'The top two directors of Florida International University's online course department have resigned while the school investigates a private company they started that was charging hundreds of students $60 each to buy required electronic textbooks.

The men were drawing six-figure salaries from FIU, while controlling a business that benefited from links with three FIU online courses.


... FIU began its investigation, which it expects to complete in the next two weeks, after a detailed Feb. 28 complaint made by a whistle-blower who works in the online department.

Marcos Perez, FIU executive vice president, said school administrators were unaware of the apparent conflict before then.

But a Sept. 26 e-mail from Izadpanah to his supervisor lays out his plan to start a private business that would create online content for professors at FIU and other schools. His note said his company "would be treated the same" as other publishers who do business with faculty.

"I feel confident that as long as we keep it low key that everything should be approved just fine," Izadpanah wrote in the e-mail to business school dean Joyce Elam. "Hence, as long as someone doesn't go poking around, we should be just fine."

Elam did not return five phone messages left at her office since Friday. Perez said he cannot speculate why the e-mail did not raise a red flag. He said Elam, a well-respected dean, trusted Izadpanah when he signed an "outside activity" form that listed his second job as "consultant" and certified that his private work did not present a conflict of interest with his FIU activities.

Online education is one of the fastest-growing areas at FIU, expanding from a handful of classes offered in 2000, when the program began, to 200 this year. Though FIU is a public university, the online department is run like a business, under the authority of business school dean Elam, with five-figure bonuses granted to employees who meet revenue goals. Students enrolled in online classes pay $299 online support fees that nearly double their tuition, even though the courses require no classroom space. FIU generated $11 million from the fees this year.

Izadpanah resigned effective this week. In less than six years at FIU, his income rose from $45,000 to $169,000 -- through promotions and a 10 percent lump-sum bonus he earned in November after the online department reached a $2 million revenue goal for the business school.

Morejon resigned as associate director of FIU online effective April 13. He was hired in 2003 at $45,000 a year. He made $107,000 last year, including a 10 percent bonus.

FIU Online employees work with professors to convert curriculum into online classes and electronic textbooks. This semester, FIU Online began routing more than 900 students enrolled in a music appreciation class, a finance class and a communications class to a website run by a company called HigherL that registered students for a required online textbook at a cost of $60.

Previously, FIU produced the electronic textbooks internally. In December, Izadpanah wrote in an e-mail to several FIU Online employees that the department would begin outsourcing the electronic textbooks and focus more of its efforts on growth.

Perez said FIU lawyers believe the school, not HigherL, owns the rights to the electronic textbooks.

Morejon is listed on corporate documents as HigherL's only manager. But in e-mail exchanges with Elam, Izadpanah did not dispute having control of the company. Perez said FIU believes both men have a financial interest in HigherL, but an April 3 e-mail from Elam indicates Izadpanah had left the company by then.


... Perez said: "The most important discovery for us is that somebody that had an active [business] interest ... was doing business with the university. That's a clear conflict of interest."

Before Izadpanah submitted his resignation, FIU's audit department received a complaint that he questioned employees in an effort to find out who lodged the complaint against him and Morejon. Izadpanah wrote in an April 5 e-mail that his comments were misconstrued...'