Revealed Priorities of REALTOR Politics

All the energy around Kenny Parcell, none around SDAR

I have been fairly bombarded by emails, messages, and even phone calls from friends, colleagues, reporters, and acquaintances about my take on the Kenny Parcell saga. My response was that I didn’t have a take that’s worth discussing, because my take is what everybody else is already thinking and saying.

Parcell screwed up. I don’t know what else you call having an affair with a staffer at the organization where you are in leadership. Consensual, yes, but it’s still a terrible decision.

Now, maybe Parcell had his former lover fired, maybe he didn’t; we’ll never know since the lawsuit was settled. Maybe he created a hostile work environment for women at NAR and maybe that hostile work environment was already in place. Whatever the details, if this scandal results in positive changes at NAR and elsewhere, great! Sexual harassment has no place in any organization. So score one for the good guys.

I am writing now, however, because I do find an odd mismatch of… energy and attention. Looking at all of the energy spent on Kenny Parcell and his extramarital shenanigans and comparing that to the near-zero energy spent on what appears to be deep and systematic financial corruption at San Diego Association of REALTORS… I can’t help but think the difference reveals the priorities of REALTORS, the industry press and the leadership of the industry.

Burning Parcell in Effigy

I am currently looking at seven stories about the Parcell situation on Inman:

• NAR harassment, retaliation and evasion revealed in Times exposé

• NAR President Kenny Parcell resigns after NYT exposé

• 5 massive NYT takeaways NAR can't escape

• Agents: Kenny Parcell's resignation is the 'beginning' of fixing NAR

• NAR’s muddled messaging still can't keep up with the facts

• What should happen next at NAR?

• Cover up, circle the wagons, pounce on critics: NAR's MO

That last one is from Brad Inman himself, the Godfather of real estate media; he detailed the culture of omerta that exists in organized real estate:

The sprawling, powerful trade group can be secretive and cultish. If you don’t volunteer, you are shamed. Criticize the beast, and you are ostracized. Leaders and employees who speak out are often isolated and criticized for not following the NAR script. Just ask former reform-minded presidents Leslie Rouda Smith and Elizabeth Mendenhall.

The pattern goes like this: an incident, a firestorm, then coverups, followed by the circling of wagons and the pouncing on critics.

He ends the article calling for “a changing of the guard” as a necessary first step. It’s a fantastic op/ed piece and Brad is right to point out the need for far more transparency. But we’ll return to this.

That’s just Inman. RISMedia wrote a story. The Real Deal wrote two. Real Estate News wrote six. HousingWire wrote two. And now, if you search “Kenny Parcell” you get corporate press — CNN, YahooNews, CBS, etc. — getting in on the action.

None of this bothers me. I’m glad to see the industry press cover this situation fully and give it the attention it deserves.

If Parcell did create a toxic culture of sexual harassment at NAR, then he deserves all that he’s getting. (Of course, somebody is going to have to explain to me how one volunteer leader who has been President for less than a year managed to create a multi-year toxic culture at NAR, and Inman does a far better job at highlighting issues than I could).

In addition, as of this writing, here’s a list of prominent leaders in real estate making lengthy and heartfelt public statements:

• Sue Yannacone, CEO of Anywhere Brands on LinkedIn, and in the comment thread we find leaders like Sherry Chris and Ryan Gorman.

• Bess Freedman, CEO of Brown Harris Stevens, and Kamini Lane are named in that same article.

• Victor Lund of WAV Group is quoted in that article advocating for more sexual harassment training.

And then there’s the letter that made me want to write this.

California Association of REALTOR’s President Jennifer Branchini sent a letter to all CAR members which I reproduce in full with permission from the recipient:

August 29, 2023

Dear [NAME WITHHELD],

Over the weekend, the New York Times published an article about alleged sexual harassment, workplace retaliation and other misconduct at NAR. The article brought into sharp focus a set of alleged egregious behaviors, and led to yesterday’s resignation of NAR President Kenny Parcell, with NAR President-elect Tracy Kasper stepping in to fulfill the duties of president.

