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Wikipedia founder Jimmy Wales, appearing at Wikimania 2005 in Frankfurt, Germany.  (Source: Andrew Lih/Wikipedia)
Controversy swirls around Wikipedia founder Jimmy Wales

Recent blog posts from Wikipedia ex-employee Danny Wool touched off a series of scandals earlier this week, centered around Wikipedia founder and chair emeritus Jimmy Wales.

Wool, writing in his blog, “All’s Wool that Ends Wool,” claims that Wales improperly used Wikimedia Foundation funds to cover lavish personal expenses, including visits to a massage parlor in Moscow and expensive wine for friends.

The claims appear to be part of the fallout from Wales’ high-profile breakup with Canadian TV commentator Rachel Marsden. Shortly afterwards, gossip blog Valleywag started receiving copies of lurid chat transcripts supposedly between Wales and Marsden, purportedly from Marsden’s friends.

One conversation disclosed to Valleywag shows Wales discussing edits to Marsden’s after they got together, touching off controversy over possible conflicts of interest.

Wales maintains his edits were completely above-board, and that after the two met, he “recused [himself] from any further official action with respect to her biography.”

Meanwhile, Wool posted a blog entry called, “Money for nothing, chicks for free?” on March 1, claiming that ValleyWag “missed a few of the facts.” Wool claimed that Wales’ affairs, both with Marsden and others past, as well as numerous spending binges, had “an impact on the Foundation’s cash reserves,” wholly derived from donations as the Wikimedia Foundation is a non-profit enterprise.

“You see, Jimbeau was certainly not frugal in his spending on his endless trips abroad, but when it came to handing in receipts, he could be somewhat careless,” wrote Wool, “at one point he owed the Foundation some $30,000 in receipts.” According to Wool, Wales frequently tried to expense lavish personal expenditures: “I wonder if the students who gave up their lunch money to donate to Wikipedia would have approved of that expense.”

Wool insinuated … that Wales was careless with expenses and receipts, often asking the San Francisco foundation to pay for personal expenses,” reads a report in the San Francisco Chronicle. “He said the expenditures piled up as Wales' celebrity grew, prompting the foundation to take away his credit card.”

Both Wikimedia Foundation and Wales denied any wrongdoing. Florence Devouard, chair of the Wikimedia Foundation, told the Associated Press that Wales was simply “slow in submitting receipts,” and noted that the foundation was not afraid of rejecting frivolous expenses.

In an interview with CNET TV, Wikimedia Foundation executive director Sue Gardner said that Wales had expensed a total of $1,100 in travel-related costs over the last nine months. Wales had “done nothing but be modest, frugal, and do what’s best for the organization.”

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By Xodus Maximus on 3/7/2008 12:59:28 AM , Rating: 2
And here I thought the world would be a better place if all corporations were non-profit, don't get me wrong I like profit I just imagine all revenue going to pay salaries and infrastructure and at the end there would be no profit.

But it seems that this type of structure also suffers from human greediness, and if you read the blog further there is stuff about a staff member Erik who wants to take over Wikimedia. Also other posts that make it seem like some dictatorate fraternity which survives on misplaced goodwill donations.

Everybody wants to be a rock-star...Why cant the OD part come sooner for most, it would save a lot of aggravation.

RE: Wow
By Xodus Maximus on 3/7/2008 1:14:52 AM , Rating: 1
somehow, I got caught up in the thoughtful part of my post and forgot to type the first part of what I wanted to say...

<sarcasm>my bible of reality shattered, how can I ever trust Wikipedia again!!</sarcasm>

well im sure that it doesn't have the same impact if I had just done it right the first time, but I felt that I had to share, im sure a -1 is in the future of this post ;)

RE: Wow
By therealnickdanger on 3/7/08, Rating: 0
RE: Wow
By TomZ on 3/7/2008 9:02:36 AM , Rating: 2
I don't buy it. I know a lot of people who work hard out of a desire for earning money and who are not "corrupted" by it, myself included. Their focus is providing for their family and their future, and I fail to see how this leads to moral bankruptcy.

In fact, I would argue that I see greater morals in these types of people than in many others who do not have the same drive or the same financial resources. So maybe in the end, being amoral is just a choice that a person makes, regardless of their bank account balance.

Besides, quoting the bible is pretty lame. Why not think and speak for yourself instead?

