BY JIM DOOLEY – Hawaii state senators today issued a 32-page report that strongly criticized spendthrift and secretive practices at the University of Hawaii and called for close new monitoring of how the Board of Regents and President M.R.C. Greenwood run the institution.

The report was issued by the Senate Special Committee on Accountability following hearings into the causes and results of a failed Athletics Department fundraiser that senators said has cost UH upward of $1.1 million.

It went so far as to suggest appointment of an outside “master” to ensure that changes recommended in the report are carried out as well as a full financial and management audit of the university by the office of Hawaii Auditor Marion Higa.

And the report made clear that Greenwood, who recently accused legislative leaders and the governor of inappropriate meddling in internal University affairs, is in for tough new examinations when the Legislature reconvenes early next year.

The committee said it “is deeply concerned that the failed Stevie Wonder (fundraiser) Concert and its aftermath have caused tremendous public backlash against the University and have tarnished the University’s reputation within the State and at the national level.”

It faulted UH Athletics Director Jim Donovan, Chancellor Virginia Hinshaw, Greenwood and the regents for failure to exercise proper oversight over the plans for the August fundraiser, which was cancelled after Wonder told the university he had never been contacted about the event.

The report, which is addressed to Senate President Shan Tsutsui, said, “your Committee finds that those persons in the highest authority over their respective portions of the University failed to perform their oversight duties.”

“For example,” it continued, “Donovan, as Athletic Director, failed to ensure that those working under him conducted the necessary due diligence before entering into the (fundraiser agreement) and before going forward with the pre-sale of tickets.

“Hinshaw, who was the Manoa Chancellor at the time, failed to provide oversight over the Athletic Department despite the uniqueness of the Concert.

“President Greenwood, who is responsible for the entire University System, failed to ensure that checks and balances were in place to ensure the Manoa administration’s oversight system was adequate and working.

“Lastly, the BOR (Board of Regents) failed to provide sufficient oversight and governance control over the University System,” the report said.

Greenwood’s office this afternoon said she is on a campus visit on the Big Island and has not yet reviewed the report.

“She intends to review the report as soon as possible,” her office said.

Donovan has now been removed as Athletics Director and Hinshaw is on sabbatical after stepping down as Chancellor.

Among the serious flaws the senators found in spending practices at UH were employment agreements reached with Donovan and Hinshaw.

The report said regents’ policies prohibited the award of sabattical leave to Hinshaw because she had not been working at UH for the requisite six years. Even if she had, she would only have been entitled to six months of leave instead of the 10 months she received (at a salary of $28,700 per month).

Greenwood and Hinshaw’s replacement as Manoa Chancellor, Tom Apple, removed Donovan from the Athletic Director’s job after the concert was cancelled. When he threatened to sue the university, he was transferred to a new job in Apple’s office with a three-year contract ast a pay of $211,000 per year.

The report released today said that arrangement should have been approved by the regents when it was signed.

And the report said Apple’s five-year employment deal, which pays him $439,000 per year, violated regents policies which limit such contracts to no more than three years in length.

The senators also deplored the University’s penchant for paying premium prices when getting rid of executive employees, saying it “appears to reward individuals for inadequate performance.”

Among the payouts cited by the committee: more than $1 million paid to former UH President Evan Dobelle; $600,000 to former head football coach Greg McMackin; and $312,000 to former Athletic Director Herman Frazier.

The senators also questioned UH’s payment of millions of dollars for outside legal and public relations. The report said much of such work could be handled by UH staffers and demanded an accounting of precisely how much money UH has spent on the services in recent years.

The report also faulted the university and particularly the regents for secrecy..

“Your Committee finds that at times, the BOR appears to have conducted its meetings with a lack of transparency, including the way it handled the aftermath of the failed Concert,” the senators found.

They said the regents appeared to have violated the state’s open meeting laws in their conduct of some closed door meetings. And the report also said the university and regents failed to fully comply with the state’s open records law in releasing certain documents or parts of documents to the committee.

Sometimes the regents appeared to blindly rubberstamp actions by Greenwood and University officials, the report said.

“In questioning the President and certain members of the BOR, it became clear to your Committee that there are serious questions concerning the BOR’s independence from the President,” the report said.

“There appears to be a pattern that BOR decisions are predetermined or made for the BOR ahead of time so that individual Regents have little choice but to go along with the recommendations presented to them,” said the senators.

M.R.C. Greenwood

The report did not even address a letter which Greenwood sent to the regents last month that demanded a $2 million payment if her employment contract, which runs though mid-2015, is terminated early.

Sen. Donna Mercado Kim, chair of the committee, said she did not received a copy of the letter until last week, too late for the senators to discuss its contents in the report.

But committee member Sen. Sam Slom said today that the letter was “an insult and an outrage.”

He said that as a taxpayer and UH alumnus, he is “sick and tired of being extorted, threatened, having to pay moneys for non-educational related problems.”

Greenwood later withdrew the letter and apologized for submitting it.

Last week, regents decided not to end or alter her employment agreement.

In the letter, Greenwood repeated earlier claims that legislators had exerted improper outside pressure on her to reinstate Donovan as Athletic Director.

Kim today denied any such pressure was brought to bear on Greenwood.

The report noted that, while the university enjoys political autonomy, the Legislature “has the exclusive jurisdiction to identify laws of statewide concern, which would presumably apply to the University, and the Senate has advice and consent authority and responsibility for the Governor’s appointments to the Board of Regents of the university.”

 

Editor’s note: After this report was filed on November 19, the University issued the following statement on November 21: The Board of Regents is currently reviewing the Senate Report. We will read the report and consider the recommendations of the Senate Committee on Accountability. The board shares the Senate’s desire to strengthen the University of Hawai’i and improve its service to the people of Hawai’i. We have already initiated several efforts to tighten policies and procedures, as identified by our own internal audits and Advisory Task Group report. In compliance with state Sunshine Laws and the board’s own governance practices, action on these issues will take time and must occur in a transparent and inclusive manner. The board appreciates the desire voiced by our various community stakeholders to make the university a better place and will continue its efforts to improve the university system.”

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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com