Manoa Chancellor Tom Apple was greeted with skepticism and, at times, derision Tuesday by a state Senate panel looking into the University of Hawaii’s handling of the ill-fated Stevie Wonder concert and its fallout.
The five-member Senate Special Committee on Accountability, led by Chairwoman Sen. Donna Mercado Kim (D, Kalihi Valley-Halawa), butted heads with Apple on the reassignment of former athletic director Jim Donovan, the process of hiring a search firm to help select Donovan’s successor, and when the decision was made to not return him to his original job.
The committee, showing its frustration and growing impatience with UH’s responses to requests for information, also came up with its own price tag of $1,135,200 for the botched concert and its nearly three-month aftermath.
A crowd of onlookers spilled into the state Capitol second-floor corridor to take in the second session of hearings, this one a 7 1⁄2-hour marathon. The committee has yet to announce a date for its report and could refer several issues to other committees when the Legislature convenes in January.
Apple spend a grueling hour and 20 minutes Tuesday in front of the committee during which Sen. Ronald Kouchi (D, Kauai-Niihau) said he found Apple’s explanations "hard to swallow."
Apple, former provost at the University of Delaware, succeeded Virginia Hinshaw as chancellor June 24, 16 days before the school announced the cancellation of what was to have been an Aug. 18 benefit concert for the financially strapped athletic department. Apple said he first heard of the concert July 9, "when we had contact from (Wonder’s representatives) Creative Artists Agency, more or less a cease and desist (request)."
About 6,000 tickets had been sold by July 10 when Donovan announced refunds after Wonder’s Beverly Hills, Calif., representatives said they had not authorized the concert.
That same day, Apple announced that Donovan and Stan Sheriff Center manager Rich Sheriff had been placed on indefinite paid administrative leave, pending an investigation of the whereabouts of $200,000 that UH had wired to a Florida bank account as a purported deposit on the event. UH officials now believe they were scammed.
A month later, Sheriff was reinstated while Donovan, whose athletic director contract was to expire March 23, was reassigned to a new, loosely defined marketing role in the Manoa chancellor’s office with a three-year contract paying $211,200 a year after his athletic director contract ended. His title has since been announced as director of external affairs and community relations.
Sheriff and Donovan both told the committee Tuesday that the FBI said they had been cleared of any wrongdoing. Sheriff said: "The FBI told me I had never been under criminal suspicion during this process.
"To me, nobody should have been put on leave."
Donovan said he also wanted to be reinstated and had not been told the school would not be retaining him for the final seven months of his contract. Donovan said his lawyer several times asked UH officials and attorneys about being reinstated, but "they said that was not an option."
Earlier, Apple told the committee, "I did not want to go forward with Jim Donovan as athletic director. Jim is a great guy, and he is a very bright guy and has tremendous talent in marketing. … I felt that Jim was somebody that I wanted on my team. But after talking with a bunch of people, I didn’t think it was in the best interests of the students and coaches for him to continue as athletic director."
Apple insisted that the reassignment of Donovan saved UH money because his new annual salary, $211,000, is lower than what peer institutions would pay for Donovan’s new marketing post, and that the position was going to be filled anyway.
Under questioning by the committee about why UH didn’t let Donovan just finish out his contract, Apple said he decided against it. "I haven’t had a single person from athletics — that doesn’t mean there aren’t any — tell me they want Jim back," he said.
Apple appeared to acknowledge for the first time that the Wonder fiasco played a role in moving Donovan out. "I knew I didn’t want to do that (keep Donovan as athletic director) fairly soon after we heard about the concert being a bust."
In a Aug. 21 email to the UH "ohana," UH President M.R.C. Greenwood said "personnel actions related to the future of the athletic department are not a result of nor derived from the investigation over the concert and the two events should not have become so connected in the way that they have."
The Senate committee on Tuesday also challenged Apple on the need to spend up to $90,000 for a search firm to help find a new athletic director. Apple first maintained that it wouldn’t cost $90,000 and that it was the 11-member search committee’s decision to hire a search firm.
Kim pounced on that, saying, "In our documents we found this (a request for an exemption to hiring practices), and it doesn’t jibe. It seems as though … these kind of things are done in advance and we are given bogus information or inaccurate information."