RE: Wow
By PCMECH2010 on 3/7/08, Rating: 0
RE: Wow
By TomZ on 3/7/2008 9:37:29 AM , Rating: 1
Yes, quoting the bible is lame when it is a substitute for independent thinking. God gave us big brains for a reason - let's all use them instead of blindly and stupidly following what was told to us on Sunday.
90% of the people in this country have been corrupted by greed. That's a FACT.

Please prove that "fact." Do you have links to some research studies that prove that? Oh, that's right, that's just your opinion. You do know the difference between fact and opinion, right?

RE: Wow
By therealnickdanger on 3/7/2008 9:59:28 AM , Rating: 4
Whoa now, let's just pull this back before it all goes sour. I'm sure that he doesn't have facts to support the 90% figure.

Cranky this morning, Tom? :P Quoting the Bible is far from lame. I could have just said it in my own words, "Obsessing over money causes nothing but problems", but ultimately it would just be a shorthand derivative of the original exposition. There is very little that you or I can claim to be original thought - every thought is based off of a pre-existing thought of one kind or another.

This is all semantics, but if you believe there is a God that "gave us brains for a reason", wouldn't that reason be to creatively exercise the words He Himself passed down? Otherwise would be an interesting theological stance: God doesn't want us to obey Him... haha

RE: Wow
By Runiteshark on 3/7/08, Rating: 0
RE: Wow
By PAPutzback on 3/7/08, Rating: 0
RE: Wow
By charliee on 3/7/08, Rating: 0
RE: Wow
By lompocus on 3/8/2008 2:52:46 AM , Rating: 2
Ima go ninja on your ass if I hear another "The Church steals your money" comment! Not once have I been, in any way, shape, or form, been pressured to the point of forced to tithe.

It's a donation. To the church. So it can still run. Each church gets funding from itself. It takes as much to run a church as a small school. It's not your average house. It serves the whole section of the city its in. That's a lot of stuff. A few even help with local schools, i.e. the church which I go to gives 100k annually to a local Catholic school (It's been struggling but recently said school is rising again in enrollment). The father eats at Taco Roco! I don't think he's rolling int eh cash.

If you think passing around a basket to donate in whatever you want or giving yoru slip containing whatever amount you want (you needn't donate at all!) is forced donation, then get off your ass you lazy bastard and start living in the real world.

It is not lame to quote the Bible. A quote is a method of speech in which you are reitorating an already mentioned idea. As another said, if he quoted Baxter or Twain or Wells (2 are sci-fi), would he be 'lame'?

RE: Wow
By Penth on 3/8/2008 3:12:11 AM , Rating: 2
I love when people say That's a FACT after statements that so obviously are not fact.

RE: Wow
By clovell on 3/7/2008 10:18:43 AM , Rating: 2
No, Tom, those people you know work hard not out of a desire for earning money, but out of a desire for providing for their family and their future well-being. It's a subtle distinction, but it's important - 1 Timothy doesn't speak out against the type of people you described.

Personally, I think that a high bank account balance can make a person more susceptible to greed and materialism - when motive and opportunity coincide - but it very much depends on the person.

[/diffused $@!#-storm]

RE: Wow
By jackedupandgoodtogo on 3/7/2008 12:52:28 PM , Rating: 2
If you're going to claim quoting the Bible is lame because you're no longer thinking and speaking for yourself, why not just state that quoting ANYONE OR ANYTHING is lame? If it's so lame to quote, why limit it to quoting the Bible unless it's your personal bias against the Bible?

Besides, anyone can be greedy, rich or poor! But don't confuse greed, which is the selfish desire for things excessively and without thought for others, and the desire to be successful, which CAN be good for others.

RE: Wow
By TomZ on 3/7/08, Rating: 0
RE: Wow
By Raidin on 3/11/2008 12:47:07 PM , Rating: 2
You are assuming he is quoting the Bible instead of thinking for himself. Are you saying the two are mutually exclusive?

RE: Wow
By mdogs444 on 3/7/2008 8:17:32 AM , Rating: 3
And here I thought the world would be a better place if all corporations were non-profit, don't get me wrong I like profit I just imagine all revenue going to pay salaries and infrastructure and at the end there would be no profit.

According to my old BUSN 115 book, the word "Business" is defined as: all PROFIT seeking activities and enterprises that provide goods and services to an economic system

So my question to you is this - what is the difference in your mind between "human greed" and "human motivation". Are they not both linked to be able to do something better than what you are doing now, and for a reason?

