Internal documents reveal that former executives at the John F. Kennedy Center for the Performing Arts allegedly fabricated financial records to conceal deficit spending. Kennedy Center President Richard Grenell stated that under the leadership of former president Deborah Rutter, the organization reported $26 million in “phantom revenue,” misleading the board into believing they were approving a balanced budget.
Chief Financial Officer Donna Arduin, appointed during President Donald Trump‘s administration, corroborated these findings, asserting that the 2025 budget included fictitious income and that donor funds intended for debt retirement were reclassified as a “sustainability fund” to mask deficits. Arduin emphasized that audits, which occur after the fiscal year, do not review the budgeting process, highlighting a gap in oversight.
The alleged financial mismanagement has prompted Grenell to refer the matter to the U.S. attorney’s office, describing the actions as “criminal.” The Kennedy Center, operating on a $230 million annual budget, reportedly faced an operating deficit of $100 million and a bottom-line deficit of $26 million under the previous leadership.
In response to the allegations, Deborah Rutter denied any wrongdoing, stating that budgets were prepared transparently and approved by the board, including Trump-appointed trustees. She maintained that the Center was fiscally sound at the time of her departure.
The controversy has led to significant changes at the Kennedy Center, including staff reductions and a shift in programming focus. Under Grenell’s leadership, the Center aims to prioritize commercially viable shows to address financial challenges, moving away from previous initiatives that contributed to a reported net margin loss of $72 million.
