Today’s devastating Civic Stadium fire prompted me to look at the agreements between UO Foundation CEO Paul Weinhold, UO Presidents Frohnmayer and Lariviere, and Duck Athletic Directors Bellotti and Mullens for the UO Foundation guaranteed loans that financed PK Park, which became the Eugene Emerald’s replacement field.
One interesting clause shows that UO is using general unrestricted gifts to the UO Foundation – i.e. gift money that could be used for academic purposes – to subsidize the Duck Athletic Fund. Furthermore, the agreement specifies that UO’s academic side can’t reduce those athletic subsidies until the PK Park balloon loan is repaid, in 2021.
The full MOUs – which UO kept secret until I made a public records petition to the Oregon DOJ – are here:
I’ve made a public records request for the accounting records:
Date: June 29, 2015 at 11:19:25 PM PDT
To: Lisa Thornton <firstname.lastname@example.org>
Cc: Eric Roedl <email@example.com>
Dear Ms Thornton –
This is a public records request for BANNER accounting statements showing how much in UO Foundation general unrestricted gift funds and gifts designated to general operations (as distinct from Duck Athletic Fund or other contributions specifically earmarked by the donors for athletic purposes) have been allocated to the UO Athletic Department, for each of the fiscal years from 2008 to 2015.
I attach a copy of the PK Park loan MOU’s for 2009 and 2011, which note the existence of these allocations.
I’m ccing Duck AAD Eric Roedl, as he should be able to easily produce these records.
Not the UO Foundation. The OSU Foundation. Their helpful public records person sent me their 990 the day after I asked for it, here.
In comparison, as in past years, the University of Oregon Foundation seems determined to drag out the release of their IRS 990 non-profit reporting form until the last possible day – May 15. Their FY closed on June 30, and the report was due Nov 15. But they’ve applied for two consecutive 3-month extensions, meaning the data will be 10.5 months stale by the time it is public.
Why the delay? Perhaps they don’t want the public to learn more about their IAAF Championship bid, or the costs of their plan to develop the EWEB land. Or perhaps they’re just being shy about their executive salaries and expenses.
I emailed UO Foundation CEO Paul Weinhold and Compliance Officer Erica Funk last week, asking for the reasons for the delay, but they didn’t answer.
The PBS News Hour uses the Frohnmayer family tragedy with Fanconi’s Anemia and the UO/FSU Rose Bowl game as a hook to examine the larger issue of research on rare diseases, here:
HARI SREENIVASAN: Dr. Summar, that attention, focus, there are 7,000-plus rare genetic disorders out there. And I’m going to feel a little callous saying this, but it’s almost the best thing that can happen is a celebrity gets it.
DR. MARSHALL SUMMAR, Children’s National Medical Center: In many ways, there’s some truth to that. …
HARI SREENIVASAN: Dr. Summar, what about these other 7,000 diseases? How do they gain kind of attention, especially from the pharmaceutical companies, right?
I mean, I hate to be a capitalist about it, too, but where’s the market? If it’s only 1,000 people or 500 people, do drug companies say, OK, we will take that risk and we will put in all that money into research and development and try to find a cure, vs. going after diabetes or cancer, right?
DR. MARSHALL SUMMAR: Well, that’s actually a great question, because, historically, they didn’t. They stayed away from the rare disease field. They figured there weren’t that many patients. There wasn’t much market. …
4/26/2010: What do gifts buy?
Greg Bolt of the RG will tell you that Pat Kilkenny has been working for UO without a written contract, just like Bellotti did. Not a surprise at this point. But why did Dave Frohnmayer ever put Kilkenny in charge of the UO athletics department, and let him decide how many millions of dollars – most of it public money, or tax deductible gifts – would be spent how, and on which coach?
These things are very complicated and involve lots of mutual respect and consideration of the public interest are usually about money.
Frohnmayer received $200,000 per year in pay from donors to the UO Foundation, and a special $150,000 bonus in 2009. These payments to Frohnmayer amounted to about 3% of the entire payout from the UO endowment that year.Who gave this money? What were the terms of the gifts? The Oregon Attorney General has ruled that the UO Foundation can keep this a secret.
But the IRS has released the data on donations from Pat Kilkenny’s “Lucky Duck Foundation” to Dave Frohnmayer’s Fanconi Foundation. Courtesy of the IRS and www.guidestar.org. Kilkenny gave $240,000 the year before Frohnmayer appointed him as Athletic Director, and another $100,000 each year since.
