Controversy swirls
over Dobelle’s spendingRecords show delays in sorting
out business and personal accounts
University of Hawaii President Evan Dobelle submitted $26,000 in personal charges as business expenses to be paid by his protocol fund at the UH Foundation, according to an auditor's draft report.
The charges were later reclassified as personal, and Dobelle reimbursed the foundation. In total the foundation paid $46,499 of Dobelle's personal charges -- which he has since reimbursed -- from the time he was hired in July 2001 until February of this year, according to the report.
But the report also shows it took more than two years to repay some personal charges to the nonprofit foundation, which set up the protocol fund for the UH president and his staff to use to advance the university.
Dobelle, who was fired by the Board of Regents on June 15, said there is no question that the record-keeping and accounting on his protocol fund was "messy," but, he said, "nobody intended to do anything wrong."
In fact, Dobelle said his personal assistant, Kristen Blanchfield, discovered "90 percent" of the mistakes.
Reconciling which expenses were personal and which were business continued into last month for charges dating back to Dobelle's first month in office, the report shows.
Dobelle repaid about $4,500 in May for expenses dating back from July 2001 to August 2002 that were originally classified as business expenses and reclassified as personal, and another $4,667 in March for other expenses from August 2002 through last November.
UH regents have cited the Deloitte & Touche audit as a factor in why Dobelle was fired "for cause." However, they have not given the exact reasons for his firing.
The report raises questions about how the $200,000-a-year discretionary fund was managed by both the president's office and the foundation, but it does not comment on any possible "cause" for dismissal.
Dobelle's contract allows him to be fired at any time without cause, but the university must pay him a $2.26 million severance unless he is fired "for cause." His contract outlines cause as a felony conviction, mental instability or conduct that brings public disrespect and contempt or ridicule upon the university and would constitute grounds for criminal conviction or civil liability.
Dobelle said he does not think anything in the audit rises to the level of "cause."
The report obtained by the Star-Bulletin is a draft and does not include any changes that may have been incorporated into the final audit report. Among the items auditors questioned were:
>> $71,664 in payments to Dobelle made with inadequate receipts and supporting documents to indicate the benefit to the university.Earlier this month, UH Foundation Chief Financial Officer Bill King, who has seen the draft report, said there did not appear to be any inappropriate spending. He said Dobelle had been prompt about repaying personal items when asked.>> A $45,000 payment to the Cambridge, Mass.-based Opinion Dynamics Corp. for a survey in January 2003 regarding issues concerning UH. The payment was part of a nonbid contract, and auditors said they could not get a copy of the completed survey.
>> A $10,000 payment to Betsy Sloane, before she was hired as UH Foundation president, for an oral report reviewing the foundation's development plans.
He explained that, in the past, the foundation accepted Dobelle's credit card statement as being sufficient documentation rather than requiring individual receipts. The president's office would then submit a spreadsheet outlining whether the charges were business or personal and the justification for the business charges.
Dobelle said receipts would have been available to the auditors from First Hawaiian Bank, the company that issued his credit card. "They never asked for them," he said.
Foundation polices have since been changed to require receipts, King said.
When called earlier this week for further comment, King and the foundation referred questions about the audit to UH spokeswoman Carolyn Tanaka, who referred the calls to Barry Marr, a private attorney hired by the board. Marr could not be reached for comment.
Dobelle said yesterday that the survey was turned over to auditors and should be part of the final audit. He said Opinion Dynamics Corp. did several surveys for the university, and company President John Gorman presented the findings to the UH Foundation Board and to the Board of Regents. He said he does not know why auditors could not get a copy of the marketing survey.
Dobelle said he has known Gorman for years, but Opinion Dynamics received the nonbid contract based on the company's national reputation -- not because of their relationship.
He also said Betsy Sloane gave her report to Dobelle orally because it came at a sensitive time and that was what the foundation wanted.
"Nobody wanted it in writing, and I didn't want it in writing," Dobelle said.
Many of the problems with the accounting and reimbursements from the fund stem from an unusual arrangement in which the foundation paid Dobelle's personal credit card bill and then determined after the fact which charges were business-related and which were personal. The foundation paid Dobelle's entire bill in October 2001 and from February 2002 through February 2003.
