President Lariviere puts down a few markers:

4/7/2010: From Rachel Bachman in the Oregonian:

“This institution did not follow acceptable business practices in the past,” Lariviere said. “That will not be repeated under my administration.”

 and Greg Bolt in the RG:

The university’s legal department late last month said it didn’t realize that there was no contract for Bellotti until last winter, after Bellotti told Lariviere of the ESPN job possibility. However, The Register-Guard had been asking the legal department since the previous summer for the document but received no reply. The newspaper submitted requests for the contract on June 25 and Nov. 11, and again on Jan. 14.

Asked about the UO’s failure to respond to those requests and the difficulty of getting public records in the past, Lariviere acknowledged the university has not lived up to the spirit of the open records law and pledged changes.
“As a result of our discoveries in this, we are going to change a lot of the university’s practices,” Lariviere said. “At this point I can’t tell you exactly what the response will be to any individual request, but I can tell you we will be as responsive, open and transparent as we possibly can be.”

We’ll see.

Bellotti’s retirement deal is hardly the only fishy one

4/6/2010: There will be a lot of attention paid today to the unusual verbal contract which, apparently, Frohnmayer and Kilkenny negotiated with Bellotti with the help of UO General Counsel Melinda Grier – leaving President Lariviere holding the bag.

Here’s another case of the sort of sweetheart deals that have become common among UO administrators:

Former President Frohnmayer’s unusual contract with former Provost John Moseley is here. It seems to be a blatant attempt to subvert the PERS rules. OUS auditor Pat Snopkowski looked into this, and her report forced UO to write this contract amendment, signed by Moseley and UO Provost Jim Bean.

Moseley’s new contract gives him responsibility for only one of the 4 job duties laid out in his original contract. He’s now “Liason with Central Oregon”. He does this from his fishing retreat on the Deschutes – you can rent one of his lodges here, for $4300 a week during the high season. Meanwhile UO pays Moseley 1/2 time at a $248,941 FTE, until 2012.

Another tax deductible giving opportunity

4/6/2010: From reporter John Hunt in The Oregonian:

Are you a donor with money still burning a hole in your pocket? Do you feel those nine months went by so quickly that you haven’t adequately thanked Mike Bellotti for his work as athletic director?

Well, for $75 a plate, you can attend a Mike Bellotti tribute dinner.

There will even be a silent auction to raise more money. For what, you ask?

The funds will “be dedicated to covering the costs of the Tribute to Mike Bellotti event,” according to mikebellotti.com. Any overages, it said, will be deposited in the “Athletic Director’s Discretionary Fund.”

Fighting the college athlete hiring cartel

4/5/2010: College athletics produces millions in revenue, and all the profits go to the coaches and athletic directors. This happens because the NCAA acts as a hiring cartel, preventing the athletes from negotiating a better deal – even on such basics as living and medical expenses. The National College Player’s Association is attempting to fight this by organizing the players. That’s going to be a tough fight!

OSAC scholarship overcommitment fallout

4/4/2010: From Bill Graves in the Oregonian:

SALEM – Higher education officials today reviewed options for dealing with a shortage of money for need-based state college scholarships next year, the results of miscalculations that led to too many grants this year. …

The commission expects to have about $32 million to $37 million for the grants next year, about half what it is awarding this year.

Comments

4/4/2010: Lots of hits and lots of comments on the payoff stories, some from people who sound like they know something. Lariviere will have a news conference Tuesday, and maybe he will tell the truth about what happened.

George Schroeder of the RG has a column calling for more transparency and criticizing UO treatment of public records issues.

“More important, though, I hope we’re going to hear that the new president is going to change the way the school conducts the public’s business.” 
UO’s Assistant Counsel Doug Park (dougpark@uoregon.edu, (541) 346-3082) is nominally tasked with filibustering public records requests, but he gets his orders from General Counsel Melinda Grier. Larivierehas done his best to stay out of it. As it happens – and in reaction to the faculty’s own problems getting records from Melinda Grier, in May the UO Senate will be debating a resolution putting in place procedures to improve public records access. Grier’s pissy response is here.

James Day in the SG has a column on academic performance by PAC-10 players. I was surprised Ernie Kent’s players didn’t do better:

To be eligible for the all-academic teams a player must have at least a 3.0 grade-point average and be a starter or significant contributor (freshmen are not eligible because a full year is required to establish an academic record).The Pac-10 found just 11 men’s players who met this standard….

Why can’t men’s basketball players (or football players for that matter) do this? Because they are commodities. Their job is to fill seats, give students something to do on Saturdays, make boosters happy, win games, reel in shoe money for the program and the school and, above all, stay eligible.