This is a sad story for everyone involved, in just about every possible sense. And no one would argue that Frohnmayer benefited financially from these donations to the Fanconi Foundation. But they create an obvious potential for a conflict of interest. Frohnmayer should have immediately made them public, and recused himself from any decisions involving Pat Kilkenny. Instead he kept quiet and then appointed him UO Athletic Director and gave him control of a budget of about $60 millon, mostly public funds. Not good, Mr. Frohnmayer.
I’ve got a bunch of new data on the UO Foundation from various sources, but haven’t had time to put it together. Fortunately Matthew Kish of the Portland Business Journal is on it, with several recent stories:
Christian Hill has the story in the RG, here. This development process will raise lots of questions about the secretive foundation, and perhaps will prompt some transparency from them. I’ll have more coverage in the coming weeks.
Chuck Lillis, the Chairman of UO’s new Board of Trustees, wants to raise $2 to $3 billion to get UO back on the AAU track. Gottfredson is not delivering. The word is his style does not go over any better with alumni than it does with students and faculty.
Now UO’s strategic communicators are doing their best to move the goalposts. I’m thinking that Mr. Lillis, who has been very generous himself and has called for the Trustees to develop quantifiable goals for Gottfredson’s next performance review, is not going to be fooled this easily:
Aug 19, 2013: Giving to the University of Oregon surpassed the $200 million mark during fiscal 2012–13, a banner year highlighted by a large increase in gift commitments providing student, faculty and research support. Individuals, companies and foundations contributed 41,460 gifts and pledges helping propel the university’s endowment to a record level. [2013 UO News link here.]
July 28, 2014: For the 2013-14 fiscal year, 77 percent of donors made gifts toward academic purposes. Individuals, companies and foundations made 49,904 gifts and pledges totaling $115,150,868, helping propel the university’s endowment to a record level. [2014 UO Around the O link here.]
From what I can tell the largest donation Gottfredson has brought in so far was $10M – for a new softball stadium. Seriously. More on the UO Foundation here.
6/21/2014 update: The Arizona Republic has the story here. No word on how much Duck money was involved.
2/1/2013: No Policy Update: Duck administrators fly south for Felony Bowl
UO has no policy on free tickets or travel – not exactly “best practices” when it comes to claiming it’s exempt income, folks.
From: “Thornton, Lisa”
Subject: Public Records Request 2013-PRR-185Date: February 1, 2013 12:28:59 PM PST
Dear [UO Matters]-
The University does not possess records responsive to your request for ” a copy of UO’s policies and/or procedures on paying for travel and tickets to away games and/or postseason games”, made 1/28/2013.
Thank you for contacting the office with your request.
Office of Public Records
1/28/2013: Ever wonder how the Ducks get our administrators to look the other way about the accounting tricks that leave the academic side holding the bag for millions in athletic department costs? Free junkets are part of it. The Fiesta Bowl has a long history of corruption, see here. Continue reading →
5/14/2014 update: The UO Foundation has told me that they will release their IRS 990 form tomorrow. This should have been made public no later than November 15, but the foundation requested and received two 3 month extensions from the IRS. Tomorrow is their final deadline. The form will include information on expenses, salaries for their highest paid employees such as Paul Weinhold and Jay Namyet, and some rudimentary information on what the foundation does with the money it manages for UO. Probably not much clarity on how much goes to the Ducks and how much to UO academics, but I’ll post what there is, when I get it.
11/20/2013 update: Two weeks ago I received a “demand for retraction” from Thomas Herrmann, legal counsel to the University of Oregon Foundation, regarding this post which I first published on 10/25/2013. (Page down to read the original post in its entirety.)
Great news – the Daily Emerald has the story, here. Not clear how much of this is for athletics, e.g. Knight’s ~$125M “Legacy Fund” or the $5M Robin Jaqua endowment that Johnson Hall let the jocks hijack.
For a tax-exempt non-profit, the UO Foundation releases very little data on how they spend money. Their IRS 990 was due 5 months ago, but they keep asking for extensions. I’m guessing they’ll release it on the last possible day: 5/15/2014.
They did release this info for the 2013 AY. It’s incomplete, but shows $21M for athletics, $723K for research.
Of course I mean the OSU Foundation, report here. In contrast, while the UO Foundation’s report for the fiscal year closing June 30 2013 was due Nov 15, they’ve filed for an extension until Feb 15, and they will presumably file for another, preventing the release of the IRS required information on revenue, expenses, and executive salaries until May 15 2014. They also haven’t released their standard annual report showing what they spent donor money on, usually out in September.
