WASHINGTON—Internal documents obtained by The Daily Wire reveal the extent of the deficit spending that occurred at The Kennedy Center under the Biden administration — a scheme that left the performing arts center deep in debt and could open leaders up to potential legal action.
Kennedy Center President Richard Grenell this week told the organization’s board of directors that, under the direction of recently departed president Debra Rutter, the group “found $26 million in phantom revenue, fake revenue.”
“It’s criminal,” Grenell said, adding that “We’re going to refer this to the U.S. attorney’s office.”
Rutter denied the allegations, telling the Washington Post that she and her leadership team prepared a budget each year that was approved by the board of directors. But in a letter to Grenell obtained by The Daily Wire, Kennedy Center Chief Financial Officer Donna Arduin says that Rutter’s budget claim is irrelevant.
“Budgets and audits are on vastly different timetables and audits do not review the budgeting process,” Arduin wrote. “Audits are released up to a half year after the conclusion of the fiscal year, whereas budgets are approved well in advance of the fiscal year.”
Arduin, known as one of the nation’s leading budget experts, came to the Kennedy Center after stints in top roles across the country. She’s been brought in to right the budgets of California under Arnold Schwarzenegger, New York under George Pataki, and Florida under Jeb Bush.
In her months at the Kennedy Center, she determined that Kennedy Center leadership “veiled the fiscal year 2025 budget with $26 million in fictitious revenue and did not properly disclose such to the Board,” according to a letter to Grenell. In short, Arduin writes in the letter, “the Board believed that they were in good faith passing a balanced budget.”
Additionally, Arduin notes in her letter to Grenell that “under Rutter’s watch, the Center’s leadership team changed the name of the debt reserve fund that held $54 million of donor contributions for the retirement of our bank loan to the ‘sustainability fund,’ apparently to appear that new funds had been raised for budget sustainability, and spent it to mask deficits.”
This is the latest revelation of trouble at the Kennedy Center, which has become a flashpoint in the second Trump administration. Trump has pledged to make serious improvements to the performing arts center, repairing its outdated facilities and purging its repertoire of drag shows and other “woke” programming.
Program offerings under former Kennedy Center leadership may have contributed to its dire financial straits. Sources with knowledge of the Center’s financial situation tell The Daily Wire that its programming has a net margin of negative $72 million. Under Grenell, The Kennedy Center is focusing on shows that will sell tickets and appeal to a wider audience.
The Kennedy Center operates on a $230 million annual budget. A portion of its revenue, allocated by Congress, is earmarked for capital costs and facilities maintenance. The remainder of the Center’s money comes from donors.
Sources with knowledge of the Center’s financial situation tell The Daily Wire that, under Rutter’s leadership, the organization raised $250 million and took out a $72 million loan to construct The REACH, a multipurpose space that includes rehearsal rooms, studios, and more. President Donald Trump has criticized the project, which sources described as the “passion project” of Rutter and former Kennedy Center Chairman David Rubenstein, whose portrait adorns the front door of the REACH.
That the Kennedy Center raised and borrowed more than $300 million and did not use it to pay down its debt suggests that previous leadership teams were misguided in their financial priorities.
“The former leadership built a broken budget with an operating deficit of 100 million dollars and a bottom-line deficit of $26 million,” Arduin told The Daily Wire. “We have now truly balanced the budget.”
In March, The Daily Wire reported that Arduin informed staff the Kennedy Center had “no cash to pay our bills.” At the time, Grenell announced that he planned to make staff reductions and slash executive salaries.
Comments are closed.