Giving | What happened to News Corp.'s big gift?

As a "founding partner," the company contributed $10 million toward construction of the Newseum, a museum about news developed by the Freedom Forum journalism foundation in Washington, D.C. Initially budgeted at $250 million, it eventually cost nearly twice that amount when it opened in 2008 -- three years late. Following is an update on spending by the foundation and the museum.

[The Newseum opened in 2008 in Washington, D.C.]

The non-profit Freedom Forum foundation and its signature project, the Newseum in Washington, D.C., paid $1.4 million in bonuses to its top employees in 2008 -- a year when the foundation's endowment suffered multimillion-dollar losses, and the museum began a series of layoffs that extended through last year, newly released public documents show.

The bonuses included $375,000 to Freedom Forum Chairman and CEO Charles Overby (left), bringing his total 2008 pay to $991,044 in compensation and expenses, the documents show. The museum's then-president, Peter Prichard, got a $225,000 bonus; his total pay and expenses for the year were $665,927, the documents show.

The pay packages emerged in annual Internal Revenue Service tax reports for 2008, made public under IRS regulations. They are the most recent IRS reports filed by the two organizations, so do not include payments for last year. I received copies of the reports over the weekend after requesting them last week from Freedom Forum.

The 2008 bonuses included amounts deferred from the previous five years that were "contingent upon successful completion" of the Washington complex that houses the Newseum, plus Freedom Forum's offices, an apartment building, a restaurant and other facilities on Pennsylvania Avenue, the documents show. For example, Overby got a $100,000 bonus "based on 2007 performance," plus $275,000 in contingent bonuses from 2002-2005, the documents show.

The non-profit journalism foundation was established in 1991 by former Gannett Chairman and CEO Al Neuharth, with $650 million in assets from the old Gannett Foundation. The foundation and the Newseum, a museum about news, are managed by Overby and a number of other former Gannett executives and employees.

The Newseum complex's projected cost started at $250 million. But it mushroomed quickly, ultimately costing $450 million by the time it opened in spring 2008 -- three years late, according to my review last year of Freedom Forum and Newseum documents and IRS reports. Since its opening, the Newseum has struggled to control expenses; layoffs and other measures have reduced staff by 23%.

My review last year showed the foundation had given at least $67,500 to an adoption agency in Cocoa Beach, Fla., started by Neuharth's wife. Those gifts were among hundreds of grants made in 2000-2007 to non-profit groups that seemed to share little in common with the foundation's mission to support free press and free speech.

The 2008 returns show that Neuharth, 85 (left), was paid $225,000 in compensation, and another $231,953 in unspecified expense reimbursements. He did not receive a bonus. Neuharth worked an average of 40 hours per week, and his title is listed simply as "founder,'' the documents show. With his 2008 pay, Freedom Forum has now paid Neuharth nearly $1.3 million in compensation and expenses since 2006 alone, public documents show.

I've asked a Freedom Forum spokesman to explain the criteria for the bonuses, as well as its board of trustees's role in their approval. I also asked about the duties Neuharth performed for his compensation.

Freedom Forum and the Newseum are legally separate entities, each with their own governing boards. (Here's the Newseum's board of trustees.) The two boards have considerable overlap, however, and both include many long-time Neuharth associates; one member is his daughter, Jan Neuharth.

Overby and Prichard, who retired last year, have been the highest-paid employees of the two organizations for several years. In 2007, when no bonuses were paid, Overby got $577,024, and Prichard got $397,690, that year's tax reports showed. Prichard was a former top editor of USA Today before joining Freedom Forum and the Newseum. He was replaced last year by Ken Paulson, who also was USA Today's top editor at the time.

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