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[whitespace] Dianne Morgan Empty-Handed: After the unprofitable Living Expo went bust, Dianne Morgan said the unpaid bills were not her problem.

Photograph by Christopher Gardner

Living Exposé

Dianne Morgan's brainchild, a convention for baby boomers in downtown San Jose, left a trail of broken hearts and wallets. Now she has a new gig: a discount directory for seniors with a membership card and a social mission.

By Michael Learmonth

THE ELEVATOR PITCH is Dianne Morgan's specialty. Ideas come to her and she wraps them in important-sounding phrases like "circular trade" and "strategic partnerships." Today she's pitching me on her latest idea, a discount guide for people aged 50 and over called the "Fifty Plus Discount Directory."

Published in a small storefront office on El Camino Real in Mountain View, the directory represents a utopian vision of commercial businesses helping nonprofits, nonprofits referring clients back to businesses and everyone making money off money-laden boomers, aged 50 and above.

"The baby-boomer market is the biggest market there is," Morgan says. "They are the only group that cross-buys into every other market; they buy for children, they buy for seniors, they buy for themselves."

As soon as finances permit, she's planning to open a franchise office in San Mateo County. And she has convinced a small group of investors to buy shares in the company.

She has even convinced senior activist Berkley Driessel, president of the Santa Clara County Association for Good Government, who signed on as chairman of the advisory board. Driessel is present during our interview and periodically seconds Morgan's speech with a conspiratorial laugh.

"She's got a lot of dimensions to her," he told me earlier. "I've never seen anyone with so much energy."

But some of Morgan's former associates are not so impressed by her exploits in the areas of business and philanthropy. Many of them bought into Morgan's last big pitch in 1998 when she told them about a combination street fair and fundraiser for seniors to be held in San Jose in April for a nonprofit called the Living Expo Foundation. According to its corporate charter, the foundation was organized "to create a clearinghouse consortium of nonprofit organizations, agencies or anybody coming together to support the fifty-plus market."

But the foundation never achieved nonprofit status and the event left a long list of creditors trying to recoup tens of thousands of dollars in losses incurred at the event. Some have pursued their claims in small claims court or with the Department of Labor Relations. Others simply wrote off their losses, vowing never again to do business with Morgan.

"She ripped me off of a lot of money," says Fil Maresca, a San Jose event promoter who agreed to be on the Living Expo planning committee. "She makes quite an impressive game. People came to me and warned me. I wasn't careful enough."

Living Senior

THE IDEA FOR LIVING EXPO came to Morgan soon after she relocated to the South Bay in 1994 after living, she says, "on the East Coast and in Europe." Morgan turned 50 herself in January 1998 and saw her future in marketing to the demographic she had just entered.

Soon she had enlisted an impressive 22-member planning committee, including Maresca, San Jose Office on Aging director Dave Peyton, Rita Helms of AARP and two staffers from Morgan's company, then incorporated as morganHall Publishing Inc. The group met twice a month over lavish meals at Sports City Cafe in downtown San Jose.

"She ordered meals and put everything on a credit card--meal after meal," remembers Glenn Bogle, a 30-year-old designer who ultimately agreed to produce two original dresses that embodied a "space theme" for the silent auction.

As the event approached she befriended another San Jose artist, painter Mattison Fitzgerald. The two quickly hit it off, and soon they had agreed to begin a partnership in which Morgan represented her artwork and Fitzgerald created five original pieces in a series called "States of Matter" to be displayed and sold at Living Expo.

Morgan filled Fitzgerald's head with visions of grandeur. "There is a very important woman in town," Fitzgerald emailed a friend. "She is marketing my work starting at $25,000 to $50,000 or something of the sort ... [B]uilding the market to make me the highest paid woman American artist is the goal. She is very NYC and LA-film connected ... and serious."

Morgan paid Fitzgerald $1,000 for materials and, in early April 1998, encouraged Fitzgerald to compile a list of her artist friends and supporters who should be invited to the VIP reception.

Morgan told Fitzgerald that since First Lady Hillary Rodham Clinton would be a speaker, guests would have to be cleared by the Secret Service.

What Morgan neglected to tell her was that Clinton had already declined her invitation in a letter from the White House received by Morgan's office on Feb. 27, 1998.

