Posted on November 28, 2003

Journal-Constitution Questions University of Georgia Foundation Dealings With Trustees

An inquiry into the business dealings of the University of Georgia Foundation, a nonprofit that raises money for the Athens-based school, reveals that about half its fifty-five trustees are affiliated with companies that have worked for the foundation or the university, the Atlanta Journal-Constitution reports.

The Journal-Constitution reviewed foundation records dating back to July 2000 and found that the organization has paid more than $30 million to trustees' companies for legal work, banking, and other services. The investigation comes on the heels of an audit commissioned by the foundation to look into the spending of university president Michael Adams. The audit alleged that Adams used donors' money for personal expenses, misled fundraisers, and misappropriated university funds, prompting some trustees to call for his ouster. In addition to reviewing Adams' spending, the auditors' report pointed out problems in the foundation's management. A lawyer for the foundation said it has been careful to avoid improprieties over the years but acknowledged that it operated rather informally before the Adams audit.

State and federal laws require nonprofit directors to disclose potential conflicts of interest and abstain from voting on matters that might benefit them or their family members. Foundation trustees have not made any such disclosures since 2000, and the foundation has frequently hired trustees' firms without reviewing proposals from other companies. As a public agency, the university must seek bids for most of its business contracts, and Georgia Attorney General Thurbert Baker says the foundation may also be subject to those procedures. "The foundation exists only for the benefit of the University of Georgia, and it is a substantial vehicle through which the university carries out its fundraising functions," Baker wrote in a letter to foundation lawyers. "I would strongly encourage you to find ways to make your activities as transparent as possible."