This news is extremely upsetting to all of us as a community. We acknowledge the deep disappointment, anger, and frustration we are feeling at this time. We applaud the bravery of the women who have chosen to come forward and share their experiences. It is through such courage to speak out that meaningful change can occur. Men and women who enable this type of behavior through action or inaction should be held accountable. We all have a role to play in making sure we learn from this and become better individuals and a stronger organization. We look forward to the steps NAR will be taking in the days and months ahead and hope these efforts will help in the healing of our industry and our community.

As it has done for decades, C.A.R. will continue to work tirelessly at fostering an environment that is respectful, inclusive, and safe for all individuals. The Association continues to provide workplace training regarding the prevention of discrimination, harassment, and other unacceptable behaviors for its staff. We will not stand for mistreatment within our ranks, including of our staff or any of our members. C.A.R. also offers sexual harassment prevention training courses to help brokerages comply with state law requirements, and offers various other educational events designed to keep its members and staff feeling safe and valued.

Discrimination, harassment, retaliation, and misconduct are not, and will not, be tolerated in any shape or form. I urge all REALTORS® and staff always to treat each other with the utmost respect. Together, we should and can contribute to creating a culture and profession we are all proud to be a part of, and one where everyone feels respected.

Sincerely,

Jennifer Branchini
2023 C.A.R. President

It’s a good letter. Heartfelt. I liked everything Branchini wrote here.

But why did this letter inspire me to write this post?

The Difference is Stark

Here is C.A.R.’s response to the scandal in San Diego Association of REALTORS:

In recent weeks, the Greater San Diego Association of REALTORS® (GSDAR) has been impacted by allegations of wrongdoing by a former CEO, which were followed by a lawsuit filed by four former employees alleging fraud and workplace retaliation. Though the case is currently in litigation, C.A.R. is closely watching and investigating this matter, and is committed to using all available tools in the interim to protect its members. The current GSDAR CEO and Greater San Diego Association of REALTORS® are fully cooperating with C.A.R.’s inquiries.

C.A.R. does not condone illegal activities of any kind and condemns in the strongest terms any misuse of REALTOR® dues. As always, C.A.R. is fully committed to the highest legal, ethical and moral standards. We are exploring all possible avenues and will be undertaking appropriate actions to serve in the best interests of our members.

No letter to all members from Branchini on that issue. Apparently, news of ten-plus years of corruption and financial impropriety is not “extremely upsetting to all of us as a community.” There is no need to acknowledge “deep disappointment, anger, and frustration we are feeling at this time” because… maybe nobody feels any deep disappointment, anger and frustration over mere financial crimes.

“C.A.R. is closely watching and investigating this matter?” Sounds a lot like NAR’s many investigations into claims of sexual harassment over the years.

In case you missed it, I wrote two lengthy posts on what’s going on in SDAR. You can find those here and here.

Search Inman for “Mercurio” and you get two articles, one of which is a rewrite of a press release. Real Estate News has one, which is a rewrite of a press release. The Real Deal and HousingWire have zero stories.

Brad Inman has not written a powerful Op/Ed about SDAR, though if he was looking for an example of employees who speak out to be isolated, criticized, and then fired for not participating in a coverup… there is none better than SDAR.

In fact, what makes SDAR so different is that there was an incident (the filing of the lawsuit by the four whistleblowers) but no firestorm. Not even a campfire. As far as I can tell, there was only my little blog with a single torch. Coverup and circling the wagons and pouncing on critics were all unnecessary because no one in real estate appears to care.

Not one real estate leader has made any lengthy statements about what appears to be over a decade of corruption, criminal activity, embezzlement, and a real culture of fear backed up by retaliatory firings of whistleblowers. If anyone has issued a public statement, I have not been able to find it.