"Although Mrs. Clinton's official schedule will not permit her to accept the invitation, she appreciates your thoughtfulness and sends her best wishes," the letter read.

Morgan's assistant, Daniel Robba, knew about the First Lady's regrets, but was instructed not to tell anyone about it. Fitzgerald copied most of her correspondence to Morgan, but Morgan continued to let Fitzgerald operate under that illusion.

"They need your RSVP now," Fitzgerald emailed friends in mid-April. "Secret Service won't let you in without a proper response."

Finally on Friday, the day before the event, Morgan informed Fitzgerald that two of her paintings would instead be offered at the "silent auction" the next night. Fitzgerald says she agreed to the arrangement because she thought it was a good cause and assumed--wrongly--that she would share in proceeds from the sale with the Living Expo Foundation. She says she never received a dime from the sales, though she managed to recover one of the paintings from Morgan's home.

When asked where the other painting is, Morgan turns to her longtime business partner, John Vandall.

"It was there for auction, but I'm not sure what happened to it," he says.

Checkered Committee

ON THE DAY of the event, Saturday, April 28, 1998, thousands of senior citizens streamed into downtown San Jose on buses provided by the Valley Transit Authority. The city of San Jose reported that 7,000 to 10,000 people attended the event, although Morgan claims actual attendance was much lower.

"Ironically, it was a good event that was very poorly attended," says Greg Tomkins, an analyst at the San Jose Office on Aging. "Part of it is she was expecting more advertising than she got. Based on the turnout at the event I didn't know what kind of future she would have with seniors."

But turnout wasn't the only event-day snafu. When a crew from the tent contractor showed up in the morning, the driver of the truck demanded payment for the tents before they would be set up. Morgan got the driver to accept a $3,000 check as a down payment on the $6,745.15 bill. When Bill Monaco, co-owner with his wife, Carol, of Special Events in Fremont, tried to deposit the check on Monday, Morgan had put a stop-payment order on the check.

For months, Monaco says, he tried to get payment for his services, but Dianne Morgan simply disappeared.

"It's not the first time we got burned and it won't be the last," Monaco says. "For an amount this small, our collection agency wouldn't be interested. You really never know if she pocketed all this money from sponsors and figured it's not enough for these people to get excited about."

As for Monaco, Morgan says she's never heard of him, even though a letter from her office was sent to his company, Special Events, explaining that Living Expo did not have money to pay its bill. "Site preparation," as she calls it, was the responsibility of Fil Maresca, a member of the planning committee for Living Expo.

"Several people on the committee signed a lot of contracts without the approval of the committee," Morgan maintains.

Bad Credit

AFTER THE EVENT, there was plenty of blame to spread around. When creditors came knocking, Morgan blamed sponsors who had not yet forked over the checks they promised.

"Unfortunately," she wrote in the letter to Special Events, "these corporations recently informed us that it may take up to 60 plus days to finalize checks through the proper channels."

"It's a stall tactic," Monaco says. "I can't believe anyone would be that inept."

When Living Expo creditors came after Fil Maresca, Morgan's response was similar.

"It is so unfortunate that some of our largest sponsors are taking so long to process their contributions," she wrote. And in another letter: "It is important that everyone know that I am no longer personally advancing monies for these payments. ... As of Monday, I am now in the field almost every day on morganHall business and out of the Living Expo loop."

The San Jose police officers who freelanced their services to Living Expo came after Maresca and Morgan in small claims court. Since Maresca's name was on the use permit for Cesar Chavez Park, a $5,000 judgment was levied against him. The cops named Morgan in their suit but were unable to serve her.

"She stuck me for $20,000," says Maresca, still very bitter and trying to smooth over relations with purveyors. "I'm the one who got burned the worst and I'm not taking any legal action. It takes time and money. I spent last winter picking up odd jobs to make the $5,000 I had to pay the cops."

The silent auction also had its share of problems. Glenn Bogle, who designed two dresses for the event and provided two models to wear them, received no compensation for his work or for the models' time. He had agreed to accept half his normal fee for the dresses, about $1,000.

Before she got "out of the loop," Morgan told him the dresses fetched $2,000 apiece.

"After the weekend was over I hunted her down," Bogle says. "She wouldn't talk to me."

Morgan's assistant, Daniel Robba, kept giving Bogle assurances that the check was coming as soon as the sponsorship money came in.