What’s that about? My guess is that UO’s special supplemental retirement plan for current and former executives and coaches was underfunded, so they hit up the Foundation for $7.2M to make up the difference. To put this in perspective, for 2011-12, the last year for which they’ve released data, the UO Foundation spent $7.0M on merit and need scholarships. Total payout from the endowment was roughly $21M. No wonder Paul Weinhold decided not to put out an annual report this year.
3) Transparency and accountability. If the UO achieves a new degree of
autonomy from the OUS and the Oregon Legislature, we are concerned that the
UO be held to high standards of administrative transparency. Section 9 of the
Legislative Concept states that
“The UO would continue to be subject to[…]the public governance provisions of state
law: The Public Records and Meetings Law, Government Ethics, Investment of
Public Funds, the Public Employees Collective Bargaining Act, Public Retirement,
and the Oregon Tort Claims Act. But the UO would be exempted from many of the
business regulations applicable to state agencies, such as the Administrative
Procedures Act.” (p30)
The New Partnership financial plan would create a large endowment to be
managed by the UO Foundation. It would thus shift oversight and accountability
from the Oregon Legislature and the OUS to the Foundation. This shift should
not occur without increased transparency from the Foundation. Donors, faculty
and students, and Oregon citizens should all demand greater scrutiny of the
Foundation’s investments and its administrative expenditures.
Needless to say the Foundation has done the opposite. They didn’t even put out an annual report this year, just the mandatory auditors statement. If the SBC has done any followup, I haven’t heard it, and what I can tell this 2010 report was their last report to the Senate, although their charge calls for annual reports on UO’s financial status etc.
Greatest passions: Oregon pinot noir, sports, antique mechanical banks.
First choice for a new career: I started out in athletic administration, and if I had to pick a second career it would be to go back to working for the University of Oregon’s athletic department. Go Ducks.
[Above updated to note that Anderson is Chair, Holwerda is Chair Elect. Thanks, commenter.]
The ORS 31.200-31.225 statute that Mr. Herrmann cites in his take-down demand is titled “Liability of radio or television station personnel for defamation”. 31.205 discusses “Damages recoverable for defamation by radio, television, motion pictures, newspaper or printed periodical”. So I guess I am a professional news organization, at least in the eyes of the UO Foundation. Section 31.215 lays out the following procedure for retraction demands:
(1) The demand for correction or retraction shall be in writing, signed by the defamed person or the attorney of the person and be delivered to the publisher of the defamatory statement, either personally, by registered mail or by certified mail with return receipt at the publishers place of business or residence within 20 days after the defamed person receives actual knowledge of the defamatory statement. The demand shall specify which statements are false and defamatory and request that they be corrected or retracted. The demand may also refer to the sources from which the true facts may be ascertained with accuracy.
(2)The publisher of the defamatory statement shall have not more than two weeks after receipt of the demand for correction or retraction in which to investigate the demand; and, after making such investigation, the publisher shall publish the correction or retraction in:
(a)The first issue thereafter published, in the case of newspapers, magazines or other printed periodicals.
(b)The first broadcast or telecast thereafter made, in the case of radio or television stations.
(c)The first public exhibition thereafter made, in the case of motion picture theaters.
(3)The correction or retraction shall consist of a statement by the publisher substantially to the effect that the defamatory statements previously made are not factually supported and that the publisher regrets the original publication thereof.
(4)The correction or retraction shall be published in substantially as conspicuous a manner as the defamatory statement. [Formerly30.165]
I have received a plethora of advice on how to respond to this threat. Several attorneys have looked at it, and my post, and said that they do not think that my language is an accusation of criminal activity, particularly given the full context of the post. They have suggested I call the Foundation’s bluff and then file an anti-SLAPP countersuit against them, if they proceed with a lawsuit against me.
I was also told that that the language in Mr. Herrmann’s blustery last paragraph would be quite helpful in a counter-suit, given that anti-SLAPP laws such as Oregon’s are specifically designed to make it difficult to use defamation lawsuits to limit public discussion, as his threat seemingly proposes to do.
One reader suggested that I offer to replace the phrase that the Foundation claims to interpret as an accusation of criminal activity, i.e. “money laundering cash for the Duck Athletic Fund”, with something like “lovingly laundering sweaty jockstraps for the Duck athletic department”. Thanks for this proposal, really.
In the end, I decided to follow the precedent established by noted barrister John Cleese. Mr. Herrmann, you may take this video as my response, in full, to your threatening letter:
The DVD is available from Amazon for $14.98, here.
Meanwhile, back in Chicago:
Chicago State University seems to have some of the same insider dealing issues that have troubled UO. Check out their “Crony State University” blog, written by 8 faculty. Impressive.