Given that I am married to a woman who has spent a career in real estate, who has personally been a victim of sexual harassment, who has personal interactions that are icky at best and damn-near assault at worst, I am completely onboard with stamping out sexual harassment in the industry. I am not minimizing the damage that sexual harassment does to individuals and to organizations.

At the same time, can we at least agree that embezzlement by the CEO of one of the largest REALTOR associations in the country is a problem? That it’s a bigger problem if the Board of Directors of that Association was either (a) complicit with the embezzler, or (b) grossly negligent in providing financial oversight? Can we agree that there are real questions (all of which I asked in my second post on the topic) to the new CEO of SDAR parachuting into a $600K a year job without (apparently) any job postings, any interviews, any looks at any other candidates?

Kenny Parcell had an affair with a staffer, and maybe created a toxic culture of fear for female staffers at NAR. That’s terrible, and he was rightly removed.

Frank Powell, the President of SDAR, called the REALTOR Association “the Mafia” and appears to be intimately involved with corruption going on for years. He is still President of SDAR. Chris Anderson, the Immediate Past President, is named in the Complaint by the whistleblowers and appears to have been involved in ongoing corruption for years. She remains on the Board. Others whose names appear in the Complaint as having either aided and abetted in Mercurio’s schemes, or at minimum being asleep at the wheel, all remain on the Board. Cory Shepard, the new CEO, was on the Board for multiple years while Mercurio was plundering the Association and the job landed in his lap in rather questionable circumstances.

But when it comes to serious corruption within REALTOR Associations, there is not a peep from anybody. No major industry leader posting public statements calling for investigations or removals or anything. No curiosity from the industry media — the same industry media that is piling on Op/Ed after Op/Ed about Kenny Parcell.

The California Association of REALTORS can only bestir itself to post two corporate-speak PR paragraphs but the President sends a personal letter to all members over Parcell. It is “closely watching and investigating” but nothing has been done to date, not even an interim report… over a month after CBS 8 reported on the situation.

This, ladies and gentlemen, is what you call revealed preference.

The Obvious and Tragic Takeaway

One can only conclude that if you are a bad actor, you should just plunder the Association’s coffers to line your own pockets as much as possible… as long as you don’t engage in anything sexual. Sexual harassment causes “deep disappointment, anger, and frustration” but systematic corruption — including a culture of fear created by firing whistleblowers and staffers and shutting out volunteer leaders who won’t go along with the plundering — creates a giant shrug of disinterest.

What is tragic, of course, is a simple observation.

No one would claim that Kenny Parcell was the unique bad apple when it comes to sexual harassment. No one would claim that now that he has been sent back home, there’s no need to be concerned about sexual harassment anywhere else in real estate.

But it appears that people do think that Mercurio and the SDAR Board are a unique bad apple when it comes to systematic corruption. Now that Mercurio has been replaced with a former Board member, it’s all good; no corruption to be concerned about anywhere, and everybody should go back to sleep.

There is a part of me that does not care. I am not a REALTOR. None of my money was embezzled by anybody. If there is rampant corruption in Association ranks, it does not affect me. It is only my principles that are bothered, and who cares about one random guy’s principles?

But I can’t help but feel sad for my friends, my wife (who is a REALTOR), my clients, colleagues, and other REALTORS and Association leaders I have come to know over the years who are truly honest and good men and women. The REALTOR community has shown its revealed preference with the Kenny Parcell affair. The message could not be clearer:

Steal all the money you can; just don’t sexually harass anybody.

If that is not the message that industry leaders, industry media, and REALTORS everywhere wish to send… then might I suggest trying to match the level of energy and involvement over Kenny Parcell? Brad Inman proudly says that challenging NAR became Inman’s mark, and they discovered hundreds of thousands of readers who wanted sunshine on their trade group.

Let’s see some of that sunshine.

Or not. Let your revealed preferences stand for all to see. Not only members but people everywhere with eyes can see what the priorities of REALTORS, of industry press, and of leaders in real estate are.

-rsh