"He started telling me NASA was cutting me a check," Bogle says. "Daniel's stories just got crazier and crazier. And I'm not stupid."

When asked about Bogle's situation, Morgan says that because her employee, Daniel Robba, contracted for Bogle's services, Robba should be responsible.

"You know something, it's a very tiny amount," she says. "They should be going to the people that contracted them, not saying that I didn't pay, because Dianne Morgan is not the bank!"

Diane Wales, a Campbell mortgage broker, got caught up in the silent auction and says she bid on a trip to the SETI facility in Puerto Rico immortalized in the movie Contact. She also bid on a case of "vintage red wine." But the day after the action she got a call from her credit card company asking approval to put through $4,400 in charges--not the amount she had bid for the items. Alarmed, she refused the charges, but Morgan charged her credit card anyway--in $500 increments, to pass the charges through.

Wales managed to stop the charges, but was nonetheless sent a vase and a case of 1998 Sauvignon Blanc from Mirassou Winery. She tried to return the items, but Morgan refused to accept them.

Not Profiting

In her Mountain View office, Dianne Morgan is getting angry that anyone would bring all this up. "You're doing a story about this?" she says. "I'll save you the trouble and stop the interview right now unless you want to talk about nonprofits."

Morgan says she closed morganHall Publishing with an $80,000 loss in 1997 and she put between $80,000 and $100,000 of her own money and money borrowed from her friend John Vandall into Living Expo.

"John didn't get paid. I didn't get paid. All we did is donate money. I think, boy, when they learned we were paying bills, they all came out of the woodwork. It was like, Get in line!"

More than a year later, the creditors have stopped calling for the most part, and Morgan's got a new business.

Inside her Mountain View storefront, Morgan has a small staff of salespeople selling ads in the Fifty Plus Discount Directory to area businesses. A full-page ad costs $3,000. Yahoo bought one; so did the Wyndham Hotel in San Jose, Marlowes Flowers and Gifts in Milpitas, and James Newman, M.D., a plastic surgeon in Menlo Park.

Businesses that buy an ad sponsor a free ad for the nonprofit of their choice--such as ARIS, a South Bay AIDS organization, Pets in Need, of Redwood City, and the Juvenile Diabetes Association. Those nonprofits, and others like them, then distribute the guide to their members and clients.

"They leave our resource directory on the table," Morgan explains. "They tell people to go to our sponsored businesses, they build more business, the nonprofit gets more, and the bottom line is we all help ourselves as we get older by giving ourselves more resources. And the beauty of it is that we will make money out of it and we'll be able to do more and get bigger and bigger."

This, she tells me, is circular trade at work. "I did a lot of reading. Harvard was the first one to actually coin it," she says.

Morgan claims 300,000 directories are in circulation. Most of those were given away through the nonprofits that benefit from the free advertising. The remaining directories are being sold for $14.95 a pop. Morgan says the company is "not profitable yet," and she and other Fifty Plus Media executives are working on deferred salary. She won't disclose exact numbers, but says the company has spent about a million dollars over the last three years.

"I hope you look at the positive and how we're supporting the nonprofits and helping the over-50 community," she says.

But all this talk about "supporting nonprofits" seems to create some confusion in people's minds about the difference between a "nonprofit corporation" and a corporation that's not yet profitable. Even though Morgan describes Fifty Plus Media as "a business that has a social mission as well as a business mission," it is still registered with the Secretary of State as a domestic stock corporation, not a nonprofit.

This fact was unknown to Tom Fulcher, president of Economic and Social Opportunities, who agreed to allow his photograph to be used on the cover of the 1999 Discount Directory. Fulcher was surprised to learn that directories were being sold and that the company he lent his image to was not a nonprofit.

"It sounded like a nonprofit," he says. "I wouldn't have given permission if I knew they were selling it."

But even Morgan's own staff seems to be a little confused as to the tax status of their employer. When asked if buying an ad in the directory would constitute a tax-deductible charitable contribution, customer service manager Brian Roy explained, "I think there is a way we can make it a charitable donation. I don't know if the business gets credit for it or if we do."

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From the September 2-8, 1999 issue of Metro, Silicon Valley's Weekly Newspaper.

Copyright © 1999 Metro Publishing Inc. Metroactive is affiliated with the Boulevards Network.

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