Group clashes with ASU Foundation about spending, hiring of Crow's wife

 by Daniel Newhauser
 published on Wednesday, March 26, 2008

Deanna Dent / THE STATE PRESS

SPEAKING OUT: Sara Myklebust, a research analyst with the Coalition for Justice at Great Western Erectors speaks to the media about issues concerning pay rates for Foundation employees, as well as the way funds are allocated.

ASU's fundraising organization was the target of criticism the past two days from an activist group citing financial improprieties, but ASU officials said the allegations are bogus.

The Coalition for Justice at Great Western Erectors — a group composed of workers, community members and ASU students — said in a press conference Tuesday that the ASU Foundation spent too much money on overhead expenses and not enough on students.

According to a report circulated at a coalition press conference, millions of dollars that were donated to the foundation were spent on meals, entertainment, gifts, trophies and flowers.

"I don't see how you can justify spending all this money on certain employees and certain events and flowers," said Sara Myklebust, ASU alumna and research analyst for the coalition.

She said that the foundation's expenditures were not consistent with its stated mission to advance ASU and supply financial aid to ASU students.

"It makes me wonder whether or not that money is actually going to scholarships," she added.

But the foundation's president and CEO, Johnnie Ray, said that the allegedly exorbitant expenses, such as fees paid to asset managers, meal and gift expenses, along with salaries of top foundation employees, are normal operating expenses.

The growth of ASU Foundation's has resulted in increased spending to attract potential donors and hire more staff.

The payoff, he added, is evidenced by ASU's endowments growth —more than 50 percent since 2003.

Ray said a lot of the other information in the report was taken out of context.

He said an invoice in the report that appears to bill ASU for the foundation's services was fabricated.

And Judy Van Gorden, the foundation's chief financial officer, said the report misidentified the amount of foundation money allocated to ASU from 2005-06 as $32.5 million when the actual number was $47.7 million.

She added that overhead expenses were miscalculated as 56 percent of total expenses, when they were actually 20 percent, she said.

Myklebust said her report is accurate. She said she compiled the report from the foundation's IRS form 990, a standard tax document filed by nonprofit organizations to obtain tax-exempt status.

"I do not feel I misrepresented any information," she said.

The report also called into question the hiring of ASU President Michael Crow's wife at a six-figure salary, but Crow said his wife, Sybil Francis, is qualified for her job.

Francis has a Ph.D. from the Massachusetts Institute of Technology and has taught at Harvard University.

"She took a position here when I took a position here," Crow said.

Her salary of $160,000 is not uncommon for the amount of work she puts in, which included helping to raise more than $50 million for the foundation in the last few months, Ray said.

He added that he thinks the coalition has an ulterior motive. He said the report is meant to discredit the foundation and call attention to the coalition's efforts to unionize GWE employees.

"They have an axe to grind with ASU and the ASU Foundation," he said.
GWE, a Dallas-based construction firm, was subcontracted to work on ASU's SkySong and other facilities in 2005. The coalition has held several protests on campus, claiming GWE employees were mistreated while working on University job sites.

But Myklebust said the coalition deals with a broader range of issues than worker mistreatment.

The report could now lead to legal repercussions, Ray said.

Reach the reporter at: daniel.newhauser@asu.edu.