Since February 2003 the foundation has paid the business portion of Dobelle's credit card bill, and Dobelle pays his personal portion.
Dobelle said it was not his idea to have the foundation pay his entire credit card bill. He said his staff handled the travel paperwork after a trip.
If there were questions, King and Blanchfield would go back and figure out the details.
He said the process works both ways and that he has received checks from the foundation for business expenses that were overlooked.
Dobelle said as far as he is aware, he has paid what he owes to the foundation. "The only person who is owed any money is me," he said, citing parking and other receipts that he never submitted.
The report also shows spending from the protocol fund increased significantly during Dobelle's first year in office when compared with former president Kenneth Mortimer. In his last year in office in 2001, Mortimer spent $100,797, while Dobelle spent $268,526 in 2002.
In last year's evaluation of the president, regents criticized Dobelle for his "lavish spending" on travel.
Travel is the largest component of his spending from the fund. Since he started at UH through the end of February, Dobelle spent $271,186 on travel. The university paid $82,942 and the foundation's share was $188,244.
The audit noted that from the time he was hired on July 1, 2001, until last Feb. 29, Dobelle was on the road for 341 days. He took 32 out-of-state trips and 25 interisland trips, the report said.
Dobelle said his travel is necessary for fund raising and to bolster alumni support.
"The increase was because I was a new president," he said. "The point was to get up and out and get the alumni going."
He said alumni giving to the foundation has increased significantly since he became president.
The report said that the foundation has an authorization from the university to pay for first-class travel for Dobelle. The university pays the coach fare, and the foundation covers the cost of the upgrade.
But the draft faults Dobelle for not complying with university policies that require at least a seven-day advance purchase to get the best fares.
Dobelle bought his airline tickets less than seven days in advance in 28 of the 32 mainland trips he took on university business. Dobelle said he should have been better about buying tickets earlier. However, he said, "there are times when my schedule just changes."
The report also flags $38,174 in first-class and business-class airline upgrades that he paid for staff traveling with him as "disallowed and questionable."
Foundation policy states that additional costs resulting from upgrades must be paid by the traveler. He also paid for upgrades for two consultants and people he was trying to recruit to the university.
"I don't see anything wrong with it," Dobelle said. "Upgrades for the staff are something that no one challenged me on, and I thought it was absolutely necessary."
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Tripping up on expenses
The Deloitte & Touche report does not go into detail about the $26,000 in personal charges that Evan Dobelle originally submitted as business expenses, but it does give these examples:>> During a 2002 trip to San Francisco, the foundation paid for two hotel rooms at the Park Hyatt on Aug. 15 and 18. The cost was charged as a business expense. The expenses were reclassified as personal. Dobelle repaid the foundation $506 last month.
>> The foundation paid for the hotel room of Dobelle's son at a cost of $753 on May 17, 2002. There was a notation that Dobelle would reimburse the charge, but the expense was coded as business and was not repaid until last month.
>> Boutique, spa, tour services and a movie charge totaling $128 on various hotel folios from 2002 were not reclassified as personal expenses until last August.
>> Three hotel charges were submitted for days that Dobelle took as personal rather than business. Two of the charges were reclassified, and Dobelle repaid the foundation $279.
Dobelle said the charges are just an "oversight."
He said the extra hotel room in San Francisco was for his son Harry. "They missed it on the hotel bill," he said. "As soon as I saw it, I paid it (back to the foundation)."
The auditor's report cited the reclassification as an indication of "a less than thorough initial review of charges."
Dobelle's attorney, Rick Fried, characterized most of what the auditors found as "manini."
The protocol fund
The University of Hawaii Foundation, a nonprofit fund-raising organization, sets aside $200,000 annually from operating expenses to provide a fund for the UH president and his staff to use for expenses that advance the university. The money comes from interest on investments, fees and other operating money, but donor funds are not used, unless a donor specifically designates it for the UH president. The president has wide discretion over how he uses the fund, but it is not a personal fund; it must be used for university purposes.
