Frostburg president put scholarship gift into own fund

November 03, 1990|By Patricia Meisol | Patricia Meisol,Sun Staff Correspondent

FROSTBURG -- The president of Frostburg State University ordered subordinates to put a gift intended to provide scholarships into his own discretionary foundation account without the approval or knowledge of the fund's directors, a foundation official said yesterday.

The $10,000 gift, from the estate of Grace S. Kopp, a teacher and the wife of a longtime Allegany County superintendent of schools, was to be used for scholarships for Allegany students intending to become teachers, said C. William Gilchrist, a lawyer and foundation member. Mrs. Kopp died in 1986.

When the foundation directors learned of the donor's wishes from an auditor in 1988, they conducted their own investigation, then froze what remained of the account and transferred it to a scholarship in Mrs. Kopp's name.

The use of the gift without foundation approval was disclosed in yesterday's Cumberland Times-News. In an interview yesterday, Frostburg President Herb F. Reinhard denied knowing the donor's original intent and said the money was moved only upon legal advice.

He also said Michael A. Noonan, then his chief assistant, and Rene Atkinson, then acting director of the university's foundation, had urged him to deposit the money into the presidential account.

"Bullfeathers," Mr. Noonan replied yesterday, when asked if he had suggested putting the funds into the presidential account.

Mr. Noonan, a Cumberland attorney who served as Dr. Reinhard's assistant from 1983 until he quit in 1988, said the president was well-aware of the donor's intent. The attorney said Dr. Reinhard reviewed "every piece of mail addressed to him," including the original letter from the estate's representative describing the gift and a complicated set of related legal questions.

According to the will, Mrs. Kopp wanted her gift to be used "as scholarship aid for elementary teacher education students, who are residents of Allegany County, Md., and have demonstrated ability and financial need." A copy of the will was sent to Dr. Reinhard with a letter from the estate's lawyer on March 3, 1987.

Mr. Gilchrist, the foundation member, also sharply questioned whether Mr. Atkinson would have urged that the $10,000 be transferred to the president's account. Mr. Atkinson was unavailable for comment yesterday.

The gift was complicated: In her will, Mrs. Kopp left shares of stock to be divided equally between Frostburg and Gettysburg College in Pennsylvania, but she had sold the stock by the time she died. In a compromise, her heirs gave $10,000, or about half the value of the stock at the time, to each institution.

And although university officials sought an opinion from an assistant attorney general and permission from the estate's personal representative to use the money for any purpose, Mr. Gilchrist and other foundation members nevertheless object.

"Even if there was no legal obligation, in view of the facts and Mrs. Kopp's longtime interest in education, it was morally indefensible," said Mr. Gilchrist, 75, who has practiced estate and probate law in Allegany County for 50 years.

At least $1,240 from the president's account under the university's tax-exempt foundation was used to purchase tickets to political events since 1987, The Sun has previously reported. Part of the $10,000 gift was used to set up discretionary accounts for other university officials.

Meanwhile yesterday, Frostburg State officials told The Sun that the president has had a second discretionary account carrying $75,000 in each of the last three years.

This account -- funded by state tax dollars and student tuition, unlike the foundation account that held money raised from private sources -- was used to purchase a $15,333 car for the president. The account

also was used to buy $11,690 worth of reprints from Money magazine's "America's Best College Buys," which last month included Frostburg among the best schools for the money, according to interviews with university officials and documents reviewed by The Sun.

The account, which campus officials said is a regular line item in the university's budget, apparently is the largest of its kind on any public campus in the state, according to a list provided by University of Maryland central administration officials

and a spot-check of university presidents this week.

The presidents of Towson and Salisbury State have $8,000 and $10,000 accounts respectively from state money, and representatives of those schools said it is spent on faculty projects, presidential travel or for entertaining fund-raisers.

Dr. Reinhard said yesterday that he used his account for academic equipment, gifts, receptions and band instruments. In previous years, it also has been used to buy a 25-passenger van to carry Frostburg students and faculty to events, including a Christmas party at the president's house. Dr. Reinhard said $25,000 of this year's fund is being returned because of university budget cuts.

The university's vice president for administrative services, Richard S. Metz, said yesterday that $15,221 from the account had been used for entertainment in the year ending June 30. The prior year, the president spent $22,286.81 from the account for entertaining.

Mr. Gilchrist said he was "shocked" to learn of a separate $75,000 presidential discretionary account in the university budget.

He said the foundation had reluctantly approved the other special account for Dr. Reinhard, which totaled $18,779 since 1987, after the president argued that he had no discretionary funds with which to help faculty members who came to him with travel and conference requests.

Mr. Gilchrist said the foundation intended for the money to be used for academic and university-related events.

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