Region's BBB has $4.7 million budget

By Peter Lewis
Times consumer-affairs Reporter

STEVE RINGMAN / THE SEATTLE TIMES Bob Andrew, president and CEO of the Better Business Bureau of Oregon, at his office in DuPont, Pierce County.

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It's been a long, steady climb for Bob Andrew, the man at the helm of the Better Business Bureau of Oregon and Western Washington.

Some in the BBB system refer to him as "Pac Man" because he keeps gobbling up bureaus.

Andrew started out with the Tacoma BBB in 1981 with a $66,000 budget and a full-time staff of two, including him. "It was 147th out of 147 bureaus," Andrew said recently.

Twelve years later, the Tacoma and Seattle BBBs merged, becoming the BBB of Western Washington, with Andrew in command.

In 1997, the bureau joined with the BBB of Oregon and Southwest Washington to form the existing BBB, which has a staff of 70 and revenue last year of $4.7 million. It vies with the BBB in Southern California as the richest bureau in the country, though a head-to-head comparison is difficult because of different accounting methods.

And Andrew's bureau recently got bigger when it acquired Alaska's BBB. Consolidation of BBBs is part of a national trend to pool resources in order to remain viable.

More than 9,000 companies

Andrew's BBB has more than 11,500 members when counting businesses with multiple outlets, such as banks and tire dealers. Counting by company name, the number is closer to 9,000. Last year Andrew earned a salary of about $218,000, plus $14,000 in employee benefits and a $6,000 expense account, according to tax records.

His compensation is in line with the nearly $250,000 received by Bill Mitchell, his counterpart in Southern California.

While BBBs are all about providing information on businesses, Andrew was reluctant to share information about his own, a private nonprofit organization.
 
Andrew tried to block release of his organization's tax returns, even after The Seattle Times produced IRS rules showing that tax-exempt groups such as his must make them public on request.

Andrew said he initially resisted their release — and had a lawyer contact the newspaper to argue they were not public — because it was a "legal" matter. At the same time, Andrew told a national BBB official that he was reluctant to turn over the documents because he didn't want his salary released.

Almost a month after it was first requested, Andrew produced the BBB's 2002 tax return and then, later on, returns for other years. By contrast, officials at other BBBs and the Council of Better Business Bureaus made their tax returns available on request.

The 2002 and 2003 tax returns list total expenditures as required but do not show how much money was spent on program services rather than administrative overhead and fund raising.

"C-6" groups, such as the BBB, can legally omit such details. A number of other bureaus do.

But some bureaus choose to file more detailed returns, as does the CBBB, said spokeswoman Holly Cherico, "to comply with our policy of full and open disclosure of the Council's financial operation."

A CEO since 1981

Andrew earned an MBA at the American Graduate School of International Management in Glendale, Ariz., where he was recruited by Hallmark in 1971. He worked there in sales and marketing positions until 1976 and then joined his father-in-law's expanding jewelry business in Tacoma, where he worked until 1981. He joined the Tacoma BBB's board in 1978, taking over as CEO three years later.

"I love my job and the BBB and what we do each day for the public," he said.

A tall, trim man, Andrew is a young-looking 61. He lives with his wife of 38 years, Susan, who, until she retired two years ago, had worked alongside him at the BBB for 20 years.

They live in Steilacoom, near the BBB's new headquarters in DuPont. Construction of the facility was finished in 2002.

Andrew helped finance the project by making a personal loan of $100,000, at 8 percent interest, by taking out a second mortgage on his home.

The new BBB building and land it sits on carry an assessed value of nearly $2.4 million, according to Pierce County records. Andrew says the personal loan was unconventional, "but necessary from my point (of view)."

During his stewardship, the BBB has won two Marshall Mott awards — the most prestigious award bestowed on bureaus. It reflects "overall excellence in bureau communications" with the community and its members, according to Ron Berry, a senior vice president with the CBBB.

Shifting focus?

Some who have watched Andrew's bureau grow wonder if its priorities have subtly shifted away from consumer protection and toward building revenues.

Jim Bordenet, a retired U.S. postal inspector and former member of the Consumer Protection Roundtable, an informal group that meets to discuss a broad range of consumer issues, said Andrew's predecessor regularly attended the roundtable meetings and was "consumer oriented."

Andrew doesn't regularly attend those meetings, and his style is decidedly different, Bordenet said.

Under Andrew, the BBB became more aggressive about generating revenue by recruiting members and at one point charged consumers for services.

Andrew said he assessed that charge as part of a CBBB experiment in the mid-'90s "because so many bureaus were struggling. ... We wound it down and said goodbye to it."

Andrew strongly disputes the assertion that consumer protection has taken a back seat under his leadership. Without growth and the revenue that comes with it, "we can't help the consumer," he said.

Members of the local BBB's executive board of directors support Andrew.

Vice Chairman John Gilchrist, owner of Gilchrist Chevrolet of Tacoma, calls him "an outstanding CEO."

"I've been around that man for a long time and everything he does is first rate and first class and the consumer is the No. 1 thing for him."

Peter Lewis: 206-464-2217 or plewis@seattletimes.com