By Jerry Kopel
Thank goodness it is the end of 2005. The past year has left the University of Colorado knee-deep in muck, partly in thanks to the University of Colorado Foundation, Inc. But it didn't have to be that way. The foundation activities could have been exposed 17 years ago with a little backbone and courage from the legislative Joint Budget Committee (JBC).
In January of 1988, a whistle blower letter to me led to a written admission by Dr. Bernard Nelson, the Health Science Center chancellor, that he had spent $6,296 on a going-away party for hospital director Robert Dickler. Nelson claimed money for the party came from his "Chancellor's Gift Account."
I tried to dig deeper and get the Joint Budget Committee and the Legislative Audit Committee interested.
Although not a member of the Audit Committee at that time (I had been earlier) I managed to convince Sen. Tilman Bishop (R) to allow me to do a preliminary examination of the foundation. But the only papers the foundation agreed to and did produce were final tax filing figures without the background information on which those figures were based. And my examination of foundation witnesses, without documentation, proved fruitless.
I requested, in writing to the Joint Budget Committee, for a full-scale investigation with subpoenas. My request was ignored by the then leadership of the JBC. I had not turned up a "smoking gun" and no investigation was launched.
The "smoking gun" then appeared in a Denver Post article by reporter John Diaz on March 27, 1988, who explained what was happening.
"In these lean times, it would be unrealistic for the University of Colorado to ask state legislators for luxury sky boxes at Folsom Field, a $700,000 mansion for the president, or money for chancellors to spend on gifts and entertainment.
"So where is CU getting the money for such things? From the University of Colorado Foundation, Inc. a sophisticated, somewhat secretive, and increasingly aggressive fund-raising agency formed by the Board of Regents in 1967...
"In two decades, the foundation has grown from a shoestring operation into a money machine taking in $25 million a year from donations and investments."
The Diaz article revealed how the foundation "sweetened CU staff paychecks" and "provided discretionary accounts for administration."
"President E. Gordon Gee and chancellors at CU's four campuses receive accounts to spend as they see fit. At the end of February, the high-ranking administrators had almost a total of $100,000 at their disposal.
"The foundation's resistance to public scrutiny has been an irritant to some legislators, especially because alumni and other contributors receive tax deductions for donations made to the foundation.
"They should have to make a decision either to do away with their tax deductible status, or make an accounting for the way dollars are spent" said Rep. Jerry Kopel (D). "These are state institutions we are talking about."
Diaz discussed the "frustration" felt by the JBC in getting information about the foundation's discretionary fund. He quoted Rep. Elwood Gillis (R), the JBC chairman, as to foundation assets. "We don't know where they get them...We don't know the flow of their revenue."
Tim O'Brien, then state auditor, in a Silver and Gold article on April 7, 1988 stated "In my mind we clearly have the authority to conduct an audit of the foundation if we so desire. But because of the size and complexity of the organization, a foundation audit could be a significant use of our staff resources."
O'Brien said, according to the Silver and Gold article, such an effort would not be undertaken without direction from the Legislative Audit Committee.
"Although members of the JBC recently indicated their concerns for more accountability by the foundation" wrote the Silver and Gold reporter "they didn't take any formal action on the matter." Admitted Sen. Robert DeNeir (R), JBC vice chairman "We should know where the money is going. We're leaving something hanging that we should know about."
Seven years later, the issue surfaced again within the legislature, this time in the Senate where Sen. Al Meiklejohn (R) discussed the foundation during debate on House Bill 1001 dealing with non-profit corporations that have ties to state government.
John Sanko of the Rocky Mountain News (RMN) quoted Meiklejohn in a March 31, 1995 article:
"I think some of these non-profits have been used to run money through -- things like the president's mansion at Colorado University.
"We were absolutely deceived on that. We were told the foundation was buying it (the mansion). It wasn't at all. The university was paying for it and laundering the money through the foundation."
Meiklejohn's comments were based on an article by RMN reporter Mike Romano, who discovered the foundation "borrowed money" from the university to build the mansion , even though the foundation had over $133 million, and was paying the university back from state budget funds.
"The university...lent the foundation $500,000 from a Health Science Center parking fund when donations lagged for the 4,500 square-foot Italian-ate mansion for CU's president. The foundation received a preferential interest rate, with payments delayed until May, 1990."
In his column, Romano wrote: ".... CU has paid its own foundation $35,000 a year in tax money as a lease payment on the stately home -- an arrangement that allowed the foundation to pay back the loan with the university's own money, at taxpayer's expense.
"The university's payments to the foundation -- $2,917 a month, which matched the foundation's monthly loan payments of $2,917 to the university -- were ordered stopped by the regents. Foundation officials then returned $423,263 to the university on June 30, 1993 of which $215,800 constituted lease payments from the university to the foundation.
I reported on the Romano, Sanko, Diaz and Silver and Gold articles and quotes in a Colorado Statesman column April 28, 1995.
Perhaps the University of Colorado's motto should be "Minimum est Nihilo Proximan", the smallest is next to nothing, or in today's world, "too little and too late."
(Jerry Kopel served 22 years in the Colorado House.)
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