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Report: No Criminal Wrongdoing By UH Employees

August 22, 2012, 10:20 PM HST · Updated August 22, 10:44 PM
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UH Athletic Director Jim Donovan (rt). File photo by Wendy Osher.

By Wendy Osher

Officials at the University of Hawai‘i say there was “no criminal wrongdoing” by UH employees and that the university was “most likely a victim of a fraud in a failed effort to raise money for the athletic department through a concert.

The statement was released on Wednesday afternoon following a meeting in which the law firm, Cades Schuttle, presented UH Regents with a detailed report involving the loss of $200,0000 invested in a bogus concert that was expected to secure the talent of legendary musician Stevie Wonder.

An executive summary of the investigation stated that the firm found no evidence that anyone at UH committed fraud. “It appears to Factfinders that all UH employees were motivated by a desire to help Athletics raise revenue,” the report stated.

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The report determined there was insufficient vetting of the local concert promoter and companies that represented themselves as agents of Stevie Wonder, one of which was wired $200,000 in proceeds from advance ticket sales, said university officials.

The fate of the missing money has since been referred to federal law enforcement authorities.

“We are cooperating with the federal authorities in every possible way,” said UH President MRC Greenwood in a statement. “We understand everyone wants to know where the money went and so do we. But the answer to the question awaits the work of the authorities.”

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Greenwood noted that the report did not find any intentional misconduct among UH employees; but Greenwood said, “We did document avoidable mistakes in judgment. We are correcting that by putting into place policies and procedures to prevent this from ever happening again.”

Greenwood said some employees will have their actions reviewed during annual performance evaluations; and employees involved in financial transactions will undergo additional training. Greenwood has also revoked a policy that provided the athletic department with significant delegation of authority in financial matters.

UH Manoa Chancellor Tom Apple was among those who expressed that it has been a challenging time for the university. “We all understand that the UH Athletic program is one that generates pride and excitement throughout Hawai‘i, and our athletes have the ability to lift our state in so many ways,” he said.

Greenwood agreed saying, “This has been a sad episode for the University of Hawai‘i, our fans and the public. We are sincerely sorry this happened,” she said.

“With your help and understanding, we will emerge from this a stronger university,” she said.

The following statement was released by the University of Hawaii Board of Regents after a multi-hour closed door session:

We apologize for the university’s handling of this matter and are deeply sorry for the concern and upset it has caused in the community. We approve the release today of the redacted report of the investigation and the key findings of the investigation. The report shows a failure of management in the Athletics Department and additional issues with financial controls at several levels.

We ask that everyone remember that the university is the victim in this whole unfortunate incident. We have lost a significant amount of money, and could face litigation.

We want to first emphasize our strong support for the leadership of university President MRC Greenwood and UH Manoa Chancellor Tom Apple.

We also expect and support the public’s demand for accountability in this matter. We recognize that the concert issue was mishandled and anticipate making significant changes to procedures and oversight so that this cannot happen again.

The Board of Regents will oversee these changes and has asked the administration to report back to the board on these plans to improve oversight and procedures.

We are in full support of the university’s decision to move former Athletic Director Jim Donovan to the UH Manoa Chancellor’s office and affirm President Greenwood and Chancellor Apple’s actions in this personnel change. We concur that Jim’s service in this new role will be a suitable and appropriate use of his talents and we look forward to his future contributions to the university.

We are entrusted and committed to improving and growing the University of Hawaii.

***Supporting information courtesy the University of Hawai’i.

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