The Institutional Pathology That Took Down James O’Keefe

From the outside, it seems crazy. James O’Keefe as head of Project Veritas took the organization to new heights of fame and the achievement of its core mission. His cage match with a Pfizer director—which took incredible guts—made for some of the most remarkable real-life footage in years.

And it spoke to exactly what people were wondering: Just how rotten is this company that sold billions of vaccines that didn’t work?

One might suppose that this would be O'Keefe’s moment, one that would guarantee him a lifetime position and true notoriety. And what a remarkable fundraising opportunity! After that film came out, I had friends texting me to join them in contributing because this organization was doing as much as anyone to right the wrongs of our age.

One might suppose that this would be the perfect time to build on success.

Alas, O'Keefe has been pushed to resign as head of the organization. How is this possible? It seems utterly crazy.

Without knowing any of the details in the complaint against him, this episode has all the earmarks of a terrible institutional problem in nonprofits that we’ve seen many times before. All it takes is a remarkable public relations success and a big infusion of funds, plus a weak, jealous, and confused board using disgruntled employees as shields for their misdeeds.

The board develops a backward-looking focus, taking apart whatever the success was. Why did management take such huge risks with money and reputation? Why didn’t the head of the organization consult with the board before going ahead? Why didn’t the head follow industry-established best practices? How come the organization’s president didn’t do something different that would supposedly better establish long-term success? Above all, why is this guy getting all the attention and the rest of us none?

Other jealous insiders within the company start consulting with the board and the plot is hatched. All it takes is a fake investigation, some claim that the guy at the top is making everyone work too hard and that this creates a burned-out staff or really any other kind of malarkey you can dream up. You can fill in the blanks with fake complaints and there are always and everywhere there.

The scheme usually involves fake claims of financial improprieties, such as drawing attention to office-party expenses or chartered flights—anything to make management look like bums and robbers who need to be monitored and controlled by committees hand-picked by the board.

Once the decision is made to oust the guy, he really has no chance. All that remains is the need to find a pretext. Next thing you know, the unthinkable happens: The hardest working, most innovative, and most effective person at the top is out. The board gets to keep the money. The disgruntled employees get their pound of flesh. Everyone who stabbed the guy in the back gets a raise.

And life goes on.

I’ve seen this many times over decades where nonprofits kill the goose that lays the golden eggs. Their fate is always the same. The organization maintains some name recognition and funding, but the achievements gradually die, and they become a letterhead where the fame is only the past. This is the triumph of bureaucracy over achievement. It’s a tragedy but unfortunately very common. And extremely wicked.

Part of the problem traces to the legal structure of nonprofits. They aren’t owned by anyone. The board hires the president and the president hires the staff. The board is unpaid, which usually means that they have no reason to be involved in the operations. But all the while, they have a sense that they should be controlling things, even though they rarely understand anything about the operations.

There’s the additional problem that donors have no means to get their money back. They give based on successes, not to provide a living for the bloated staff, much less feed the egos on the board. But once they give, the nonprofit managers and board can do anything it wants. In this sense, they aren’t like investors who can sell the stock anytime. The nonprofits have no legal obligation to give the money back.

On the heels of great success and personal fame for the president, the board can get a faction that grows resentful of the successes of the organization and, especially, the person making it all happen. They believe that they should be in charge and that they deserve more credit. They also tend to resent the president, who isn’t very interested in consulting much with the board. Indeed, that’s precisely the reason for his success and the success of the organization.

But knowing full well of the power they have, they decide to make it clear who’s boss. That guy who thinks he’s such a big shot—really he’s only a hired hand!—must be brought down to size. They always tell themselves that they’re serving the good of the organization. It’s not true. What they’re doing is putting the bureaucracy ahead of the mission. They’re also essentially robbing the donor base.

O‘Keefe will need to start over with a new organization, of course, and he’ll gradually come to recreate his previous achievements and go on to new heights. But it isn’t easy. Project Veritas was something in which he had heavily invested himself and his reputation. Now it’s like he’s starting over. He has the strength to do this, but it’s also very demoralizing.

I once came to a moribund nonprofit with a creaky old website and no real achievements and worked with some people to get things on the right track. I recall asking a few people: “If we achieve our goals and bring in new money and build this brand to new levels of fame and make good on the mission, do you think we will have fewer problems or more?” They all intuited the answer: more. They didn’t know why or how. That is, of course, what happened because that seems to always be how it happens.

The tragedy of this sort of thing of course is that it punishes achievement, rewards pettiness, and builds bureaucracy. So the next guy who inhabits that position spends his days doing nothing except brown-nosing those who control the levers of power. He doesn’t get fired but neither does he achieve anything. And the organization goes on for many years and even decades living off its past both reputationally and financially.

For someone like O‘Keefe, he really can’t ever be a good bureaucrat. And therefore, he’ll continue to deal with similar problems in his life. Sadly, this is how it is for high achievers who take big risks and accomplish great things. They’re called entrepreneurs. We admire them even though we tolerate societies that punish them mercilessly.

To be sure, it very well could be that Pfizer or Big Pharma or some other nefarious force has infiltrated the board of directors of Project Veritas. I’m only saying that the same fate could happen even if that didn’t happen. A successful nonprofit has baked within it all the pathology one needs to oust their greatest asset.

Unjust dessert seems always to be their fate in a world of envious organization men and systems that are structured to grant security only to those who follow the rules and otherwise do nothing. It’s a problem in all organizations, but it especially afflicts nonprofits and governments. But what choice does someone like O'Keefe have except to keep on being great at what he does? A true achiever will never let even huge setbacks stand in the way of doing what is right.