Ellison opposes appointment of Otto Bremer Trust trustee’s daughter

A Ramsey County District Court judge on Friday will hear an peculiar request from the Minnesota Attorney General s office which hopes to remove a recently-appointed trustee from the helm of one of the state s oldest philanthropies or at least slash her salary impose training requirements and institute safeguards against future family appointments When Charlotte Johnson retired last August after years as one of the three leaders at the helm of the Otto Bremer Trust she appointed her daughter as her successor Until then Caroline S Johnson had served as a Bremer Bank branch manager in New Richmond Wis a rural district of chosen residents Based in St Paul the billion philanthropy has been a major owner of the bank since its inception in and the charity s three trustees have chosen their own successors for the past years Those concerns reverberated with Ellison s office which regulates charities With her move from neighborhood banker organization lead to trustee Caroline Johnson became one of three co-chief executive officers of the multi-billion dollar philanthropy overseeing Bremer Bank The bank is one of the state s largest farm lenders and just now merged with Indiana-based Old National Bank Efforts to get comment from Caroline Johnson and the trust s attorneys for this story were unsuccessful as of Thursday morning Ellison raises issues of nepotism Her annual salary according to the attorney general s office increased nearly tenfold from to Her resume according to the attorney general s office did not reveal deep credentials administering sizable charities beyond her family roots In the Otto Bremer Trust issued million in grants and low-interest loans to charitable causes across Minnesota Wisconsin North Dakota and Montana The attorney general s office as representative of the charitable interests of the community does not have sufficient assurances that the selection is in the best interest of the beneficiaries reads an April legal filing from Ellison s office Rather trustees continuing pattern of nepotism substantially undermines the trust of the citizens whom trustees are supposed to serve Ellison s office noted that while trustees have a tradition of choosing their own successors state law requires that they must comply with their fiduciary duties of care and loyalty when exercising that discretion and that breaching those duties cannot have been the founder s intent A hearing before Judge Mark Ireland is scheduled for a m Friday at the Ramsey County Courthouse in St Paul Trustees defend Johnson In their legal response to the attorney general s office attorneys with Ciresi Conlin wrote that Ellison s office has never provided any evidence that her removal is necessary to best serve the interests of all beneficiaries Instead it would in fact be inconsistent with both years of practice and Otto Bremer s express preferences spelled out in the trust s founding documents that trustees select their own replacements The attorney general s office relies primarily on arguments it made and lost three years ago when the office attempted to block a bank sale in court the attorneys wrote This court has already rejected the attorney general office s campaign against what the office terms nepotism Charlotte did all she was required to do and Trustee Caroline has faithfully administered the Trust since then Charlotte and Caroline Johnson have joined the Otto Bremer Trust in objecting to the attorney general s petition and defending her credentials as have trustees Daniel Reardon and Francis Miley who both submitted affidavits to the court Caroline Johnson s previous citizens organization has included sitting on the board of directors and finance committee of the St Croix Valley Food Bank during its capital campaign serving on the board of directors of the Encampment Forest Association Minnesota Land Trust and serving for five years on the board of directors of the St Croix County United Way specifically its grants committee Reardon noted that Otto Bremer selected his grandfather his trusted tax consultant as a trustee who later selected his father who later selected Reardon He praised Caroline Johnson s high emotional intelligence and commented her intimate knowledge of both banking and relationship building were assets during the up-to-date bank sale I have known Caroline for over years and have seen her evolve and grow both personally and professionally Reardon wrote noting she had previously worked for Bremer Bank for seven years This direct boots-on-the-ground experience in a Bremer branch bank was an excellent way to learn about the banking industry as well as Otto Bremer s philanthropic vision for the Trust Reardon wrote Like me Caroline grew up surrounded by the Trust She learned about a life of organization to Otto Bremer s vision at the dinner table by joining Charlotte on Trust retreats and other events over the last years Ellison s office appealed that the court adjust her salary and consider reviewing Caroline Johnson s skills and abilities and imposing training requirements and or independent advisors as needed In her affidavit Caroline Johnson noted she in recent months received a certificate from University of Minnesota Continuing and Professional Studies for completing a class on Leadership Essentials She also completed another program on Introduction to Trust Administration at the University of Sioux Falls Asking for actions expected of a large nonprofit Ellison s office has required that even if the court does not remove Charlotte Johnson that it require a more formal appointment process moving forward Ellison s office previously alerted the courts they will take a hard look at the selection process if a trustee appointed a family member as a successor commented Brian Evans a spokesperson for the attorney general s office Charlotte Johnson did not use any kind of objective process such as collecting a pool of qualified candidates applying objective criteria to narrow those candidates and then making a selection applying those criteria that best serves interests of the inhabitants whom the Trust serves revealed Evans in an email Despite the fact that Trustees justify their substantial compensation by comparing themselves to CEOs of large nonprofit foundations Johnson did not take the efforts expected of a large nonprofit when replacing a high-level executive he wrote Previous efforts at removing trustees The attorney general s office has sought to remove trustees before In August Ellison s office accused three trustees of attempting to inflate their compensation through a bank sale among other forms of self-dealing Following a -day bench trial Judge Robert Awsumb chose to remove Brian Lipschultz as a trustee but retain Reardon and Charlotte Johnson Lipschultz filed legal appeals but they failed to sway the Minnesota Court of Appeals and Minnesota Supreme Court He in the past few days filed a legal request to have the Otto Bremer Trust pay his legal fees Bremer Bank completed its sale to Old National earlier this month creating the third-largest bank to the Twin Cities as measured by deposits and one of the top banking companies headquartered in the U S As a end of the merger the Otto Bremer Trust will retain an ownership stake in Old National and Reardon will join the Old National board of directors Related Articles Agents Feeding Our Future suspect tried to flee after St Paul raid One person revived the Memorial Day flags tradition at Fort Snelling National Cemetery Here s why U of M researchers are planting survivor trees in hopes of defeating Dutch elm infection Judicial cookout for the homeless renamed for late founder Jim Randall In th year Rick s Bike Sale surpasses K in donations for Dakota County nonprofits