was active, the foundation typically made awards worth $44,000 over four years. Even with the assets apparently depleted, the foundation's website was updated last month, indicating that new scholarship applications would be placed in high school guidance offices by mid-January. And Muriel Hurley vowed earlier this month to reimburse any past winners who had received less than they were promised. It is unclear how the foundation expected to pay for any past or future scholarships.

Rep. Douglas McCrory, D-Hartford, said Wednesday night that several people in the community have approached him recently about raising money to create a new scholarship fund in Doc Hurley's name, including one person who has pledged to donate $12,000.

The Hartford Foundation for Public Giving has also offered its organizational support, McCrory said.

Doc Hurley has been a role model and mentor "for generations," said McCrory, whose district includes the North End. "He has provided inspiration, dedication and example-setting for young people in the city of Hartford, especially young men from North Hartford. He is that guy."

The revelation that the foundation's coffers appear to be empty has also put a spotlight on the Hurley family's personal financial problems. Muriel Hurley and her ex-husband lost their condominium in Bloomfield to foreclosure in April 2012. When the bank filed suit to take the house in 2009, the complaint cited multiple existing liens filed by credit companies that had not been paid.

Muriel Hurley now lives in her father's house in Hartford. In March 2011, Doc Hurley signed for a $105,000 mortgage on his home of 50 years, and 19 months later, the lender filed suit, seeking to foreclose on the house for nonpayment. That action is pending.

Collections lawsuits were also filed against Doc Hurley in late 2012 and earlier this year by St. Francis Hospital, Hebrew Health Care and an oil company. He has said that his daughter handles his finances, and it is unclear if he is aware of the legal actions against him. Hurley typically spends days at the Parker Memorial Community Center in Hartford, but a worker there Friday said that he was in the hospital.

Muriel Hurley told The Courant in October that the family's financial problems were unrelated to the foundation and were a result of her father's health issues.

"I can tell you that the cost of his medical bills right now is just, it's crazy. I never thought that a person, an elderly person getting sick, would cost this much. I never did," she said. "He has Medicare, but when he is in a long-term care facility, which he needed to be in, I never thought that it would cost this much."

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