What would be the incentive of someone starting up their own company, putting in huge monetary risk, and working around the clock (much more than 8hrs/day involved in a startup business, and being head of a company)? You're telling me they should do all that for no profit? Do all that just so they can have the same thing as the people who work for them?

You do realize that even Non-Profit places, like a Childrens hospital where i work, still need revenue, still have expenses and payroll, still need massive amounts of money in the bank to expand and pay for future ventures & projects?

Money is not the root of all evil, but it provides people with the motivation to go above and beyond what is considered "normal". Its what drives the economy and the world.

Else, we all may as well just be happy with a high school diploma - which is so poor anymore that it doesn't even mean you're literate.

RE: Wow
By TomZ on 3/7/2008 9:53:51 AM , Rating: 3
Good post. Nice to know that someone around here understands the value of business. Seems like nearly everyone else thinks everything should be some kind of Atlas Shrugged-type of giveaway.

People need to realize that the Wikipedia folks are running a business just like any other. They just happened to have chosen to be a non-profit, which is just a tax designation, and they chose a direct-contribution business model as opposed to an ad-driven one.

Therefore, it doesn't bother me in the least that the creator of Wikipedia gets enriched due to his efforts and initiatives. What he has created is very valuable to society, and he would be a fool to not benefit from it financially. After all, how is what he has done fundamentally different from, e.g., Google?

RE: Wow
By mdogs444 on 3/7/2008 10:20:15 AM , Rating: 2
Thanks Tom!
They just happened to have chosen to be a non-profit, which is just a tax designation

Thats exactly correct. They still function for profits & revenue just like any other corporation. The "Non-Profit" sector is just a tax designation, and I believe (although not 100% sure) that they are publicly financed as opposed to stock driven.

RE: Wow
By clovell on 3/7/2008 10:24:30 AM , Rating: 2
Are you serious? Did you miss the article? This 'business' operates chiefly on donations and the founder has $30k (that we know of) in unaccounted reciepts for personal expenses that he put on the company's tab. That's not 'enriching himself', it's unethical.

At Google, he'd be canned.

RE: Wow
By mdogs444 on 3/7/2008 10:27:10 AM , Rating: 2
At Google, he'd be canned.

Google is a stock driven company and he'd have to answer to shareholders. Big difference.

Since its his own non-profit company, the people he'll have to answer to for the sake of future revenue are the ones who make the donations.

Unethical does not necessarily mean illegal.

RE: Wow
By clovell on 3/7/2008 10:31:50 AM , Rating: 2
True, but how are we gonna play this, guys - is Google going to be a fair comparison or not? It cuts both ways.

RE: Wow
By rudy on 3/7/2008 9:09:10 PM , Rating: 2
Exactly I know far to many "non" profits where employees are paid too much, and the real problem with non profits is it seems they are accountable to no one. Lots of US politicians run non profits to get a tax break and spend ludicrous amounts of money on luxuries. IE just call it a Organization dinner and go to the finest restaurant in town.

RE: Wow
By TomZ on 3/7/2008 10:56:16 AM , Rating: 2
Are you serious? Did you miss the article? This 'business' operates chiefly on donations and the founder has $30k (that we know of) in unaccounted reciepts for personal expenses that he put on the company's tab. That's not 'enriching himself', it's unethical.

No, it's not unethical.

As the owner of the business, he has the right to determine whatever compensation he deems reasonable, subject to the restrictions of his company's tax-free status, whether that be $10K, $500K, or $10M.

Trying to expense personal expenses is an attempt at tax minimization. Every smart business owner tries to minimize his/her tax burden by expensing as much as possible through the company. This is normal operating procedure. His accountants and/or the IRS can properly advise him about whether certain items can be expensed or not, but at the end of the day, it's all about how much taxes need to be paid.

And clearly, any "lavish expenses" that he incurs will be paid by his employer - Wikipedia - and the sum total of those costs will be his "total compensation." And then it will be up to Wikipedia contributors to determine whether this total compensation is too high to where they don't want to donate again in the future.

RE: Wow
By clovell on 3/7/2008 11:35:04 AM , Rating: 2
If he gets to do what he wants as far as compensation is concerned, why is he asking the San Francisco Foundation for money? I had understood he was the founder, not the sole owner of Wikipedia.

RE: Wow
By masher2 on 3/7/2008 1:02:54 PM , Rating: 2
> "As the owner of the business, he has the right to determine whatever compensation he deems reasonable"

Look into the regulations for "excess benefits" expense transactions for an NPO. The IRS has very strict rules, and excessive personal compensation can result in the loss of NPO status entirely.

