Khazei OK’d hiring brother at nonprofit

Did not clear payments with board beforehand

August 22, 2011|By Noah Bierman, Globe Staff

Alan Khazei ran Be the Change.

Alan Khazei, who is basing his campaign for US Senate on his experience leading nonprofit organizations, paid his brother nearly $40,000 as a consultant for the charity he ran over a three-year period, an action that appears to run afoul of his nonprofit’s conflict-of-interest policy.

Khazei also paid his brother, Hollywood writer Lance Khazei, $41,250 as a consultant for three months of work on his 2009 Democratic primary campaign for the Senate, in which Alan Khazei placed third.

Khazei said his brother is a talented writer and creative thinker, and that his $50-an-hour cost to the charity, Be the Change, was relatively low in the scheme of a multimillion dollar budget. He was hired by the nonprofit to advise on its Internet strategy, write some of its promotional materials, and help in dealing with celebrities the charity was trying to enlist in promoting itself, Khazei said.

“He’s a professional. His rate as a writer was multiple times that,’’ Khazei said. “We’re very close and he’s very talented.’’

The board did not review his brother’s contract before it was approved, according to Khazei and Kevin Jennings, who replaced Khazei as president and chief executive of Be the Change in late July.

“It was my approval with the senior team,’’ Khazei said. “It was such a small amount, $50 an hour, $2,500 a month.’’

But the nonprofit’s conflict-of-interest policy says if officers have a financial interest “directly or indirectly, through business, investment, or family’’ in a contract, the issue needs to come before the board to determine whether the interest amounts to a conflict of interest. The board is supposed to review the situation outside the presence of the parties that may be in conflict, according to the policy.

If the board finds a conflict, it is supposed to seek alternatives before voting on whether to agree to such an arrangement, according to the policy.

After the Globe’s questions about the policy Thursday, Jennings provided a memo drafted by a lawyer for the nonprofit that day, arguing that the contract with Lance Khazei did not violate the board’s conflict-of-interest policy because Alan Khazei would not have benefited financially from his brother Lance’s income. The memo says the board’s policy, based on an IRS model, does not define “family,’’ but would be more likely to apply to a spouse than a brother because Khazei would not benefit from his brother’s earnings.

Be the Change, a Cambridge-based organization founded by Khazei in 2007, promotes civic engagement and enlists nonprofit groups and others in national policy campaigns.

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