With its $500,000 revival of Where the Wild Things Are now running at the Chicago Theatre, Chicago Opera Theater (COT) is facing what must be the wildest financial mess in its 16-year history. The trouble appears to have developed during at least the last two years of former general manager Marc Scorca's tenure at the organization. After a six-year stint with COT, Scorca departed last June in a blaze of glory to become executive director and CEO of OPERA America, a Washington, D.C.-based trade organization serving professional opera companies in the U.S. and Canada.
But there was nothing glorious about the state of COT when Scorca left. Chief among the problems now facing the organization is a total of approximately $200,000 in operating deficits accumulated over the past two fiscal years, plus a bill for about $100,000 in payroll withholding taxes that were not paid during the last six months of Scorca's tenure. Failure to make timely payroll tax payments is a federal offense. Stephen Mack, an accountant with the firm of Ernst & Young who became treasurer of COT's board of directors last July 1, said he did not discover the payroll tax problem until he went to the COT offices in July. Scorca said he informed the board's executive committee of the withholding tax problem last June, but that the full 42-member board did not hear of it until August.
Though efforts appear to have been made to keep quiet the full extent of the troubles facing the organization, talks with outside sources and COT board members as well as former and present employees indicate that as long ago as October 1989 the board of directors had reason to question the internal financial management of the company. At that time Christine Karczewski, the company's former in-house accountant, says she sought legal counsel and drafted a letter to the entire board in which she raised concerns that, as she says now, "things were not being handled appropriately from a financial standpoint." A day after Karczewski mailed the letter to the board, Scorca dismissed her because, he says, he needed someone with more accounting skills. Scorca says he later saw a copy of the letter, but claims the problems Karczewski raised had to do with errors she made in keeping the company's financial records.
Immediately after firing Karczewski, Scorca hired C. Derrick Land as director of finance. With an MBA from Southern Methodist University, Land impressed Scorca as having the necessary accounting skills to handle the organization's increasingly complex financial records. During the period between November 1989 and April 1990, Scorca left Land to maintain those records while he busied himself with a number of other projects related to the opera company's grand plans for the future. Those included COT's $8-million plan to renovate the Athenaeum Theatre on the north side as a permanent home for the company (that plan is now on hold) and a study of the downtown Oriental Theatre as a possible site in lieu of the Athenaeum.
But if accountant Land was a big improvement over his predecessor, the evidence is now hard to find. According to Scorca, Land walked into Scorca's office last April, dropped his keys on the table, and left. (Board treasurer Mack said that so far as he knows no one on the board has seen or heard from Land since.) Scorca says that he then inspected the COT books and found them in a state of confusion. A part-time bookkeeper was brought in to begin sorting through the mess.
Concurrent with the problems in COT's finance department, problems of another sort were brewing elsewhere, with the company's ambitious plan to mount a $500,000 revival of Carousel last June at the Shubert Theatre. In his budget for fiscal year 1990, Scorca optimistically--too optimistically say some--projected the production would produce a surplus of $60,000. But because of what Scorca described as the "surprises of doing a different kind of production such as Carousel," the show wound up with a surplus of only $6,000 rather than the projected $60,000, a shortfall that contributed to the cumulative deficit of approximately $200,000 over the past two fiscal years. COT board treasurer Mack put the problem with Carousel somewhat differently, saying he believed the various union contracts involved in mounting the production were not fully understood by COT management.
Only as Scorca prepared to leave town to join OPERA America last June did he begin to enlighten the COT board of directors about the problems they faced. When many of the board members found out belatedly about the situation, they became angry, according to several sources. But COT board chairman Marilyn Arado, a close friend of Scorca's, felt it was too late to demand much of an accounting from him. "Marc already was in transition to OPERA America," she explains.
As Arado must know, the COT board of directors has to shoulder at least some of the blame for the company's problems, because they did not more closely monitor management of the organization. In a final act of inexplicable goodwill that now has some board members perplexed, the board threw a farewell reception for Scorca, a salute that Arado still believes was justified. "Marc did some good things for Chicago Opera Theater," she says. Surely the way he left was not one of them.
Scorca continues to serve at OPERA America, an organization with an annual operating budget of $750,000. Asked about the situation at COT and Scorca's tenure there, OPERA America board president Ardis Krainik, who is also general director of Lyric Opera of Chicago, reaffirmed her confidence in Scorca. "No one from Chicago Opera Theater has called me," said Krainik, adding, "I have nothing but good things to say about Marc Scorca until someone proves me absolutely wrong."
Art accompanying story in printed newspaper (not available in this archive): photo/Loyd DeGrane.