Mayor Thomas M. Menino's administration is seizing greater control over Boston Public Library trust accounts worth tens of millions of dollars, a move that, following the effort last year to remove the library's president, is spurring new criticism that Menino is waging a power play.
The roughly 180 trust accounts, some more than 150 years old, contain donations from benefactors small and large and are currently valued at about $54 million.
This month, the city's chief financial officer, Lisa Signori, notified the library's outgoing president, Bernard A. Margolis, that the use of trust funds will now be subject to oversight by City Hall. The library will have to submit individual invoices to city officials, who will review them and, if approved, dispense money from the trusts. Previously, the city gave the library a lump sum annually from the trust funds, and the library decided how to spend and then disbursed the money.
Although there have been no indications of problems in the library's handling of the funds, Signori said in an interview that the city is the legal custodian of the trusts and wants to make sure proceeds from the funds are being used properly.
In response to the city's move, Margolis, who is leaving in June after being forced out by Menino, said city officials are overstepping their authority. In an escalation of the conflict, he ordered his accounting staff to stop sending overdue fines and other funds, including grants, collected by the library to City Hall. He also called on Attorney General Martha Coakley to intervene.
"I can't stress enough the seriousness of keeping the library's trusts independent of the political process," he said yesterday in an interview.
The dispute reflects a much larger battle for authority over the venerable library, with its main branch on Copley Square one of the oldest libraries in the nation. City Hall officials maintain that the library is theirs to manage, like other departments such as parks, transportation, and public works.
But Margolis, other library officials, and some outside library boosters say it is an autonomous nonprofit institution that should be given free rein to operate in its own best interests.
State law places responsibility for the library in the hands of a nine-member board of trustees, each appointed by the mayor. The board's independence has come under fire since November, when it voted to oust Margolis.
Margolis lashed out publicly at Menino after the vote, comparing the mayor's governance to an authoritarian regime. He said officials in the Menino administration had forced him to hire certain people, ostensibly for political favors. And he warned that Menino had an "anti-intellectual bent" that would threaten the library's integrity. City officials countered that Margolis paid too much attention to the main library in Copley Square, at the expense of the city's 27 branch libraries.
The State Ethics Commission launched an investigation in November to determine whether Menino illegally ordered Margolis to hire certain people, according to a senior public official with direct knowledge of the probe. That investigation is ongoing, said the official, who spoke on condition of anonymity.
Some library supporters say Margolis's ouster combined with City Hall's latest demand for trust fund oversight suggests that the mayor, not the board of trustees, is calling the shots.
"We have all been living a fantasy, that the library had become an independent beacon of culture and thought," said Scott-Martin Kosofsky, an author and designer who previously served 11 years on the board of the Associates of the Boston Public Library, a support organization. "But in fact this existed only at the mayor's whim, and you can see how quickly the carpet can be pulled from under it."
The chairman of the trustees, lawyer Jeffrey B. Rudman, has invited Signori to the next board meeting March 11 to explain her move to assert greater control over the library's trust funds.
"The trustees will never voluntarily relinquish the control of those trust funds or the right to ascertain donor intent, which is sovereign," he said yesterday in an interview. "What we owe City Hall and what we owe the public is transparency. We don't owe anybody obedience."
Emily LaGrassa, a spokeswoman for the attorney general's office, declined to say if Coakley would intervene as requested by Margolis, saying the office, as a policy, does not discuss its reviews.
Wealthy benefactors have donated to the Boston Public Library since at least 1848. Donors with money currently in trust have ranged from a North End fruit vendor and a Malden high school counselor to prominent artists and lawyers. The Boston Globe donated money in 1990 to endow literacy programs at the library.
When donations are received, trust funds are set up with conditions of use. Currently, purposes range from funding reading programs in Dudley Square to supporting the upkeep of rare manuscripts in Copley Square.
Under current practice, the library trustees approve formation of the trust funds and transfer custody of the funds to City Hall. City Hall then forwards trust proceeds - dividends and other returns on investments - in a lump sum annually to the library.
Library trustees decide what to spend the money on, in accordance with donors' instructions, and library staff members cut the checks. Library staff members also reconcile the books and file annual reports and tax returns for the board of trustees, which is operated as an independent, nonprofit corporation.
Signori, the city's collector-treasurer, said her office will no longer be giving the library lump sums. Instead, she said, the trustees will now have to submit invoices to City Hall for processing and payment. If Signori or her staff members believe the expenses do not match donors' intent or if there is another problem, she says she will raise an issue with trustees.
Margolis has the backing of at least one trust fund donor, who said yesterday that City Hall's demand for greater oversight is causing her to think about asking for her money back. Anne Bromer, and her husband, David, who own a rare book store in the Back Bay, donated $110,000 to the library two years ago. Anne Bromer said she wants the state to pass legislation removing the library from all city control.
"This is a terrible, terrible thing," Bromer said yesterday. "This library has been built on the greatest confidence of people like myself. It is one of a handful of the greatest public institutions in America, but this mayor doesn't care. The treasures are phenomenal, and he's going to wreck it. He's got to be stopped."
But Signori insists the Menino administration does not want to interfere with trustees' decisions about expenditures. She said it is her duty under state and city laws to review them. She said she recently discovered that her office had no detailed accounting of the spending and is legally responsible for that accounting.
"I'm only trying to fulfill my fiduciary responsibility as the city's collector-treasurer," Signori said. "The way the trust expenditures are currently managed, I am unable to monitor them to see if they are in compliance with the intentions of the donors. This is about transparency."
Donovan Slack can be reached at dslack@globe.com.
