Are business dealings between the Hogle Zoo and some members of its board of directors entangled in conflicts of interest?
That question and others are being examined in a legislative audit that is probing the zoo's overall operations and future, as reported on a KSL-TV Thursday night.
The zoo's board and executive director deny such conflicts of interest.
In the 1999 and 2000 $15 million was spent on total zoo operations. A small amount of that money was paid to companies where zoo board members have some financial interest.
For example, board member Michael D. "Mickey" Gallivan is managing partner of Salt Lake advertising agency Riester Robb Harris & Love. That company was paid $461,231 by the zoo for advertising work during 1999 and 2000.
"There has always been full disclosure from the very beginning," Gallivan said. "We've always seen it in the zoo's favor."
He said his company has tried to provide ad services to the zoo on a cost-only and no-profit basis but has lost money every one of the four years it has served the zoo. He said his ad company lost $42,000 last year serving the zoo.
Craig Dinsmore, executive director of the Hogle Zoo, said Gallivan's company won the bid four years ago in a fair bid process that was not just based on price but also quality. He also stressed that Gallivan did not use his position to sway the board into taking a contract from his company.
"They've given us good value," Dinsmore said. "We've tried to make this as open and fair as possible."
He said if the zoo can receive the best value and service from the company that a board member is involved with, then why not use it?
"It's all a matter of perception," he said, "but as long as we can do it up front."
While Zoo Board president James E. Hogle Jr. is an insurance agent, he said that "at no time have I ever been an underwriter or recipient. I'm not involved directly."
He said the zoo spent $978,600 on insurance premiums with several insurance companies over a two-year period. He said he only received a small commission split for a small portion of the total amount.
Dinsmore said Hogle Zoo has been changing so much in recent years that it has attracted many critics.
"We're just doing what we need to do in the best way we can. Some controversy comes with that."
Russ Behrmann, president of the Better Business Bureau of Utah, said his group has adopted standards for nonprofit organizations. Although the zoo isn't a charitable group that solicits donations like those specifically defined by the bureau, he said that taking steps to separate any potential conflict of interests is always a wise, general business practice.
"Use caution in avoiding conflicts of interest," he said.
Behrmann agrees there are some potential advantages to such situations, because members of a board understand what an organization needs and could save them money.
"Having a bid process is the best protection" for avoiding bad publicity later, he said.
Gene Baierschmidt, executive director of the Humane Society of Utah and a recent critic of Hogle Zoo — particularly its animal care — said he isn't surprised with these latest allegations against the zoo. "They're very secretive," he said.
Hogle Zoo is a partially taxpayer-funded attraction at the mouth of Emigration Canyon. The Salt Lake County Zoo, Arts and Parks (ZAP) tax accounts for about $1.6 million of the zoo's annual budget. The Utah State Legislature gave the zoo $1.9 million for its operations last year. The Utah Zoological Society owns the zoo facility.
The zoo's expenditure of some $6 million last spring for a new entryway plaza, plus discussion about a possible new future location for the zoo — where it has more room — prompted the state audit.
John Shaff, deputy director of legislative audit for the state, said the zoo audit is about much more than just finances. It also involves future projections onthe zoo's current location serving the state's population in the future.
Lawmakers will consider the audit's findings during the Utah Legislature.
Slightly more than 710,000 people visited Hogle Zoo during 2000, down 8.5 percent from 1999.