RE: Wow
By clovell on 3/7/2008 10:35:09 AM , Rating: 2
Greed caused the scandal that swallowed Enron. Motivation is what helped me finish my graduate degree so I could feed my family. Motivation also propelled Dave Thomas to be a mulit-millionaire with a nationwide burger-business.

There's a distinct difference, and it doesn't imply that we shouldn't work hard to make more money. That's why nobody is saying that money is the root of all evil - that's crazy talk - but rather that, the love of money is the root of all (kinds) of evil.

RE: Wow
By dever on 3/7/2008 2:34:12 PM , Rating: 2
I'm still not sure how you're defining greed. Are you saying that Motivation is working for money without breaking the law (or some moral code), and Greed is breaking laws or other ethical boundaries to obtain money? I'm not necessary opposed to that definition, I just don't think it's widely shared.

It seems many define working hard to obtain money as "Greed" if the work is successful. If it is not successful, it's just "Motivation." Irritating definition at best, but it seems to be widespread.

RE: Wow
By Xodus Maximus on 3/7/2008 11:09:07 AM , Rating: 2
I guess you misunderstood me or I didn't explain what I meant properly. Here is an example of what Im trying to say:

Currently Corporations do something like this,
Gross Revenue: 1,000,000
Infrastructure/Production Cost: -500,000
Employee Salaries: -300,000 (rate is fixed)
Net Profit: 200,000 (which is usually paid in dividends to investors or bonuses to executives)

In my imagination this would be nice,
Gross Revenue: 1,000,000
Infrastructure/Production Cost: -500,000
Employee Salaries: -500,000*
Net Profit: 0

*In the employee salaries you can pay them a fixed base, plus percentage, and you can pay the investors back as you would an employee salary. As I say it I realize you would probably have a hard time finding employees or investors under that terms, maybe already rich hippies?...but that is why I say "In my imagination "

RE: Wow
By TomZ on 3/7/2008 11:13:13 AM , Rating: 2
The only difference there is an accounting difference with likely tax implications. The owners and executives are still compensated about the same. I don't see how that change can affect things like greed or cause amoral behavior.

RE: Wow
By Xodus Maximus on 3/7/2008 11:29:33 AM , Rating: 2
I never said that it could change greed or affect moral behaviors. I don't think anything can change that.

But like I said salaries as a fixed base plus evenly distributed percentages from remaining revenue would mean more money for employees and owners/executives, and thats fine, all im trying to reduce is the broad chunk given to those from the stock market who get rich from a company's profits and they did nothing, and didn't even necessarily pony up the money at the beginning.

Its an imaginary model, like i stated in both posts, I never claimed perfection upon it, it was just my way of saying wouldn't it be nice...

RE: Wow
By mdogs444 on 3/7/2008 11:37:01 AM , Rating: 2
who get rich from a company's profits and they did nothing, and didn't even necessarily pony up the money at the beginning.

You do realize that the stockholders have a great implication on what the value of the company is. Especially when a company does a new stock sell off - they are basically getting people to financially back their company and invest. This is the high risk, high reward part of capitalism. Companies are changing every day, for better or worse, so the inital start up cost of a company is a moot point starting on day 2.

it was just my way of saying wouldn't it be nice...

A nice way to curb people from being wealthier than others, and everyone being on the same level playing field - like in a socialist society - sure. But the majority of people would who want that are ones who do not like to go above and beyond & have no motivation to better themselves. Anyone who wants to make more money, be an entrepreneur, or make their own destiny will point you to the USSR & Cuba to see how well your imagination would work in real world.

RE: Wow
By masher2 on 3/7/2008 9:57:09 AM , Rating: 3
> "And here I thought the world would be a better place if all corporations were non-profit"

Such thinking is what spawned the booming, vibrant economies of Cuba, North Korea, and the former republics of the USSR.

RE: Wow
By therealnickdanger on 3/7/2008 10:01:45 AM , Rating: 2
It's so funny because it's so true.

By PAPutzback on 3/7/2008 9:34:32 AM , Rating: 2
I swear some days it is like a bunch of bickering women in here standing in the break room talking about Brandgelina.

By lukasbradley on 3/7/2008 9:51:38 AM , Rating: 2
I might agree with you if this was a for-profit company, and/or those expenses came out of his personal salary. However, that appears to not be the case. All companies, regardless of their setup, have rules surrounding what constitutes a valid, deductible business expense. Even a simple lunch isn't a 100% write off all the time.

