The St. Louis Regional Chamber’s former second-in-command is publicly alleging the current CEO created a hostile work environment before she left in 2013.
Thursday’s comments from former Chief Operating Officer Beverly Estes came after Steven Cousins, a partner with the law firm Armstrong Teasdale, said in a June 2 email to Chamber board members that the organization’s executive committee was reviewing allegations made in anonymous letters against CEO Joe Reagan .
The letters calling for Reagan’s ouster, obtained by the Post-Dispatch, raise questions about the top leadership at one of the region’s key economic development organizations.
“I would call it a hostile work environment,” Estes, who was COO from 1997 to 2013, said in an email Thursday. “Several employees who had worked at the Chamber for a number of years were not treated in what I felt was a humane way.”
Chamber spokesman Tim Beecher, a crisis communications specialist at FleishmanHillard, said the committee’s ongoing review “has not identified any improprieties” and concluded some allegations are false. Beecher said the Chamber “is following up on this matter in a timely and comprehensive manner.”
The Chamber did not provide a response to Estes’ comments. Neither Reagan nor board Chairman Warner Baxter, president and CEO of Ameren, were made available for comment.
In the first anonymous letter dated May 22, individuals describing themselves as a “team of professionals” demanded Reagan’s “separation from the organization” by May 29. They also raised questions about decisions by key Chamber board members — all current or former CEOs of several of the city’s biggest corporations.
Instead of taking action against Reagan, the writers say in a follow-up letter dated May 29, the executive committee had an “anonymous hotline” created for employees to contact the board. In addition, they say the May 22 letter led to the hiring of Gisele Marcus as executive vice president and the promotion of Lori Becklenberg to vice president of economic development.
The letter writers had demanded Marcus replace Reagan as Chamber CEO.
“These are steps in the right direction,” the letter states, but it goes on to say the executive committee “does not understand, or is unwilling to address the root cause of the problem.”
“The underlying problem is Joe Reagan,” the letter states. It then called for Reagan’s removal by June 5.
It’s unclear how many people authored the correspondence, whether it represents the views of many current or former Chamber employees or whether allegations were vetted for accuracy. In a copy obtained by the Post-Dispatch, Reagan’s surname is misspelled eight times. Carroll “Chip” Casteel, who resigned in 2013, is identified as a woman and his name is misspelled.
More than a page of the letter includes what appears to be excerpts from articles critical of Reagan’s tenure as head of Greater Louisville Inc., a position he resigned in 2011 to come to St. Louis.
The letter cites a two-day professional development conference, the date of which is not mentioned, where staff openly called the organization “dysfunctional, listing an absence of trust, fear of conflict, lack of commitment, avoidance of accountability (and) inattentiveness to results.” The consultant who purportedly led the conference did not return a request for comment.
The letter criticizes Reagan’s compensation, which was more than $771,000 total in 2015 according to the nonprofit’s federal tax filings. Reagan received a seven-year contract extension in early 2015.
“The length of the contract and his compensation was based on a professional, market-based analysis and complied with the Chamber’s by‑laws and policies,” Beecher said.
The Chamber also made a 10-year, $700,000 forgivable loan to Reagan when he was hired, half of which Reagan wouldn’t have to pay if he stayed at the Chamber over the full term. Beecher said the loan is secured by a mortgage on Reagan’s home and it is considered deferred compensation.
“This is part of a relocation agreement for a CEO moving here from another city,” Beecher said in an email. “His compensation, approved by the Compensation & Governance Committee and the board, is consistent with peers and Mr. Reagan’s predecessor, Mr. (Dick) Fleming.”
Fleming, who led the Chamber from 1994 to 2012, would not comment for this article. Fleming was compensated $745,000 in 2011, his final full year at the Chamber, according to tax filings.
The St. Louis Chamber’s expenses were $636,000 greater than revenue in 2015, the most recent year available for its tax filings. In 2014, expenses were $1 million more than revenue, and $465,000 more than revenues in 2013.
Beecher said the Chamber’s reserves stand at $7 million currently, contradicting the letter’s allegation they are currently at $3 million.
The letter alleges three-fourths of the Chamber’s employees have left since Reagan took over in 2012. Beecher said the Chamber has roughly the same number of employees, 40 currently, as it did when Reagan joined.
The Chamber had an employee turnover rate of 19 percent last year, Beecher said. It was roughly 16 percent in 2014 and 2015.
The letter also alleges the St. Louis County Economic Development Partnership has largely severed its ties with the Chamber because of Reagan. A spokeswoman for County Executive Steve Stenger directed questions to a spokeswoman for the Economic Development Partnership, who did not respond.
Estes said she resigned quietly in 2013 because, “I cared about the welfare of the organization and didn’t want to make any waves.” She said she was speaking up now because of the anonymous letters sent to the executive committee.
Business leaders in Louisville, Ky., where Reagan led the Chamber of Commerce before coming to St. Louis in 2012, have also taken an interest in the accusations.
“Based on what I know for a fact happened in Louisville, there are enormous similarities in what I hear happening there in St. Louis,” said Steve Higdon, Reagan’s predecessor as CEO of Greater Louisville Inc. from 1997 to 2005.
Higdon, who initially recruited Reagan to the Louisville chamber and left voluntarily for a private sector job before Reagan succeeded him in 2005, said Greater Louisville’s funds, memberships and political influence dropped enormously after Reagan took over.
“The (Louisville) Chamber of Commerce today is impotent relative to what it used to be, our influence in the state Capitol is a fraction of what it used to be, and it’s simply 100 percent due to the tenure of Joe as the CEO,” Higdon said.
Tax filings from 2011, Reagan’s last year at the Louisville chamber, show revenues of $8.4 million, which was $1.3 million less than revenues in 2009, with a spending deficit of $68,000. In 2012, the organization spent at a deficit of $890,000 but bounced back to a $450,000 revenue surplus in 2013.
“Every chamber’s executive committee has a fiduciary responsibility to hold their CEO accountable, ” Higdon said.