William G. Mitchell, the controversial head and 26-year employee of the Southern California chapter of the Better Business bureau has resigned. The company’s director of operations, Bob Richardson, said Mitchell has resigned for health reasons. Three months ago, Mitchell underwent open heart surgery.
The entire national organization of the non-profit business rating has been under attack recently for the use of a rating methodology which gives dues-paying members better ratings than others. The system was created under the leadership of Mitchell within the Southern California operation.
Mitchell helped devised the letter-grade system that has been in use for the last five years. Previously, the organization used a “satisfactory/unsatisfactory” BBB rating.
Businesses have long complained about high-pressure tactics of BBB employees and that the sales tactics amount to a pay-for-play arrangement.
Last month, the charge was underscored when an ABC News investigative team signed up phony businesses for membership in the Southern California BBB, and immediately received A grades. The investigation also looked at businesses that were not members and had very few unresolved complaints, and found that they were given much lower ratings.
The national organization is currently conducting an audit of operations of the Southern California chapter, according to Alison Southwick, a spokeswoman for the National Council of Better Business Bureaus. Last month the national operation said it would stop giving better ratings to companies on the basis of dues-paying status.
Mitchell was also heavily criticized for the salary paid to him annually by the non-profit. According to its 2008 tax filing, Mitchell was paid $409,490 that year. His salary was far more than any local heads of the BBB, and greater than the organization’s national president.
Ken Berger of the watchdog group Charity Navigator, which tracks non-profits, said it was important to “shine the light of transparency on questionable salaries.” Earlier he said that Mitchell’s salary was out of line with others within the BBB and at comparable organizations.