By AlphaVirus on 3/7/2008 10:07:28 AM , Rating: 2
If you donated to a Brest Cancer Foundation that claims they are using 90% of the funds for research and 10% for admin costs, I dont think you would be happy to find out they are actually using 20% on research and 70% on 'fun time'.

What business is it of ours

Well maybe if you stopped and though that this is our (meaning the people who donated) money, and when you invest then you are investing for a specific purpose claimed by the founder. If you find that the founder has been taking your money and partying then you will upest.

By PAPutzback on 3/7/2008 10:18:21 AM , Rating: 1
No ones is getting hurt unless the wiki foundation folds. I really don't think you can compare words on a web page to cancer.

Perhaps I should of went into detail more about what the non prof organization does. Hospitals, churches and other research type orgs should disclose their spending. But if i throw money into a wiki site or my local gaming clan and the guys that spend the time to manage the site go spend some of it as their payment for time spent on the site and maintaining the leagues and servers then good for them. I am just glad to have a place to still see all my old friends and throw down some beer without getting in trouble with the wife.

By masher2 on 3/7/2008 10:35:49 AM , Rating: 2
> "No ones is getting hurt unless the wiki foundation folds."

Non-profit organizations operate under very strict rules. You donate to an NPO for one purpose only -- to advance the stated goals of that organization.

Reasonable business expenses are one thing. Using the donations of public-spirited citizens to fund massage parlor visits is deceptive and quite possibly illegal.

By TomZ on 3/7/2008 11:18:45 AM , Rating: 2
I disagree. In the end if the guy wants to pay for a "massage," Wikipedia is going to pay for it (assuming it is his only source of income). The only question in my mind is whether he pays for that as an expense of the NPO (unlikely) or whether he pays for it out of his (taxed) personal compensation.

In other words, if he used a Wikipedia credit card to pay for a "massage," when the accountants do their work, they will surely recognize that it is an invalid expense for the NPO, and they will add that amount to his total taxable compensation.

Most small business owners do not keep very clean separation between their personal and business expenses, but good CPAs can readily separate these things out when it comes time to file tax returns.

By masher2 on 3/7/2008 12:21:22 PM , Rating: 2
The point you're missing is that a proprietor of a small business can set his own compensation at whatever value he wishes. If he increases it, the company loses money and the business owner (who is also is the owner) makes less. Zero sum game.

An NPO isn't allowed to operate like that. As an employee of the organization, you're not allowed to just "go get a message" and pay for it on the company dime. Your compensation must be set by board authorization, and publicly disclosed.

By TomZ on 3/7/2008 1:40:08 PM , Rating: 2
I see your point, but what's not clear to me is the control that Wales has over the foundation. Clearly there must be some degree of control, since he presumably created it, and since he appears to have some expectation of having his expenses covered by the foundation.

By isorfir on 3/7/2008 8:24:13 AM , Rating: 5
I'm going to go check this out on Wikipedia to make sure this is correct.

RE: Interesting
By PCMECH2010 on 3/7/2008 9:22:58 AM , Rating: 3

By blackseed on 3/7/2008 12:27:27 PM , Rating: 2
What stops the founder or CEO from changing the wikipedia entries after receiving bribes from corporations? Is there check and balances in Wiki besides put a "Controversy" or "Devated" tag on the top?

Not all wiki entries should be trusted imo.

RE: So
By pauluskc on 3/7/2008 2:42:11 PM , Rating: 2

What stops me from changing them back for free? That's probably why "bribes" don't work with Wiki.

By phxfreddy on 3/9/2008 3:53:51 PM , Rating: 2
Non profit has always been holier than thou approach to business. The only problem is if you are normal business you are beholden to pay gi-normous taxes to the Feds. The solution is we all become non-profits and jam the tax system. Sorry I have no compassion for the "I've fallen and can't get up crowd". If you are blind, retarded(democrat? wait...that's too many), or truly sick you get help. All others can starve until sufficiently motivated to work.

He said she said...
By iFX on 3/9/2008 3:55:38 PM , Rating: 2
Nonsense. Why is this news?

Love Wikipedia, Hate Wales
By Ratwar on 3/7/2008 12:38:25 PM , Rating: 1
Look, I've never liked Wales much, and really, I think a lot of the Higher ups in at least Wikia, if not Wikipedia are just plain assholes. They're self centered people. I've seen them publicly offer to take over private Wikis after the Wiki's current owner has refused them in private, obviously attempting to cause internal site problems.

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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