 BARBWIRE
by ANDREW BARBANO This is an edition of the University Scandals 96-97 series, selected installments of which were submitted for Pulitzer Prize consideration. Click here to access the archive. 
The U-boat captains have been taking stupidity pills again. How else can
you explain their voluntarily confirming reports which have appeared
exclusively in this column since last October?Exhibiting smarmy arrogance in defense of leaden incompetence, they give
up information they don't realize further incriminates them.A few weeks ago, somebody sent me a copy of the official minutes of the
UNR faculty senate meeting of January 16. Superannuated UNR President Joe
Crowley "told the senate he wanted to report on the financial affairs of
the university in response to reports recently appearing in some of the
local press. He believes such reports usually don't warrant a response
because they are based on 'rumors, unfounded allegations and half truths,'
but those regarding the UNR Foundation are so without merit that he felt
compelled to report the facts," the minutes state.This sounds curiously like the November 10 letter published in this
newspaper over the signature of local McDonald's mogul Luther Mack. "As
chairman of the University of Nevada, Reno Foundation Board of Trustees, I
am both concerned and offended by Andrew Barbano's Sunday column...littered
with so much misinformation that I find it necessary to respond because
such 'shoddy journalism' harms higher education in Nevada," Mack stated.In dismantling Mr. Mack's criticisms on Nov. 17, I theorized that he did
not write the letter or he would not have fired so many blanks. I recently
identified one of the principal composers, a university PR man named Gregg
Bortolin.Crowley's parallel presentation to the faculty senate shows that either
Bortolin helped him, or Crowley helped Bortolin. Mack's letter asserted
that the UNR "Foundation has never had a $2 million endowment loss." The
faculty senate minutes have Crowley making the same point, "the foundation
has not experienced a $2 million loss."Mary Ellen McMullen, defeated by Howard Rosenberg for university regent
last year, confirmed to me that she had been notified of such a loss in one
of her first meetings as a foundation trustee. I printed that the
foundation's boss, UNR VP Paul Page, told me Mrs. McMullen was mistaken,
that the loss was a mere $200,000 attributable to a rogue money manager
back east. President Crowley contradicts both Dean Page, his appointee, and
Mrs. McMullen."The loss to the UNR Foundation was $235,000 and the UCCSN (University and
Community College System of Nevada) lost $213,000," the Crowley minutes
state. Zounds. The publicly admitted loss has now risen to $448,000. These
guys need to take a meeting to get their stories straight.I reported all of this after the Mackay School of Mines sent over to the
UNR Foundation for about $2 million parked there for construction of a
mines library. They were told only $483,000 remained in their account.But did the state of Nevada dare put the library out to bid when it would
have been illegal to do so without the funds to pay for it? A bid for
$1,496,000 was awarded last August 27. Where did the money go? Was interest
skimmed off?Things got so serious that Crowley and Jarvis went before the board of
regents last December for a $1.3 million loan to bail them out. Only this
column printed the story. The U-Boat commanders were in danger of losing
the better part of $15 million in federal funds if the mines library
construction were delayed. Two federal audits of the fiasco are now
underway and the U.S. Department of Defense inspector general is not a
happy camper.As I exclusively reported December 8, they got the rubberstamp regents
(when they knew crusading dissident Nancy Price would be absent) to approve
the $1.3 million skim from funds paid by students for housing maintenance.
Yet, all concerned contend that no money is missing.All this comes when the university system has been criticized by two major
outside audits for running a financial shell game, spending money on all
sorts of stuff approved by neither legislature nor regents. The two dozen
or so foundations (not even Chancellor Richard Jarvis could tell me he how
many he's got) act as handy money laundries to facilitate such transfers.
Nevada legislative auditors found "expenditures totaling $235 million were
excluded from the budgetary approval process in fiscal years 1995 and
1996."I recently received a solicitation from a local businessman of my
acquaintance. He is raising funds for a project at the U. I sent him a
letter advising him to make sure his check is made out to the UCCSN Board
of Regents, not to any foundation. That's good advice for everyone. These
guys think nothing of shunting dollars to the foundations where donations
are exempt from public scrutiny under an ill-advised state law originally
designed to legitimize defrocked UNLV basketball coach Rollie Massimino's
illegal contract with the UNLV Foundation.In the past, foundation accounts have been used to fund fat bonuses to pet
administrators and new cars every six months for favored deans. Pres.
Crowley's wife even got one. (Call the Nevada Ethics Commission at 687-5469
and ask for Opinion No. 92-17.)Down in Gomorrah South, a $1.5 million estate willed to UNLV was looted.
"After the (UNLV) foundation converted the donation into permanent library
endowments, the value of the windfall was a third less," Las Vegas
Review-Journal reporter John Gallant wrote on June 26, 1992. Among the more
egregious examples were real estate transactions, "some of which involved
people with ties to the foundation. One transaction involved the sale of a
house to an executive of one of then-Foundation Chairwoman Elaine Wynn's
casinos," the Review-Journal reported."The house was appraised at $170,000 and sold to Arthur Nathan, who was
moving from New Jersey to become the Mirage hotel's human resources
director, for $157,500. Wynn is an executive in Mirage Resorts, Inc., and
her husband, Steve Wynn, is the corporation's chairman," Gallant wrote.
"Another sale was handled by a broker who is a longtime friend and business
associate of Foundation Executive Director Lyle Rivera...Madison Graves, a
candidate for university regent this year and a long time friend of
Rivera." (Graves is now chairman of the board of regents.)Crowley's remarks to the faculty senate talk about the university's gold
mine donated years ago by one John Livermore, discoverer of the fabulously
rich Carlin trend in northeastern Nevada. "Originally, the royalties from
the mine were being deposited into a university account, under the
management of finance and administration," according to the minutes. "A
donor, who had ties to the mining company and whose main consideration was
to ensure that the royalties from the mine be allocated to the Mackay
School of Mines, was concerned that the royalties might not be allocated as
intended if they were managed by administration and finance. It was
suggested that the royalties be deposited with the foundation, and Crowley
agreed," the minutes state.Wait. Crowley IS the administration. And last year he told the Las Vegas
Review-Journal that it was his command decision to shunt the money to the
foundation. Who is this shadowy donor now calling the shots?It's illegal to deposit funds payable to the U anywhere else. In the same
decision noted above, the state ethics commission ruled that the
foundations are legally private corporations largely exempt from public
scrutiny--great vehicles for moving money around. Last year, when I asked
for the portions of foundation records mandated by law as public, the
university illegally refused them.The neverending story of university financial finagling continues. More
soon. Keep them cards and letters comin' in.Be well. Raise hell.
©
Andrew Barbano Andrew
Barbano is a Reno-based syndicated columnist and 28-year Nevadan.Barbwire by Barbano
has appeared in the Sparks Tribune since 1988. This column originally published 4/20/97. Reprints
of the UNR financial scandal newsbreaks remain available for the cost
of copying at
Nevada Instant Type in Sparks and both Office Depot Reno locations. |
 |
Copyright © 1982, 1996, 1997, 2006, 2010 Andrew Barbano
Site composed and maintained by Deciding Factors
Comments and suggestions appreciated. Sign up for news and bulletins