So that coaches can eventually get $2.3 million golden parachutes.

Legal issues

4/3/2010: A reader points us to this devastating analysis of the Bellotti payoff, by Ted Sickinger of the Oregonian. I think it’s unfair to blame this on Lariviere, it’s got Frohnmayer’s fingerprints all over it.

The University of Oregon’s $2.3 million golden handshake for resigning athletic director and former football coach Mike Bellotti appears to be outside standard practice for public and private sector organizations, and raises serious questions about UO’s leadership and governance, according to legal and executive compensation experts….

“It’s easy to vilify Mike Bellotti,” he said, “but where we should be holding someone accountable is university president Richard Lariviere and the board of directors.”

Lariviere, who started as UO president on the same day Bellotti became athletic director — July 1, 2009 — inherited the contract issues from his predecessor (Ed: that would be he who cannot be named), though the negotiation of the controversial severance agreement was his responsibility.

UO leaders released an explanation of the payout Wednesday night, but have been silent since. Lariviere is in China, and did (not) respond to requests for comment. In his absence, not a single other university executive was available to answer questions on the subject, according to Phil Weiler, a university spokesman.

“These are questions for the president,” he said.  …

This is hardly the only questionable employment contract at the UO. Frohnmayer hired OIED VP Charles Martinez without an affirmative action search and Provost Bean let him break the usual conflict of commitment rules and collect two salaries. Frohnmayer set up the UO-Bend program so that former Provost John Moseley could have a nice retirement gig – at the cost of millions to UO. UO General Counsel Melinda Grier knows all about these scams. She helped set them up.  Lariviere has done his best to ignore both. The question is whether he can contain this particular scandal.

Given that UO General Counsel Melinda Grier is also an Assistant Oregon Attorney General, and that AG John Kroger appointed her husband Jerry Lidz as his Solicitor General last year, I’m thinking blaming these lapses on her is not necessarily the best strategy – for Lariviere.

A jelly donut. Because I was hungry, sir.

4/3/2010: Apparently Larviere gets back from his trip on Tuesday. People are expecting some fireworks.  Meanwhile, Frohnmayer’s proposed new funding model for UO is a likely casualty of the Bellotti misadventure. UO needs more adult supervision, not less. I’m not saying that the OUS Board is qualified to do this, or has a successful history of it. Just that Lariviere is going to have to fire a few people before he can credibly argue that it is over-regulation that is preventing UO from making good decisions that benefit the public interest. 

Athletics brings glory, honor and purpose to UO

4/2/2010: It’s hard to keep up with the plethora of stories on the Bellotti payoff. In the RG David Steves and Christian Wihtol have a long detailed story that concludes with a partial list of the contradictions in Melinda Grier’s everchanging stories.

Whitol has another story looking at contracts for other UO Coaches. These all only promise buyouts if the coach is fired, leading to the conclusion that Lariviere fired Bellotti. Bellotti then came after UO for a similar payoff, and Lariviere gave it to him.

The RG has another editorial that raises a few questions, as does the Oregonian. State Legislators are writing Lariviere with some very direct questions. There will be more.

In the Oregonian, Canzano has a riff, saying:

Bellotti remains unavailable to comment. University President Richard Lariviere is out of the country, unavailable. Former athletic director Pat Kilkenny won’t talk. And UO general counsel Melinda Grier, who issued a letter of explanation for the windfall late Wednesday, sent out the letter and a timeline, and then hid out behind a mock trial she’s apparently judging. What we have here is mock transparency.

Mike Tohito of the Oregonian has some good quotes:

Paul Kelly, the president of the higher education board, said its inquiry will be conducted with several expectations:

  • To find out if any laws, rules or board policies were violated.
  • To ensure that the agreement does not harm Oregon’s public mission.
  • To help form recommendations by the board on any actions or changes it should take.

“Many faculty members have called me in the last 10 days to raise the question of skewed priorities,” said Nathan Tublitz,  a biology professor and president of the University Senate. “I think the consensus is that the university has to bring our focus back to our core mission, which is education and research. That is what I’m hearing from my colleagues.”

Professor Gordon Sayre, former University Senate president, wrote in an e-mail to The Oregonian, “I’m concerned because donations (by Nike’s Phil Knight) to the Athletics Legacy Fund, which are scheduled to come in in $20 million increments over the next few years, may be spent before they have a chance to actually turn into a Legacy Fund.” 

