A former estate planner who spent 18 months in a New Hampshire prison for stealing $100,000 from a client was hired by a major Hawai'i charity three years later while still on parole, landing an executive's job that initially gave her access to credit card information from some donors.

The National Kidney Foundation of Hawai'i was unaware of Diana Pinard's felony criminal conviction when she was hired in April 2005 as director of organizational planning and operations, according to Glen Hayashida, the charity's chief executive.

Pinard was released from prison in January 2002 and remained on parole until late December 2005, according to Jeff Lyons, a New Hampshire Department of Corrections spokesman.

After learning of Pinard's criminal record on Tuesday, Hayashida said, he began an investigation and placed her on paid leave as a precaution. But he said there has been no basis to suspect any wrongdoing on her part.

Hayashida was alerted to Pinard's criminal past via an anonymous letter that also was sent to The Advertiser and the attorney general's office.

Pinard did not disclose her criminal record when she was hired, and the charity at the time did not do criminal background checks on key management hires — a policy it has since changed, according to Hayashida.

Pinard did not respond to Advertiser requests, relayed through Hayashida, seeking comment.

When Pinard was first hired, her duties included taking credit card information from donors purchasing tables at fundraising events, Hayashida said. That is not part of her current responsibilities, he added.

SECOND RECENT CASE

The foundation case marks the second time in slightly more than a year that a major Hawai'i charity has publicly acknowledged that it hired a key executive without knowing about his or her criminal past.

In April of last year, the Salvation Army said it was unaware that Timothy Janusz had a felony record when he was hired three years earlier to handle large donations for the Manoa-based charity.

Janusz, who had been convicted in 1996 of stealing more than $2 million from an elderly couple in Colorado, recently pleaded guilty to defrauding the Salvation Army and several elderly donors of more than $300,000.

After the allegations against Janusz came to light, the charity said it would do criminal background and credit checks on all employees dealing with the public. Previously, it only checked employees who worked with children.

Those cases and another from last week — an Arizona Memorial Museum employee admitted stealing $170,000 in cash from that nonprofit — have added to the questions being raised about whether Hawai'i charities take sufficient steps to protect donor interests.

BACKGROUND CHECKS

Because the state has one of the weakest oversight systems in the country, donors here rely largely on the nonprofits to police themselves and prevent abuse. Most charities do a good job of that, industry officials and others say.

Trent Stamp, president of Charity Navigator, a watchdog organization in New Jersey, said nonprofits are less likely to do criminal background checks than for-profit companies, partly because of the cost and the antiquated thinking that people join charities mostly for altruistic reasons.

"As a result, you do find people who think they can find work in the nonprofit world if they have committed crimes in other sectors," Stamp said.

Brian Schatz, head of Helping Hands Hawai'i, said he would guess that background checks are common among the major charities here. His organization does them on all employees right before they are hired.

"It's another safeguard to make sure donor dollars are well spent and our clients are getting the best possible service," he said.

John Flanagan, president of the Hawai'i Alliance of Nonprofit Organizations, said it is becoming more common for charities that deal with vulnerable clients, such as children and the elderly, to do checks. But for many others, "I don't think it's a common practice to do a felony check, or check court or police records, or anything like that."

For organizations that make such inquiries, they must exercise care or risk breaking the law.

To prevent discrimination, Hawai'i employers, with some exceptions, are not allowed to ask about criminal convictions when a person first applies for a job. Banks and schools are among the organizations exempt from that prohibition.

Once a conditional job offer is made, however, employers generally are allowed to inquire whether the prospective employee has a criminal conviction within the past 10 years and, if the offense is related to the job being filled, can use that information to consider whether to actually hire the person, according to the Hawai'i Civil Rights Commission.

'UTMOST RESPECT'

At the kidney foundation, criminal background checks of key management hires began after Pinard joined the organization because she was instrumental in getting the charity to adopt more safeguards, according to Hayashida.

Although Pinard did not disclose her criminal past, the situation at the foundation could not have developed into a Salvation Army-like case because Pinard did not handle any funds or have access to them, Hayashida said.

Her main job duties included human resources, internal planning and coordination of projects, according to Hayashida.

Pinard was a trusted manager, he added, whose criminal record does not reflect the person she is today. "The senior management team has the utmost respect and trust in Diana."

Charities generally go to great lengths to try to maintain the trust of donors because they rely on that support for much of their funding. Controversy has the potential to undermine that trust.

Among the many ways the kidney foundation acts to protect donor interests, Hayashida said, is to do comprehensive annual audits.

According to the foundation's most recent federal tax return online, the nonprofit reported revenue of nearly $1.8 million in the fiscal year that ended in June 2006. The bulk of that money, or more than $1.2 million, came from public support.

STOLE CLIENT'S $100,000

Before Pinard moved to Hawai'i, she operated an estate planning business in Chester, N.H.

The stolen money belonged to a client who had received the money in a 1996 settlement of a medical malpractice lawsuit.

Pinard was supposed to invest the $100,000 in an annuity for the client, but she never did so, according to the state Department of Justice. Instead, Pinard gave her client false documents and opened a post office box to serve as a fictitious address for phony investment companies, the agency said in a 2000 news release.

While the criminal case against Pinard was pending, the client received full reimbursement of the stolen money, the release said.

After pleading guilty to four counts of theft and two counts of forgery, Pinard, then 46, was sentenced in 2000 to five to 10 years in prison on the theft charges, with 3 1/2 years of the minimum sentence suspended. She also received suspended sentences of one to two years for each of the forgery charges.

Lyons, the prison spokesman, said Pinard's parole ended before its originally scheduled termination, though he couldn't cite the reasons because such records are confidential.

But the parole board typically ends parole early because of good behavior, he said.

Reach Rob Perez at rperez@honoluluadvertiser.com.