SPECIAL REPORT:
MONEY AND THE UH ATHLETIC DEPARTMENT
The Money Game
Records detail nearly $50,000 spent
By Ian Lind
on gifts and entertainment last year
Star-BulletinThe University of Hawaii athletic department spent tens of thousands of dollars last year on entertainment and gifts, golf fees, meals and liquor while coaches and their teams were hit by big budget cuts.
Jim Donovan:
"...no sleight of hand."Money from sponsors and booster clubs was deposited in 39 special accounts at the UH Foundation, where it could be spent without restrictions that normally apply to state agencies. Miscellaneous expenditures from these accounts amounted to $1 million during the year ending June 30, 1996, according to a financial summary presented to the Board of Regents.
University records show that Associate Athletic Director Jim Donovan, with day-to-day control over all UH athletic facilities and its $12 million annual budget, spent nearly $50,000 from one account last year on expenses that included:
Meals and entertainment at Gordon Biersch, Hooters, Moose McGillycuddy's and other spots.
Donovan denies any wrongdoing, although he acknowledges that some people may disagree with his spending decisions.
"Nothing was done under the table, and there was no sleight of hand," Donovan said.
By Craig T. Kojima, Star-Bulletin
A sign points the way to coaches' offices at the Special Events Arena.
Associate Athletic Director Jim Donovan says some coaches
don't understand the business side of sports.
Donovan and his boss, athletic Director Hugh Yoshida, say the expenditures have been reviewed and are legitimate. They say critics don't understand the business side of sports, which requires the cultivation of potential sponsors and supporters. That, they say, means spending money on things that are typically off-limits for public employees using public funds.Yoshida controls a similar but smaller account.
Overall, the department has 39 separate accounts on its behalf at the UH Foundation.
But the athletic department expenditures are far greater than those of other university administrators. For example, Jim Manke, interim vice president for university relations, said only $16 was spent last year from a similar discretionary account controlled by his office, and none was spent this year. The account now has a balance of $55.
Donovan's expenditures came to light in an anonymous letter sent to news media in October 1996 from a fax machine on the third floor of the athletic department, an area used by coaches. 'Some very upset people'
Donovan says the attack stems from his role in imposing $1 million in budget restrictions over two years.
"There are some very upset people here whose programs have been cut, and I'm the guy who has to say 'no' to them," Donovan said.
Donovan's special account is funded by corporate sponsorship fees for the annual Rainbow Classic basketball tournament and Easter baseball tournament, which currently bring a total of $177,000 annually.
Unlike income from ticket sales and other sources, the fees go into Donovan's special account and are not considered part of the official athletic budget.
The majority of the sponsorship money goes right back into tournament-related expenses, Donovan said, but the remainder -- about $50,000 a year -- is used for marketing and cultivation of support.
Donovan said he has been confronted repeatedly by head basketball coach Riley Wallace, who believes the fees should go to the basketball program.
The problem, Donovan says, is that Wallace and other coaches don't see the hidden costs of putting on a top-notch event. Hidden costs cited
"He (Wallace) doesn't see the bills coming across for the hospitality room, for memorabilia, or for gifts like the televisions (given to coaches)," Donovan said. "He gets a television, he gets passes to give away to people to eat the food, he just doesn't see the bills."
Donovan defended golf and entertainment as "cultivation," an essential form of marketing.
Star-Bulletin
Mike Wilton: "There's an unbelievable incidence
of people who start working here as students
and get promoted to real responsible positions.
My comparison is the royal families of Europe
where after years of inbreeding, you
start producing imbeciles."
"If you get to meet people and start a relationship with them, it can ultimately turn into something like the Outrigger Rainbow Classic," he said."I wined and dined, and bought lunch, and gave free tickets to the Outrigger Hotels people for seven years before they signed up for the Rainbow Classic.
"But when they did, it was for $100,000 a year.
"It's a long, ongoing thing, and you have to have some kind of logic behind it," Donovan said.
One regular beneficiary of Donovan's spending for golf and meals was Roger Reeves, manager of Marriott's food service concession for the Special Events Arena and athletic complex, expenditure records show.
Donovan and Reeves could have met at the university, but Donovan said the outings were a way to thank Reeves for providing services at lower prices than would otherwise be available.
"It's about building relationships," Donovan said. "If the person likes you, you get good deals. If the person doesn't like you, you get regular deals."
Donovan estimated he gave Reeves $2,600 worth of tickets and golf during the year, but got at least three times that amount in discounts for the department.
Athletic bosses between
By Ian Lind
a rock and a hard place
Star-BulletinAthletic administrators feel squeezed by impending budget cuts and legal restrictions limiting their ability to act effectively in the world of private business. Money is the immediate worry. "It's like you've got your home mortgage, a student loan and a car loan, and then the three banks call you at the same time for payment," said Jim Donovan, associate athletic director at the University of Hawaii.
As a result of the overall budget problems, many in the department, from the athletic director down, see themselves as underpaid, overworked and deserving of any additional benefits that can be wrung from the system.
It's an attitude that discourages strict adherence to state rules.
UH Athletic Director Hugh Yoshida compares his pay and benefits to those of local corporate executives and comes up short.
Donovan complains that he was put on the lowest salary rung following his promotion to associate athletic director. And coaches, constantly aware that their counterparts on the mainland are higher paid, demand other benefits to at least partially compensate for the shortfall.
Donovan and Yoshida both believe they can successfully cope with the problems, but say they need more flexibility to get the job done.
They say athletic programs should have more freedom because they already endure more public scrutiny, face higher public expectations and get less government funding than other parts of the university.
"We're told we have to act like a private entity, but we're trying to do it in a government environment where everybody else just gets their troughs filled up," Donovan said.
The Legislature responded this year by exempting athletic department purchases of goods and services from requirements of the state procurement code. But staff compensation, contracting, financial administration and facilities management are all areas where athletic officials would like additional flexibility.
Men's volleyball coach Mike Wilton blames favoritism and insider hiring for the department's problems in marketing and promotion.
"There's an unbelievable incidence of people who start working here as students and get promoted to real responsible positions. My comparison is the royal families of Europe, where after years in inbreeding, you start producing imbeciles.
"As long as you're a good soldier, and not a wave maker, they're going to keep you around," Wilton said.
A key faculty committee has also questioned whether it is wise to treat intercollegiate athletics as a business instead of as part of the University of Hawaii's educational enterprise.
The Faculty Senate Committee on Athletics wrote UH President Kenneth P. Mortimer in December 1996, asking him to reconsider his 1995 decision to require athletics to be financially independent. If athletics is part of the educational mission of the campus, then it is legitimate to use public funds to support it, the committee said.
It urged Mortimer to restore about $600,000 to the athletic budget to reduce pressures on the department.
"Also at issue is the principle of 'institutional control' of (university) athletics," the letter said.
The committee said a self-sufficient athletic department would have a greater degree of autonomy, a shift that would run counter to NCAA-backed reforms adopted by the university last year.
Professor Peter Nicholson, committee chairman, said Mortimer has never responded and the recommendation is still in place.
Mortimer was not available for comment.
