The Big Stink

Fur is flying over whether one of the most popular animal charities in town has gone to the dogs

And they just might do it. Love her or hate her, people agree that Susan Heywood is a woman who gets her way.

"She's a bitch. She graduated cum laude bitch, from Bitch College," says Danny Medina, who until last year put out Trends, a monthly in Scottsdale that featured his biting, witty gossip column. He's also the former host of the annual Beat the Heat, a black-tie event featuring his own handpicked Fashionalities, a revolving gaggle of the Valley's top socialites.

Susan Heywood was among the first Fashionalities. She was also the first president of the Trends Charitable Fund, the group that doles out the money raised at Beat the Heat.

Philanthropist Kax Herberger's donation to Scratch & Sniff has become a bone of contention.
Philanthropist Kax Herberger's donation to Scratch & Sniff has become a bone of contention.

Her strong personality makes her enemies, Medina says, but he also contends that it allows her to get the job done.

"She's not one of those silly socialites, if you know what I mean. She really gets down to the nitty gritty. . . . She's a really strong woman, and strong women make enemies."

For years, Medina has been involved with the lighter side of the Scratch & Sniff dinner, but says he's not familiar with the specific financial and management charges made now by former board members.

He hears a lot of gossip, though. "My phone doesn't stop ringing here," he says, laughing.

"Susan will survive this, even with the badmouthing," Medina adds. "She's a tough cookie, but that's how she gets things done."

It was another of Danny Medina's Fashionalities who first started questioning Scratch & Sniff's financial and management record.

Christine Gustafson rivals Susan Heywood, both for her years of public service in the Valley -- on the boards of the Fresh Start Women's Foundation (where she met Heywood), the Herberger Theater and Crisis Nursery -- and her reputation as a tough cookie. Gustafson has been on the Scratch & Sniff board since the organization's inception in 1999. Scratch & Sniff has been good to Gustafson; the Morgan Stanley senior vice president now manages the fortunes of several Scratch & Sniff board members.

This past January, Gustafson wanted off the Scratch & Sniff board. But Susan Heywood put up great resistance.

Not only did Heywood want her to remain on the board, Gustafson recalls, she wanted her to become treasurer. Gustafson agreed, with one caveat. She wanted to see an accounting of Scratch & Sniff's finances.

Looking back, Gustafson and other board members concede it seems incredible that for years they had never seen any sort of financial records -- and never asked to see them. Gustafson does recall an audit of the financials for 2000, which is vague.

But in context, perhaps that's not so odd. There is one board member (local chef Eddie Matney) who admits he hasn't been to a board meeting in about two years. Gustafson and Crown say the full board seldom voted on anything, anyway; almost all decisions were made at the executive level.

The Heywoods refused to provide New Times with a copy of their bylaws or minutes from board meetings.

To further complicate matters, it's impossible to determine who has been on the Scratch & Sniff board, when they served and what positions they held. The letterhead does not match up with annual reports filed with the Arizona Corporation Commission. In fact, the annual reports list Christine Gustafson as treasurer, beginning in 1999. That's news to her, she says.

Susan Heywood did ultimately produce the financial report Gustafson requested -- half an hour before the board meeting at which it was to be discussed, Gustafson says.

Gustafson says she tried to analyze it but didn't have enough time before the meeting, which took place in her Scottsdale office at Morgan Stanley, in April.

Keely Moran, another board member, picked up the financial statement and immediately started asking questions, Gustafson recalls.

Later, Gustafson says, after she'd had time to analyze the figures, she called Heywood with three main concerns.

First, Gustafson questioned an $80,000 expenditure under the category "public information and education." Heywood explained that was her salary, including benefits.

Gustafson was concerned because she had never been asked to vote on the salary. Other former board members confirm this. In early 2001, then-president Michael Owens had asked board members to make Heywood a full-time employee, but the board never took a formal vote and her salary was never discussed, they say. Owens says he did ask each board member personally to approve the amount of Susan's salary.

Gustafson also didn't understand why Heywood's salary was reported under "education" -- which would suggest the money was being spent on education and outreach efforts -- instead of under "administration."

Second, Gustafson says, about $22,000 for a series of videos that celebrated grant recipients was reported as additional grants, rather than as a fund-raising expense. Same with pages from the newsletter that described the grant recipients.

Third, Gustafson says, she noticed that about $6,800 had been paid to purchase seats and tables at other charity benefits. She was bothered by this because money donors had intended for Scratch & Sniff was in fact going to other charities.

Ultimately, Heywood recategorized the grant recipient dollars and moved part of her salary into the administrative category. Some of the money paid to other charities was repaid, Gustafson says, at her insistence.

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