Shoe designer Kenneth Cole resigned as the embattled leader of the AIDS research charity amfAR after the New York attorney general's office rejected a proposal that would have kept him in the slot, calling it "troubling."
His exit comes amid continuing controversy about an agreement he and Harvey Weinstein made for some fundraiser proceeds — a deal that has spawned a federal investigation, caused a deep rift on the amfAR board and led dozens of activists to sign an open letter in November that called for Cole's ouster.
In a statement Thursday, Cole said that he and four other board members were stepping down because amfAR, with his support, was instituting term limits under new governance rules.
But a scathing letter from the attorney general's charity bureau to the board — obtained by NBC News — shows that Cole's own proposal for term limits would have allowed him to continue as chairman.
The Feb. 2 letter called that option — one of three put forth by a board committee — "particularly troubling."
"Adopting such a proposal would suggest to [the attorney general], as well as to stakeholders in the AIDS/HIV activist community and the public, that amfAR fails to appreciate that a substantial change in leadership is required for the organization to continue to fulfill its critical mission."
Four days later, the AG's office sent another letter to amfAR in which it said the board had one day to adopt term limits that would end Cole's tenure. He can serve as a non-voting honorary chair for up to six months, while the board selects his replacement.
At an amfAR gala on Wednesday night, Cole publicly announced his resignation. In a statement Wednesday, amfAR praised him for "extraordinary dedication" during a 30-year run as a board member and 14-year stint as chair.
"Under his leadership we have raised hundreds of millions of dollars for AIDS research, had a profound impact on millions of people’s lives, and gotten closer to our ultimate goal of finding a cure for this insidious disease," it said.
Cole has been dogged for months by questions about a deal he and Weinstein made to split proceeds from some charity auction items between amfAR and a theater where a show produced by Weinstein had been staged.
The agreement — which was made before a sexual misconduct scandal engulfed Weinstein and sparked the #metoo movement — is being investigated by federal authorities.
Cole has denied any wrongdoing. He has said that Weinstein "has never been a friend of mine" and that the auction deal "was determined to be legal and ethical and was engaged in because it served amfAR's mission."
"Any suggestion that I somehow made this deal as a favor to Weinstein is ridiculous and patently false," Cole said in November.
Weinstein, a longtime supporter of amfAR, donated several lots to amfAR's 2015 gala auction in Cannes but wanted some of the money to go to the American Repertory Theater (ART); an insert in the auction booklet noted some of the money would go to ART.
Weinstein had staged "Finding Neverland" at ART before its Broadway run. And according to The New York Times, the theater had agreed to reimburse Weinstein and other investors for money they sank into the show if they got third parties to donate those sums to the theater.
After the auction, Cole directed that $600,000 to be wired to ART at the request of Weinstein's office, over the concerns of amfAR's chief executive and without board approval, according to emails reviewed by NBC News.
The transaction caused a rift on the board and sparked internal investigations. In 2016, Cole urged board members to sign nondisclosure agreements about Weinstein, and he told NBC News that Weinstein offered to give $1 million to amfAR if everyone signed.
After complaints from some board members, New York Attorney General Eric Schneiderman's office opened a review of amfAR's governance and told the board it had to institute reforms.
But four months later, there were still "deep divisions on core issues," a continuation of the discord that marked the expensive 2.5-year battle over the Weinstein deal, the AG's office said in the Feb. 2 letter,
"To say that this has distracted from amfAR's mission and damaged the reputation of the organization would be a gross understatement," the letter said.
While the board had proposed some changes, "on the critical issue of the leadership and composotion of amfAR's fractured Board, it is apparent that the Board is willing to allow the battles at amfAR to continue unabated."
"This is disheartening," the letter said.
"He, like many of his contemporaries, failed at scandal management 101."
Asked for comment on the AG's letter, Cole said in a statement:
"AmfAR is a very different organization now than it was when i began as chair 14 years ago. I am very proud of what we have built and absolutely recognize the need for governance reform," he said.
He said he would remain involved with AIDS activism. "Though I am stepping aside, I am not stepping away from this fight," he said.
Former board member Peter Staley, who signed the open letter criticizing Cole, said he welcomes the new rules.
"I know this controversy has stirred hate in people's hearts, but I still believe Kenneth Cole is a good man who cares deeply about amfAR and finding a cure for HIV. But he, like many of his contemporaries, failed at scandal management 101 (disclose immediately, take your organizational hit early, and cut loose all offenders)," Staley said in a statement.
"He made human mistakes, not malicious ones. I look forward to working with him on finding a worthy successor to fill his shoes (pun intended)."
Sean Strub, a prominent activist who signed the open letter, praised the AG's office for forcing change that he hopes will bring unity to the board.
"All in all, a good day for people living with HIV," Strub said.