Bellevue Arts Museum official an embezzler?

The Bellevue Arts Museum is facing another round of financial questions after officials said that the chief financial officer embezzled about $200,000 from the museum.

The woman, who had worked for the museum for two years, was evicted from the building earlier this month when account discrepancies revealed the embezzlement, according to a letter sent to museum supporters last week.

"Museum leadership is actively seeking restitution from its former employee who has indicated a desire to make full repayment," wrote museum Executive Director Michael Monroe.

Museum officials say they have not asked Bellevue police for help and do not want the police investigating while they try to sort things out internally and work with the woman on a restitution plan.

Unless the museum files a criminal complaint, police say, they will hold off. "If they need us, we're here," said Bellevue police spokesman Greg Grannis.

The woman's resignation comes less than four years after the museum closed because of weak leadership, low attendance and accounting problems.

Since the museum reopened in June 2005, it's been a different story, officials say. Monroe and new board members say they've lured back donors and attracted 100,000 people to a new slate of exhibits.

"I'm confident that we'll see our way past this incident and continue to grow," said Keith G. Baldwin, president of the museum board. "We're a better museum than we've ever been before."

Museum leaders say they have hired an outside attorney and a forensic accountant to investigate and will look at the museum's accounting controls and oversight by staff and board members.

Officials did not provide many details about how the money was taken but said the employee was able to get around their checks and balances because of her elevated position.

She "was as familiar as anyone with our accounting controls and knew how to circumvent them," Baldwin said.

Bellevue Mayor Grant Degginger said the allegations of embezzlement are "very troubling" and require the museum to investigate its accounting system, financial policies and board oversight. The Bellevue City Council last fall set aside $2 million to give to the museum, a huge amount for an institution still in rebuilding mode.

"Obviously we will want to be certain that these controls are in place before we approve their funding," Degginger said.

Museum officials say they're braced for concerns from donors but have also seen some benefits. They've received several pledges since sending the letter to supporters last week, including one in the seven-figure range.

Nonprofit groups often don't report thefts to police because they don't want to draw public attention or to cede control of the investigation, said Daniel Borochoff, president of the American Institute of Philanthropy, a Chicago-based watchdog group.

The museum should consider bringing in an independent, well-respected volunteer from the community to head the investigation, rather than an attorney and accountant paid for by the museum, Borochoff said.

Developer Kemper Freeman, a key museum donor who helped it reopen in 2005, said he expects museum officials will eventually file a criminal complaint.

(The Seattle Times is not naming the woman because she has not been charged with a crime and is not being publicly identified by the museum.)

Sometimes strong attendance and fundraising, such as the museum has experienced recently, can even help an exployee to steal, with colleagues less likely to scrutinize the numbers, Borochoff said. "It is easier to steal when things are going well."

Ashley Bach: 206-464-2567 or abach@seattletimes.com

Information in this article, originally published May 24, was corrected May 24. A previous version of this story incorrectly gave the impression that a quote in the last paragraph was from developer Kemper Freeman. The passage is from Daniel Borochoff, president of the American Institute of Philanthropy.