Professors Tublitz and Sayre are too polite: most of the faculty is saying “President Lariviere, who the fuck is running this place? Please do something to show us that it is not still Melinda Grier, Frances Dyke, Dave Frohnmayer, and Pat Kilkenny.”

A few are saying “OK, firing Bellotti and then not appointing Kilkenny, Baumgartner or Bartko was a good first step to cleaning up the trainwreck and getting control. But now the heat’s on. The truth is we can’t make the bond payments if we piss off Phil Knight. You got the OK from Uncle Phil first, right?”

My take? Last year the state of Oregon paid UO President Frohnmayer a salary of $245,700. Anonymous boosters, laundering their contributions through the UO Foundation – which by law does not have to report the names of donors – topped this off with $199,000 in cash and $150,000 in deferred compensation. Pat Kilkenny has given another $350,000 to Frohnmayer’s Fanconi Foundation. No wonder Frohnmayer sold the school out to the boosters – he got a good price. Firing Bellotti is Larviere’s first effort to get UO back from them. At this point it looks like he botched it though.

Where’s Frohnmayer?

4/1/2010: So far no reporter has been able to get Dave Frohnmayer to comment on the Bellotti payoff. Weird, because Dave obviously had a central role in the “verbal agreement,” and loves talking to reporters. But maybe he’s realized that since he’s still on the books as UO “President Emeritus” for $245,700 per year and has two other paying jobs on the side, he’s not the best person to talk about ethical employment practices at UO? Just in case, here’s his new contact info.

OUS Board to conduct its own investigation of Bellotti deal

4/1/2010: From Mike Tokhito in  the Oregonian:

“In light of these circumstances and disclosures, I’ve requested the director of internal audit, Patricia Snopkowski, to review the agreement and the circumstances surrounding its execution, in order to assure that all applicable laws, rules and board policies have been met,” George Pernsteiner, chancellor of the Oregon University System, said Thursday morning at a meeting the higher education board’s Governance & Policy Committee at Portland State University. 

Pat Snopkowski is very familiar with UO’s funny employment rules – she wrote this audit report on Frohnmayer’s unusual contract with former Provost John Moseley, here. It’s a blatant attempt to subvert the PERS rules. New AD Lorraine Davis got a similar deal from Frohnmayer when she retired as VP for Academic Affairs. Snopkowski’s report led to this contract amendment signed by Moseley and UO Provost Jim Bean. While Moseley’s new contract gives him responsibility for only one of the 4 job duties laid out in his original contract, he is allowed to keep the entire 0.5 FTE in his original contract. BTW, the info for Ms Snopkowski’s anonymous tipline is

OUS Hotline: 1.888.304.7810
Or at www.ous.edu/financialconcerns

Did Lariviere fire Bellotti?

4/1/2010: At this point I think the most likely version is that Lariviere fired Bellotti for mismanagement (the AD deficit, players gone wild, and other things that haven’t yet made the papers). The $2.3 million is Bellotti’s buyout package. A commenter points me to this Ken Goe story in the Oregonian on the same issue, thanks!

From the RG letters:

4/1/2010: From the RG letters:

What do administrators do? So what could be worse than some Duck football players who beat up their girlfriends, steal stuff, get drunk, do drugs, etc.? I mean, really? What could be worse?
Well, I think I know: certain people who get $2.3 million in severance pay (for what?) and former administrators who pull in $30,000 a month (for what?) while students pay higher tuition and underpaid faculty try to figure out what the heck those administrators do anyway.
I didn’t know what the heck they did when I joined the University of Oregon faculty in 1976. And retired now, I still don’t know! I do know that there are lots of administrators. Administering, I guess.
Go Ducks! Just don’t ask me where.
Barbara Dale May
Eugene

Grier’s explanation to the OUS Chancellor and Board President

3/31/2010: FWIW, UO General Counsel and Oregon Special Assistant Attorney General Melinda Grier tries to explain things to the OUS Chancellor and Board President, prior to the board meeting tomorrow, which now has this item as #1 on the agenda. Her letter below is courtesy of the Oregonian. From my reading Grier is saying that there was a verbal agreement on a 3 year contract, but that no one will even claim that verbal agreement included any promise Bellotti would be paid anything if he stepped down voluntarily. As to how we got from story A to story B, well it certainly doesn’t make anyone look good, and it probably leaves Lariviere owing Grier one, which is real bad news for UO.

Grier now says:

“A spokesperson for UO misspoke when she told a reporter there had been conversations between Bellotti and Pres. Lariviere regarding Bellotti’s contract to assume the position of athletic director.” 