Kim said the document showed Apple signed it Aug. 15, a week before the Aug. 23 announcement that a search committee had been formed.
Apple said, "My guess is that our processes are so cumbersome and take so long that you want to have — as everyone has demanded — an athletic director in place by the early part of November, so people felt that we’d better get that (started)."
The committee warmed up for Apple with heated questioning of Jeffrey S. Harris, attorney with the law firm Torkildson, Katz, Moore, Hetherington, Harris, which has been retained by the UH administration to help deal with the aftermath of the failed concert.
Kim complained to Harris that UH did not answer the panel’s query for a breakdown of the costs associated with the concert. Kim said that the panel came up with its own estimate, including $75,000 to former state Attorney General Mark Bennett, who was also retained to help UH.
In an email to the Star-Advertiser, Bennett wrote, "The amount I have billed to date has been just under $30,000 ($75,000 is the cap)."
After the Sept. 24 hearing, the committee asked for a breakdown and total of the costs incurred in the failed Wonder concert and its fallout.
Sen. Sam Slom (R, Diamond Head-Hawaii Kai) called Harris’ reply "disingenuous" and scolded him, saying, "Everybody in the room and watching (on TV) understood" what the committee wanted. Slom quipped, "It shows that Shakespeare was right: First we kill the lawyers."
That discussion was followed by a drawn-out, sometimes heated exchange between panel members and Harris on why UH redacted names from the external investigation by Cades Schutte on the canceled concert. Harris insisted that UH redacted names because of privacy issues, while senators countered that the redactions violated state open-government laws.
Harris, growing frustrated with the questioning, challenged the committee to make public the unredacted report, saying, "So why don’t you release ’em?"
Kim answered that the group was advised by UH to keep the unredacted report confidential and now wants to know UH’s legal basis for the redactions.
Sheriff told the panel the concert idea first came about when he was approached about the prospect by local promoter Bob Peyton, who "told me as an alum and a fan of athletics that he wanted to do something good."
Kim said Peyton was asked to appear and said the committee had been advised that he is hospitalized.
Kim asked Sheriff, "How many drafts (of the contract) did the attorneys make before they came up with the final draft?" Sheriff replied, "Seven."
Kim said, "So we had seven opportunities (to cancel the concert)?"
UH SPENDING
The Senate Special Committee on Accountability released more than 350 pages of supporting documents and the University of Hawaii’s response to the committee’s questions about spending at UH. Among the highlights:
Legal services:
>> Former state Attorney General Mark Bennett is being paid $75,000 from the university’s Risk Management Special Fund to provide legals services in the aftermath of the failed Stevie Wonder concert. Among his duties are negotiating the settlement and the new employment agreement with former athletic director Jim Dono van.
>> Bennett’s firm, Starn O’Toole Marcus & Fisher, has received nine contracts totaling $435,000 to provide legal services since January 2011.
>> UH has 29 active contracts with local law firms for legal services not to exceed $7.283 million. Some of the contracts extend through several years dating back to 2008. The largest contract, for up to $2.95 million, is with Carlsmith Ball LLP for legal services for the Mauna Kea Science Reserve, where UH and other research institutions have telescopes.
>> The University Office of General Counsel has eight staff attorneys and five support staff. Its budget for this fiscal year is $1.2 million.
>> Since Sept. 1, 2006, the amount spent for legal services is about $6 million. The cost for legal services between April 2011 to March 2012 is $2.2 million.
Public relations:
>> The University of Hawaii at Manoa employs 10 people and two secretaries for public relations support at a total annual cost of about $1.185 million.
>> The UH system and UH-West Oahu also have about $750,000 in outside contracts for advertising, marketing, video production and branding services.
>> UH President M.R.C. Greenwood has also retained public relations company Hoa kea Communications under a contract through the Research Corporation of the University of Hawaii of up to $25,000 to provide strategic communications on the Pacific Health Research Lab at Kalaeloa, the Thirty-Meter Telescope Project on Mauna Kea, the Advanced Technology Solar Telescope on Hale akala and other projects that may become the subject of publicity or community discussion.
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Star-Advertiser reporter Mary Vorsino contributed to this report.
