Twenty-four years controlling Humboldt Creamery’s books; now former CEO accused of fraud

By Marilyn Davin

Who is Rich Ghilarducci? Those who knew him speak out

Originally published in the "4-23-09" issue.



Just five years ago, Humboldt Creamery CEO Rich Ghilarducci, right, was surrounded by local, state and federal lawmakers as he touted the success of the cooperative. From the left, Supervisors Jimmy Smith and Bonnie Neely, state legislators Wes Chesbro and Patty Berg, Congressman Mike Thompson and creamery board member Dennis Leonardi. The 24-year employee of the creamery abruptly resigned in February and left the state.

“(Editor’s note: This is the first of a series of articles.)

Rich Ghilarducci is a household name in Humboldt County, a business icon and well known in national dairy industry circles. But what was he really like? As a boss? As a colleague?

He began at the creamery in 1985 as a 25- year-old with a new title: chief financial officer. Twenty-four years later he put his keys to his company car, along with his Blackberry, on his office desk and left for Arizona, saying nothing,except through his attorney who advised the creamery to take a close look at the company’s books for possible “financial irregularities.”

The Enterprise spoke with several persons who worked closely with Ghilarducci in recent years and offered their insights into his management style, his temperament, and the qualities that make Rich Ghilarducci the unique person he is. Repeated calls and emails to Ghilarducci’s attorney were not returned.

A former employee spoke on condition of anonymity – an unusual condition for this paper but a necessary one given the sensitivity of events still unfolding at the Humboldt Creamery and the growing likelihood of future criminal charges in the case.

The Humboldt Creamery sponsored the Easter Seals – an organization that provides services to adults and children with disabilities of all kinds – from 2005 through part of 2009, when the creamery abruptly dropped out.

Then Easter Seals site director Helen Rene Gale, former long-time Humboldt County resident, said that she and Ghilarducci spoke on the phone and through email before they actually met. She said the first thing she ran into was Ghilarducci’s inaccessibility.

“We were thrilled [that he was taking over the Telethon] but could never get him on the phone,” she said. “I have never felt so dismissed by anyone…and felt insulted and somewhat taken aback by his approach. He was at the very best patronizing. He took on everything himself. He’s an absolute control freak.”

Gale theorized that his inability to share is “where he got into trouble.

“Instead of sharing the vision…the result was that things were not as good as they should have been. It put an enormous [burden] both on his own staff and the staff of Easter Seals.”

Gale said she tried to talk with him but Ghilarducci never spoke of anything in advance; everything was presented as a fait accompli.

“His response was always ‘no big deal,’ that he didn’t have time. And he didn’t have time, he had more important things to do.”

Despite what she described as Ghilarducci’s autocratic ways, Gale said that he ultimately delivered on the Easter Seals Telethon, more than doubling the previous year’s contributions.

“I felt personally dissed, but he delivered,” she said.

Gale said she likened Ghilarducci to a Shakesperean play.

“Tragedies have a fatal flaw: he had a fatal flaw that brought him down.”

A former creamery employee, who spoke to The Enterprise only on condition of anonymity, said she was part of a group of outside hires that joined the creamery’s staff several years ago. While interviewing for her position, which was both technical and involved direct work with the dairymen, she said she was told, of Ghilarducci, “everything from‘he was a real jerk’ to ‘he did not demand anything he did not demand for himself.’” Once on the job, she said Ghilarducci was threatened by new ideas. “He was threatened by those who were knowledgeable and shut them down.

“There was really no marketing plan,” she said. “Like many in power…I would offer to help, or make suggestions, but he really did not want to hear it.”

The former employee said “He was a master manipulator…he would manipulate people so he could work around them.” She said this included the board of directors, which she said Ghilarducci was successful in separating from executive management. “The board saw what Rich wanted them to see,” she said. “He was very calculating in how he dealt with each group of individuals.”

As far as the budget was concerned, the former employee said that Ghilarducci created it with no input from his executive management. “He created the budget himself,” she said. “I think it was a secrecy thing…there was no sitting down between departments. There was no discussion; it came back and that was it.”

This attitude extended to the implementation of a new IT system for the creamery, which was delayed three times before Ghilarducci’s abrupt departure. “It always came down to “we’re not ready to go,” the former employee explained. “Then he wanted to ‘wait for the busy season’ to be over.”

“In hindsight,” she said, “I know that he himself wasn’t ready. He manipulated the [IT] system… which cost the creamery several million dollars.Now we know that [if the IT systemhad been implemented] everyone would have had access to the information and inventory and financial irregularities would have been discovered.”

When asked if the former employee believed that, if malfeasance is proven, Ghilarducci could have acted alone, she said she doubted that operations was not involved in some way. She offered one example to illustrate.

“In the powder department, before Rich left, they were selling powder. The customer came in to audit a stack of powder bags.” When the first row was lifted, she said, “the rows [of bags] behind it were all empty. I can’t see Rich out there moving those bags himself.”

Despite everything, the former employee said she loved the creamery and thinks the business will be better off in the future having weathered this storm. “They’re working together and taking on a much more hands-on view of the business,” she said. “The complexity of the business worked in Ghilarducci’s favor, especially with a 20-year-old data system. The lesson learned? “If you can’t track a dollar from sale to accounts receiving, there’s something wrong. Nothing is that complicated.”

She said that the real victims are the families who depend upon the creamery for their livelihoods and feel that Ghilarducci personally betrayed them.

“I’ve spoken with families who’ve said ‘we thought he was our friend,’” she said. “He didn’t even have the decency or the courage to go to the board, say ‘I screwed up,’ and help unravel what he had done. He was a coward and couldn’t deal with the humiliation.”

As for the recent Enterprise story confirming that Ghilarducci is in Scottsdale, Arizona, she said, “It must be nice sitting by your pool while everyone at the creamery is scraping up your mess.”