Foundation Officials Agree to Pay $1.9-Million to Settle Compensation Dispute in New York

The State of New York has recovered nearly $2-million from officials of the William T. Morris Foundation as part of a settlement agreement announced this month. The state had alleged that the foundation overpaid the officials for their work.

Attorney General Andrew Cuomo of New York said the $1.9-million paid to settle claims against two officers and a board member of the foundation will go back into the foundation’s coffers so that it can make more grants to charities. The 70-year-old foundation, based in Delaware, does business in New York.

“Our goal is to help nonprofit organizations flourish and meet their charitable mission,” Mr. Cuomo said in a statement. “When board members violate the public trust by lining their own pockets, the good work of the foundation is diminished.”

In addition to making a financial payment to the state, the foundation has agreed to hire a new board of directors.

The attorney general said that President Bruce A. August and a former president, the late Edward A. Antonelli, were overpaid for managing the foundation’s portfolio and serving on its board.

In 2001, Mr. Antonelli received $809,750, while Mr. August, who was secretary, received $736,750.

Wilmot F. Wheeler, another board member, also settled with the attorney general.

In addition to being overpaid, the attorney general said, all three men received benefits from the foundation that Mr. Cuomo described as overly generous.

Mr. Cuomo said his office is continuing to investigate other employees and officials of the Morris foundation.

The foundation, established with manufacturing money in 1937, supports mainly large charities such as colleges, hospitals, and museums.

A lawyer for the foundation said in a phone message that he would be unable to comment.