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Clancy’s dream of a charity crumbling

Foundation for ill children now plagued by accusations, probes

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In 1992, author Tom Clancy embarked on a philanthropic mission worthy of Jack Ryan, the idealistic hero of his popular techno-thrillers.

Clancy wanted to help children who had cancer and other grave illnesses use the nascent technology of the Internet to talk with one another and learn about their diseases.

The children's health network he imagined would also enable parents to search out the best doctors, no matter how disadvantaged or isolated the family might be. And it would let doctors tap into the same worldwide database to share their expertise and find the latest research.

Clancy's inspiration was a 6-year-old Long Island, N.Y., boy, Kyle Haydock, who sent him a fan letter while the boy lay in his bed at Memorial Sloan-Kettering Cancer Center in New York City, ravaged by sarcoma. At the height of his fame, Clancy fell hard for Kyle and befriended him. He showered the boy with gifts, visited his hospital room and even wheeled him around Disney World. "This little guy was a fighter," he later wrote in an essay.

After Kyle died in 1991, Clancy set up a foundation and named it for the boy. He donated more than $4 million from his fortune and committed one-third of the proceeds from his next Jack Ryan movie, according to his lawyer and foundation records.

Clancy also used his fame and political connections to persuade others to donate several million dollars more in cash and services. The captains of powerful companies like Viacom joined the foundation's board, as did big-name friends like the actor Tom Selleck.

But seven years later, Clancy is scuttling the Kyle Foundation, which despite having spent more than $5 million on travel, salaries, fund raising and furniture did not even have a Web site to show for its efforts.

The demise of one of the nation's more than 700,000 charities typically unfolds without public scrutiny. Nameplates are removed from doors, checking accounts are closed, and the directors move on without comment. But the legal mud fight that has broken out in a Denver courtroom over the failure of the Kyle Foundation offers a rare glimpse at the inner workings of a celebrity charity.

What went wrong is a matter of heated dispute. Clancy, in court papers, accuses the woman he hired to run the foundation of mismanagement and improper expenditures. She vehemently denies that accusation and says Clancy killed off the project at the very moment it was about to succeed.

In an unusual step, the IRS is examining the charity's financial records to decide whether to revoke its tax-deductible status. Donors would have to pay back taxes on their gifts if they had reason to know the foundation was not performing its mission.

The IRS, Clancy has said in a letter to the foundation's board, is "citing long delay in product rollout, limited charitable work to date, high foundation expenses for salaries, travel and fund raising."

Friends and associates say they do not blame Clancy for undertaking what they see as a visionary project. Several, however, faulted him for failing to keep a closer eye on a venture whose success hinged on the deft use of an infant technology.

A board member who ran a $29 billion computer company said he twice told Clancy in 1997 that the foundation was floundering and that its management was weak.

The 53-year-old writer, who is completing his 11th novel, brushed aside such warnings and did not act until last summer, when he dispatched an accountant and then a retired Navy vice admiral to take a closer look at the operation, board members said.

Their reports in hand, Clancy sprang into action.

On Feb. 11, a Friday morning, he summoned the foundation's executive director, Katherine Gorshow, to his Maryland home and demanded that she resign, according to court papers. Then, before she could fly back to its offices in Englewood, Colo., he sent a team of former agents from the FBI to secure the premises and change the locks.

It was an abrupt ending to a partnership that grew from a chance meeting on the Internet to Gorshow's participation last year as bridesmaid in Clancy's wedding.

Now, Gorshow is suing the foundation, accusing it of breach of contract in a state court in Denver, saying in court papers that she had made "significant progress" toward taking the health network online later this year. Indeed, new backers of the foundation, including Sybase Inc., a software company, continue to express enthusiastic support for the project.

Clancy replied in court filings this month that Gorshow misused foundation money for private purposes, including personal travel. Gorshow denied the accusations through her lawyers. Clancy declined to be interviewed for this article, saying, "I'm gagged."

Kyle's mother, Eileen Haydock, of Baldwin, N.Y., said she began having doubts about the foundation several years ago and discouraged her friends from contributing. Still, Haydock said she had nothing but admiration for Clancy and his efforts to honor her son and help sick children. "I think he felt that he had let down my son," she said, "and that's not true."

There was little about Clancy's life that prepared him for starting a multimillion-dollar foundation. He majored in English at Loyola College in Baltimore, then sold insurance to tobacco and corn farmers on the Chesapeake Bay.

The unexpected success in 1985 of his first novel, "The Hunt for Red October," began a lucrative career that led to a string of best-selling novels and popular movies made from them.

His financial empire grew to include more than a dozen businesses that have produced not only his major books like "Patriot Games" and "Clear and Present Danger," but also videogames, military manuals and serial novels written with others. He bought a share of the Baltimore Orioles baseball team, and under his latest deal with Putnam Publishing he earns $19 million for each novel completed, according to court records.

Associates say Clancy's considerable fortune has attracted people with a host of causes and offbeat investment opportunities.

"He was a very, very trusting man," said Diana Patin, Clancy's former, longtime secretary. "He accepted people as they put themselves to him."

In the mid-1990s, Clancy and his first wife, Wanda, lost $1.3 million to a coin dealer who is to be sentenced on Friday for defrauding them and dozens of other Maryland residents. In 1996, Clancy put $1 million into a company building a space vehicle that uses a propeller to land like a helicopter. The company has since scaled back its operations because of a lack of money.

And, more recently, Clancy has helped a former CIA operative turned cartoonist, Chip Beck, finance his investigation into whether the U.S. government abandoned some of its troops taken prisoner in wars fought in the 20th century. "He gives people the chance to prove themselves," Beck said.