Red Brick probe raises red flags for Aspen City Council members
September 29, 2017
With the looming scandal involving allegations that the Red Brick Council for the Arts' then-executive director siphoned an estimated $150,000 from its coffers from 2015 through June, some City Council members suggested Friday they want more assurances the nonprofit's finances are under control before they bless another grant to the organization.
Aspen taxpayers have helped support the Red Brick to the tune of nearly $300,000 since at least 2008, thanks to annual grants averaging $30,000 a year.
On Monday, the City Council kicks off its budget season for 2018, which includes elected officials deciding which local nonprofit groups will receive grants and how much they will be.
"One part of me is saying 'why should we reward some people who can't keep track of money that can't be trusted?'" said Councilman Ward Hauenstein in a telephone interview Friday from Maine, where he was visiting.
"The other side of me says 'why should we punish the arts for one action of one individual?'"
On Thursday, the city announced that Angela Marasco Callen, who worked for the Red Brick from 2013 to 2017, is under investigation by the Pitkin County District Attorney's Office for embezzlement that is believed to have started in 2015. She was fired from the Red Brick Council for the Arts in June. Callen, who has not been charged with a crime related to her work for the Red Brick, did not return telephone messages left Thursday and Friday.
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As director of the Red Brick Council, Callen oversaw the management of the Red Brick Center for the Arts, which is a venue for nonprofit artists and organizations, as well as educational camps.
Financial oversight and a $15,000 raise
In November 2015, Callen signed off on a management agreement between the Red Brick Center for the Arts and the city, which owns the building on the 100 block of East Hallam Avenue. That agreement, which expires Aug. 31, 2025, included language that the "Red Brick Center shall be solely responsible for the operational management and maintenance of the Property." Callen's role included negotiating and executing leases to subtenants of the Red Brick, among other duties.
The agreement also called for the Red Brick Center to "keep up-to-date books and records that reflect all revenues and all expenditures incurred in connection with the management and operation of the Property." Those financial obligations also required the Red Brick Center provide a "detailed statement of all revenues and expenditures" on a monthly basis to the city.
City spokeswoman Mitzi Rapkin declined to say whether the city actually reviewed those records on a monthly basis, writing in an email that "this may fall under the realm of the investigation and (is) something (City Manager Steve Barwick) cannot comment about."
Councilman Bert Myrin, meanwhile, took to Facebook on Thursday and Friday about the Red Brick probe, saying "the City needs more direct control over taxpayer money currently under the control of various nonprofits."
In a telephone interview from Pennsylvania, Myrin said because Callen's bilking activities allegedly "went on for quite a long duration, if there was a monthly report (as required by the management agreement), things weren't followed, things weren't discovered."
The Red Brick Council for the Arts notified the city of Callen's suspected embezzlement activities in June. The council and the city hired accounting firm McMahan and Associates, "which uncovered what may be in excess of $150,000 of unauthorized expenses from operating and non-operating bank accounts, yet specific details and exact numbers are still subject to investigation," the city's statement from Thursday said.
Council members also were informed of the investigation in June. Myrin would not divulge who initially learned Callen allegedly was up to something suspicious, but he said it was neither the city nor the Red Brick Council.
And on Facebook, Myrin said: "The (Red Brick Council) board deserves zero credit for discovering this. It was brought to their attention in an unlikely sequence of events that didn't occur because of a scheduled review but instead by chance."
Both the city and Red Brick would not answer a question seeking who unearthed the alleged financial mismanagement because the investigation is active.
Councilman Adam Frisch, who once sat on the Red Brick Council's board, said perhaps the city should take more control of the Red Brick's financial picture on a permanent basis. However, Frisch said "if there happens to be just one bad apple, we have to be careful about that. That said, it's a city-owned building. While the Red Brick is a quasi-independent organization, it really exists because of taxpayers and citizens. Without a doubt, there needs to be a check to make sure that any citizen funds have proper financial controls."
The city, in its statement, said it "has pulled the operating and reserve accounts from the Red Brick and will now pay operating costs directly until a new agreement between the two entities can be arranged."
The Red Brick Council also declined to respond to an Aspen Times question regarding Callen's annual salary raise from 2014 to 2015. According to the Red Brick Council's Form 990 tax return for 2015, she earned $71,500 along with an additional $7,021 for other benefits. For the 2014 tax year, she drew a salary of $57,157 with no other benefits recorded on the tax return.
The 2015 tax form is the most recent year available for the Red Brick Council, which reported $234,000 in revenue that year with $226,010 in expenses, including $112,954 for employee compensation.
Artists surprised by investigation
Resident artists at the Red Brick said they were shocked by the news when it broke Thursday night. Other than an early summer email from the board informing resident artists and nonprofit tenants stating that Callen had been terminated, those who work in the Red Brick everyday were kept in the dark about the cause of her dismissal.
"She was gone and we never knew why," resident artist Michael Bonds said. "There were just rumors and people going, 'What happened?'"
The daily creative life of the Red Brick hummed along over the past three months under a cloud of uncertainty.
"It's been frustrating for the artists," longtime resident artist Mike Otte said, "simply because there were changes going on and we didn't get a lot of definition and guidance from the board. We've been suffering under anxiety for months. … I think we are ready to go on with our lives and our programs."
Despite the director's sudden departure, the Red Brick's monthly art openings continued through the summer, as did the Red Brick Plein Air Festival in August. Though there has been some discussion of reducing the number of exhibitions at the Red Brick gallery — now 12 per year — residents don't expect the allegations against Callen to impact the Red Brick's artistic programming.
"I am not concerned about the survival of the Red Brick," Otte said.
Resident artists — who pay between $300 and $550 in monthly rent for their studio space — also expressed support for Callen, who during her tenure renovated the artist studios and revamped the Red Brick's slate of art classes into a popular attraction for both adults and children.
"Angie deserves credit for really bringing the Red Brick art program to life by setting aside a room she called the Art Factory for classes," resident artist Sue Tatem said.
Callen also led the Red Brick taking over leadership of the Plein Air Festival in 2015 and curated many of the gallery's monthly shows herself (sometimes personally preparing food herself for art openings, Tatem noted).
"In terms of her working with the artists, she did bring a vitality to the Red Brick that hadn't been there before and a higher level of professionalism from a management point of view," Otte said.
Sarah Roy is serving as the organization's interim director.
Arts and Entertainment editor Andrew Travers contributed to this report.