She’s talking about this statement (from an earlier RG story):

“Richard (Lariviere)’s decision was based on those conversations he had with Mike Bellotti in July,” (UO Spokesperson Julie Brown) said. “He also took into consideration the current circumstances with the ESPN opportunity as well as the contributions over the 20-plus years Mike Bellotti had at the athletic department.”

 That story also quotes Bellotti as saying

 that he had a “handshake agreement” with Kilkenny and Lariviere concerning the payout.
“There was never a written contract that I signed,” he said. “There were some oral agreements.” There were also some “bullet point agreements” with Kilkenny, Bellotti said, but he would not elaborate on them. 

Grier now says that handshake never happened but that Bellotti will get his money anyway. She also says:

Kilkenny had negotiated salary, and there seemed general agreement that Bellotti’s first-year salary April 2009 – March 2010 would be $975,000; thereafter, it would be $675,000 per year.

Which is weird because the official UO data here lists his fall 2009 salary as $350,000, plus another $325,000 in endorsement payments – not quite $975,000.

Grier is probably right in saying that the payoff money isn’t coming from taxpayer funds though. Apparently it’s coming from Knight’s Athletic Legacy fund. Of course, Frohnmayer told the faculty and the legislature that fund would be used as security for the $200 million in Matt Court bonds. See more from the excellent reporting of former UO undergrad Ryan Knutson, here.

March 31, 2010
George Pernsteiner
Chancellor, Oregon University System
111 Susan Campbell Hall
Eugene, OR 97403

Paul Kelly, Jr.
President, Oregon State Board of Higher Education
c/o Garvey Schubert Barer
121 SW Morrison Street, 11th Floor
Portland, OR 97212

Dear President Kelly and Chancellor Pernsteiner:

In recent days, there have been a number of reports in the media concerning the separation agreement reached between the University of Oregon and UO Athletics Director Mike Bellotti. I have prepared this memorandum and chronology of events in an effort to clarify the series of actions that led to the creation of this agreement.

In November 2008, Mike Bellotti expressed interest in exploring a potential transition from his position as Head Football Coach to the role of Athletic Director with Chip Kelly, then Offensive Coordinator, assuming the head coach position. President Dave Frohnmayer authorized then Athletic Director, Pat Kilkenny, to explore the possibility with Bellotti. Kilkenny had agreed to serve as athletic director through June 2009 but did not desire to extend his contract beyond that time.

Kilkenny and Bellotti explored the potential transition with Kelly who was interested. President Frohnmayer and Athletic Director Kilkenny announced the succession plan December 2, 2008. The date of the transition was agreed to be subject to Bellotti’s decision when he wished to step down as coach. Kilkenny and Kelly negotiated the terms of Kelly’s subsequent contract as head football coach, which they memorialized in a term sheet agreement signed in December 2008.

In March 2009, Bellotti indicated that he was considering stepping down as head football coach prior to the beginning of spring term. Bellotti decided to initiate the transition at that time, rather than waiting until 2010 or later, in order to make an announcement prior to the end of winter term so that the football players would learn of his decision before they left campus for spring break. Bellotti believed it was critical to inform the team of his decision before spring practice began. During the week of March 8, 2009, Bellotti talked with President Frohnmayer as he was making his decision, envisioning a meeting with the team Friday, March 13.

March 12, Bellotti informed Frohnmayer that he had decided to go forward with the transition.

Spring term was intended to be a transition period when Bellotti and Kilkenny could overlap and Bellotti would have a chance to orient himself to the athletic director position. Frohnmayer authorized Kilkenny to negotiate a salary for Bellotti. The first-year salary negotiated was intended to transition Bellotti from his compensation as head football coach, slightly over $1.9 million in 2008-2009, to his athletic director’s salary. Bellotti and Kilkenny agreed Bellotti would be paid $975,000 in salary during the first year (April 2009-March 2010). They discussed additional compensation during that first year only that would be equal to the difference between his salary of $975,000 and his previous year’s compensation.

When President Lariviere took office in July 2009, he assumed that contracts with Bellotti were in place and had no conversations with Bellotti about his contract. A spokesperson for UO misspoke when she told a reporter there had been conversations between Bellotti and Pres. Lariviere regarding Bellotti’s contract to assume the position of athletic director. During early winter, Bellotti told President Lariviere that ESPN had approached him to consider a position as a color commentator. Bellotti had provided color commentary on Oregon Sports Network UO football game broadcasts during the fall and had received acclaim for the excellent quality of his work. At this time, President Lariviere determined that it was in the university’s best interest to expedite this transition and find new leadership for the athletic department. He subsequently began to negotiate with Bellotti regarding the terms of their mutual agreement for Bellotti’s separation of service.

