For years, a company owned by the managing director of CU-Denver’s Institute for International Business pocketed money that rightfully should have gone to the university, according to school auditors.
In a report on the activities of Donald Stevens, auditors said that the Economic Club of Colorado – a club founded by Stevens – signed a contract in 1986 for the club to rent office space and purchase support services from the university.
Stevens resigned from the university job, which paid $184,420, in late May.
The Economic Club of Colorado was designed to bring world and national leaders in business and government to Colorado.
From 1986 to 1991, the club paid the University of Colorado at Denver $220,465 for the services.
But in 1992, Stevens formed a company, Global Education Inc., or GEI. The same year, the club’s contract with the university was terminated and a new contract was written that said the services the club had been buying from the university would now be provided by Stevens’ new company.
From 1992 to May 2006, the auditors said, Stevens used university staff from the Institute for International Business to provide the services to the economic club under GEI’s contract. Its address was 1380 Lawrence St., Suite 1150, which is the same university address for both the Institute for International Business and the Economic Club of Colorado.
The auditors said the university did not receive payments for the space or services that both the economic club and GEI were getting from the university from 1992 to 2006.
Instead, Stevens had the club pay GEI. Tax returns for the not-for-profit Economic Club of Colorado show that the dues- supported club paid GEI $80,000 per year in 2003, 2004 and 2005. The 2005 return states that Stevens owned 52 percent of the for-profit company, now called Global Education LLC.
he “one-sixth” rule
When he resigned in May, Stevens paid $256,595 to the university. The university calculated that amount based on the amount of time staffers for the Institute for International Business estimated they spent on economic club projects over the years. University auditors figured it was the “minimum” amount Stevens owed.
Stevens also repaid the university $11,925 for four overseas trips that he billed to the institute which the auditors determined were, in part, personal in nature.
Neither Stevens nor his wife, former Colorado treasurer and Lt. Gov. Gail Schoettler, returned calls for comment. Schoettler, a Denver Post op-ed columnist, recently informed the paper that she would be in China.
Saskia Jordan, the lawyer who represents Stevens, said Stevens has done nothing wrong. Jordan said that in 1992, the then-vice- chancellor of the university’s Office of Academic Affairs gave Stevens permission to use university time to conduct private business under what is called the “one-sixth rule.” That rule allows faculty members to spend that amount of time on outside consulting.
Auditors, however, argue that the one-sixth rule doesn’t necessarily apply to using university resources and staff on that consulting work.
Jordan also argued, and the university agreed, that Stevens’ economic club had been a boon to the university, producing “over $1.5 million in donations from (club) members to the University/University Foundation and in the University’s receipt of over $5 million in federal grants,” according to a statement provided to the auditors by Stevens’ lawyers.
Family flew on CU dime
University records show that Schoettler accompanied Stevens on the four trips where auditors questioned some of the expenses.
The trips were to Finland and Norway in 2003; Estonia, Latvia and Sweden in 2004; Ireland and Iceland in 2001; and Belize in 2005.
In addition, an audit of the Institute for International Business found that Stevens’ family members participated in faculty development and/or business delegation trips.
One of those family members participated in a total of six trips, one each in 2000 and 2005 and two each year in 2004 and 2006. The other family member participated in one trip in 2000, auditors said.
Expenses covered for family members on the trips totaled $19,619, the auditors said.
The auditors noted that:
On one trip, a family member was not charged the program fee charged to other participants.
On another, the family member was not charged for the program fee or the overseas airfare, while all other participants paid the fee and their airfare.
In other instances, the university paid a portion or all the travel expenses for family members, including meals, in-country travel and other services.
Stevens, who retired May 31, defended the practice of taking family members, arguing that they provided services to the university.
He said that one family member shared in program design, participant recruiting, meeting and speaker arrangements and day-to-day leadership duties and other aspects of the business delegation.
However, the auditors noted that a “scope of work” form was not on file. The document must be filled out and approved by Human Resources when services are provided by individuals.
The auditors said it was unclear to them what services were provided after they reviewed documents related to the trips.
“Documentation is incomplete to support the propriety of the family members’ expenses,” the auditors wrote. The audit said that there was also an apparent conflict of interest, because Stevens authorized the travel for the family members.
Staff writer Howard Pankratz can be reached at 303-954-1939 or hpankratz@denverpost.com.
