'Three Cups' charity expands board in settlement

AP News
Posted: Jul 19, 2012 4:29 PM
'Three Cups' charity expands board in settlement

HELENA, Mont. (AP) — The charity co-founded by Greg Mortenson said Thursday it has added seven new board members, an expansion that is part of a legal settlement over accusations the "Three Cups of Tea" author mismanaged the organization that builds schools in Afghanistan and Pakistan.

The new Central Asia Institute board of directors includes academics, people with business and finance backgrounds, philanthropists and an attorney who are familiar with the region where the institute works. They participated in their first meetings in San Francisco last week after being selected from dozens of people who had submitted letters of interest.

The new members join Mortenson, Abdul Jabbar and Karen McCown, who previously were the sole board members of the Bozeman-based charity.

A Montana attorney general investigation concluded last spring that Mortenson's control of the institute went unchallenged by the board and led to the charity spending millions on Mortenson's books, travel and personal items.

The investigation found a lack of financial accountability in which large amounts of cash sent overseas were never accounted for and itemized expenses were missing supporting documentation.

The settlement with the attorney general's office called for Mortenson to reimburse the charity nearly $1 million, his removal from a position of financial oversight and an expansion of the board.

Jabbar will remain the board chairman, but he and McCown will only stay on the board until next spring, said interim director Anne Beyersdorfer.

Mortenson will stay on the board as a non-voting member, she said.

Mortenson, who flew in from Pakistan to attend the board meetings in California, is still in the U.S. but is unavailable to comment because of an appeal pending in a separate lawsuit, Beyersdorfer said.

The Montana attorney general's office had no immediate comment Thursday.

One of the new board members, Steve Barrett, is a former member of the Montana Board of Regents and a lawyer who lives in Bozeman. He said the changes called for in settlement with the attorney general's office must be accommodated, but he is confident they will be done on or before their scheduled deadlines.

Meanwhile, the board's first priority is to back the organization's mission of building schools and supporting the education of girls in Central Asia, and then work to address its staffing and infrastructure needs, Barrett said.

"It's important for us to remind ourselves that this is an important mission with real people being served, and we need to focus on that," Barrett said.

Mortenson, his books and the Central Asia Institute came under scrutiny last year when reports by "60 Minutes" and author Jon Krakauer alleged that Mortenson fabricated parts of "Three Cups of Tea" and its sequel "Stones Into Schools" and that he benefited financially from the charity.

The attorney general's probe focused only on the charity's finances and operations, and did not examine the books' contents. A federal judge earlier this year dismissed a civil lawsuit filed by people who bought the book and claimed fraud by Mortenson.