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Kellogg Foundation Suspends South African Operations

October 31, 2008
Gregory A. Lyman 269-969-2079

PRETORIA, South Africa – The W.K. Kellogg Foundation today announced it has suspended operations in southern Africa for the duration of a financial audit of its Pretoria office. The Foundation also has asked James A. Joseph, the U.S. Ambassador to South Africa from 1996 through 1999, to help the Foundation restructure its programming in the region.

Sterling K. Speirn, president and CEO of the Foundation, said “we are of course distressed that our important work in the region has been compromised and will take all necessary steps to determine the facts, take action against those responsible, make every effort to recover the missing funds and redirect them to worthy beneficiaries.  We will also take steps to strengthen our administrative systems to prevent a reoccurrence of this highly regrettable incident.”

Retaining Ambassador Joseph, President Emeritus of the Council on Foundations and now a professor at Duke University, “underscores our commitment to southern Africa,” Speirn said, noting that the Foundation has awarded more than $350 million in grants to southern Africa recipients since beginning operations on the continent in 1986.

“Ambassador Joseph’s stature, record of achievement, and reputation for integrity gives us great confidence in our ability to continue serving children and communities in Botswana, Lesotho, Malawi, Mozambique, South Africa, Swaziland, and Zimbabwe.”

Foundation spokesperson Gregory A. Lyman, senior vice president and corporate secretary, said preliminary indications from the audit are that several hundred thousand dollars may have been diverted illegally, and that the final amount may be higher depending on the audit result.

In the meantime, all financial transactions have ceased and all assets have been secured until the forensic audit is complete, Lyman said, adding that the auditors and Foundation attorneys are working closely with South African law enforcement authorities to conduct a thorough and proper investigation.

Ambassador Joseph’s role will be to advise Kellogg Foundation management on its program in the region until all Pretoria issues have been resolved and steps taken to ensure that Foundation operations in southern Africa are sound and serve the people of the region.

Lyman said Ambassador Joseph is “the ideal person” to help the Foundation set its future course in Africa, noting that the Kellogg Foundation first consulted the Ambassador almost a quarter-century ago when the Foundation first made the decision to expand operations to the region.

Joseph served as Ambassador to South Africa from January 1996 to November 1999, and was the first and only U.S. ambassador to present his credentials to President Nelson Mandela.  In recognition of Joseph’s contributions, South African President Thabo Mbeki awarded him the Order of Good Hope, the highest honor the Republic of South Africa bestows on a citizen of another country.

Established in 1930, the W.K. Kellogg Foundation supports children, families and communities as they strengthen and create conditions that propel vulnerable children to achieve success as individuals and as contributors to the larger community and society. Grants are concentrated in the United States, Latin America and the Caribbean, and the southern African countries of Botswana, Lesotho, Malawi, Mozambique, South Africa, Swaziland, and Zimbabwe. For more information, visit www.wkkf.org.
For further information, contact:  Brian Gibson +27 11 880 1510 (w) or +27 83 253 5988 (m)

More about James A. Joseph

Before serving in South Africa, Joseph was the first chairman of the board of directors of President Clinton’s Corporation for National Service.  He also has served three other U.S. Presidents: as interior undersecretary and chairman of the presidentially appointed Commission on the Northern Mariannas under President Carter; as a member of the Advisory Committee to the Agency of International Development under President Reagan; and as an incorporating director of the Points of Light Foundation and a member of the Presidential Commission on Historically Black Colleges under President George H. W. Bush.

Joseph also was president and chief executive officer of the Council on Foundations from 1982-95, and a vice president of Cummins Engine Co. and president of the Cummins Engine Foundation from 1971-76.

A Louisiana native who has served on a number of boards, Joseph is the recipient of many honorary degrees, and is a former civil rights activist in Alabama.  He is the author of two books, The Charitable Impulse (1989) and Remaking America (1995) and is now at work on a book that focuses on ethics in public life.  He has taught at Yale Divinity School and the Claremont Colleges, where he was university chaplain.

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