`Reader's Digest''s Hidden History--Part 12

(The following article originally appeared in the October 27, 1993 issue of the now-defunct alternative Lower East Side weekly, Downtown. Between 2007 and its recent bankruptcy, Reader’s Digest has been owned by Citigroup board member Tim Collins’ Ripplewood Holdings’ private investment/leveraged buy-out firm. See below for parts 1 to 11 of article).

About 53 percent of the non-voting stock of the profit-making Reader’s Digest Association was owned by “non-profit” institutions like the Metropolitan Museum of Art, Lincoln Center and the New York Zoological Society in the early 1990s. But the DeWitt Wallace Reader’s Digest Fund and the Lila Wallace Reader’s Digest Fund which Mr. & Mrs. Wallace established before their deaths in the 1980s still owned over 50 percent of the voting stock of the Reader’s Digest Association, as well as about 30 percent of its non-voting stock, in the early 1990s.

The “non-profit” DeWitt Wallace Reader’s Digest Fund owned $1.1 billion in assets and was the 15th-largest U.S. foundation in terms of assets in the early 1990s. The “non-profit” Lila Wallace Reader’s Digest Fund owned $802 million in assets and was the 20th-largest U.S. foundation in terms of assets in the early 1990s. And the same U.S. Establishment figures who directed both the “non-profit” DeWitt Wallace Reader’s Digest Fund and the “non-profit” Lila Wallace Reader’s Digest Fund also directed the then-profit-making Reader’s Digest Association Incorporated in the early 1990s. (end of part 12)

(Downtown 10/27/93)