When I learned of their intent, I began in earnest to search for a term sheet or other memorialization of the terms of Bellotti’s agreement. I had previously made requests but had not received anything, although there seemed to be a general assumption that such a term sheet existed. The terms and conditions of all UO unclassified employees, including coaches, are covered by extensive Board Administrative Rules, UO Administrative Rules and policies. Most employees, including most coaches, receive an annual notice of appointment, which they are asked to sign and return. A few employees, including a few coaches whose employment agreements contain terms in addition to the standard terms and conditions, are given more extensive contracts in lieu of standard notices of appointment. Until those more extensive contracts are fully negotiated and executed, the terms of employment are those in Board and UO Administrative Rules and policies and provisions contained in the agreed to term sheets.

It became apparent that no one could produce a term sheet. Kilkenny had negotiated salary, and there seemed general agreement that Bellotti’s first-year salary April 2009 – March 2010 would be $975,000; thereafter, it would be $675,000 per year. There was not agreement regarding other terms or conditions. It was Bellotti’s belief that, during the first year of his contract (April 2009 – March 2010), he would receive the additional compensation equal to the difference between his previous and current year’s compensation. This belief seemed reasonable in the general context of the discussions that occurred in the spring of 2009.

There was not general agreement around other terms. Bellotti believed he was promised a five-year contract. Kilkenny was not authorized to negotiate the length of the agreement. Frohnmayer had no conversations with Bellotti regarding the length of his contract. I recalled general discussions, not necessarily with Bellotti, of a three-year term. Employment contracts longer than three-year’s duration require approval of Chancellor Pernsteiner. Our office was not asked, as would be standard, to prepare a request for Chancellor Pernsteiner’s approval. As a result, President Lariviere assumed a contract term of three years, of which, Bellotti had already served one year. The $2.3 million represents the two year’s salary remaining on a three year contract at $675,000 per year plus the additional first-year compensation that was as yet unpaid. A separation agreement containing those terms was signed by both parties and publicly disclosed upon its execution.

Although the sum paid to Bellotti is large, it represents an amount that is consistent with President Lariviere’s best assessment of what would be due Bellotti. This is especially true for a long-time employee such as Bellotti who has served with such distinction and who is held in high regard.

Some have raised concerns that taxpayer funds will be used to pay this settlement. That is not the case, nor will Athletic Department operating funds be used. The UO will rely solely on donor funds for the payments to Bellotti.

I also want to assure you that President Lariviere has made clear his expectation, which I strongly support, to make certain that any conditions beyond those contained in a standard notice of appointment will be memorialized in writing.

Sincerely,
Melinda W. Grier
General Counsel

RG endorses DOJ review of UO

3/31/2010: The RG editors have endorsed Attorney General Kroger’s review of UO’s $2.3 million payment to Bellotti:

… One thing seems clear before justice officials begin their review: The manner in which the university handles its athletic department contracts and other financial dealings is disturbingly informal and secretive. Head coaches routinely work under informal agreements without written contracts for inexcusably long periods of time. Former basketball coach Kent, UO football coach Chip Kelly, baseball coach George Horton and others have all worked for extended periods without formal contracts. While Bellotti said he was surprised the university did not ask him to sign a contract as athletic director, he noted that he had worked as football coach for as long as two years under handshake agreements.

Requests by this newspaper for copies of coaching contracts are typically met with a response that the final contracts have not been finalized and remain under review by UO general counsel Melinda Grier’s office — and are not available to the public.

That’s inexcusable for a state university, which should be a model of transparency. The fact that significant portions of athletic department contracts often are underwritten by boosters through donations to the UO Foundation is no excuse. In fact, the UO’s secretive handling of contracts has helped fuel allegations by critics who charge that the athletic department has become a Nike subsidiary whose major decisions, including contract terms, are often made in Beaverton. …

Presumably anything that the AG’s office learns from its investigation will be a public record – so we may learn a little about whether it was Lariviere or Frohnmayer who approved this, and what role Melinda Grier had. I don’t expect a very thorough review though – Melinda Grier’s husband, Jerry Lidz, was appointed Solicitor General by John Kroger just last year. The AG’s office already knows how UO does its business, and they know a thorough review would turn up too much trouble.

As the editorial suggests, the issues at UO go well beyond this deal.  By the time he stepped down Frohnmayer was receiving more than half his own pay in the form of anonymous contributions laundered through the UO Foundation. Lariviere is getting about half his salary this way. The assumption is that these donations come in large part from athletic boosters – but the Foundation is allowed to keep the source secret.