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Sunday, July 08, 2007

The Larger the Land Cruiser,
The More Scope for Cultural Understanding

Universities are optimally configured for serious conflicts of interest when they appoint faculty to their business schools (or related profit-oriented departments and institutes) with strong family feeling plus expensive tastes. These are usually guys who insist on the best of everything for their wives and children, and who feel that the university should pay.

University auditors have questioned why on six overseas trips, CU-Denver paid all or a portion of the travel expenses of Gail Schoettler, the state's former lieutenant governor and treasurer.

Schoettler is married to Donald Stevens, who, at the time of the trips, was managing director of CU-Denver's Institute for International Business.

Stevens retired May 31, after he and a company he founded agreed to pay the university $268,520 to settle various allegations, including questions about his travel expenses. [For once, UD would like to see quotation marks. They'd go around the word "retired."]

Since the late 1980s, Schoettler and Stevens have taken numerous overseas trips together, according to thousands of pages of university travel documents.

The auditors specifically questioned Schoettler's travel with Stevens on four trips to China, and one trip each to India and Eastern Europe.

They also questioned similar payments for Stevens' son, Jeffrey, on one of the trips to China.

The trips were sponsored by CU-Denver's Institute for International Business. "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," the auditors reported. "In other instances, the university paid a portion or all the travel expenses for the family members, including meals, in-country travel and other services. Expenses covered for the family members on the trips totaled $19,619.20."

...The auditors said that there was an apparent conflict of interest because Stevens authorized the travel for his wife and son without approval from higher levels of the school's administration. They also said no "scope of work" forms were filled out for Schoettler or Jeffrey Stevens and approved by the school's human-resources department, as required.

...Stevens had failed to properly document some of his trips; used some university funds on personal vacations and to pay his family's way; and used university services to operate a private company he owned.

When Stevens resigned his $184,420-a-year CU post, he and his private company repaid the university more than $256,000 and almost $12,000 for travel the university ruled was not work-related. The university did not seek repayment for Schoettler's or Jeffrey Stevens' expenses.

One of the trips that caught the attention of the auditors was to India. The auditors said the trip was scheduled for 16 days but auditors noted that 12 days of the trip consisted of activities such as safaris, elephant rides and tours.

Stevens has maintained that such trips, although they appear to be nonbusiness in nature, are critical to understanding the culture of the country and how business is conducted.

In making arrangements for the India trip, Stevens stressed that he wanted first-class train accommodations, the largest Volvo motor coach and Land Cruisers rather than flatbed trucks on one of the safaris.