Three Cups of Tea author agrees to repay his charity $1 million
Mortenson will resign from board; work will go on
An American author nominated for a Nobel Peace Prize for his work building schools in Afghanistan and Pakistan has agreed to repay $1 million to his charity after a probe into financial misdealings.
Greg Mortenson, who wrote the bestselling book Three Cups of Tea about his work, has also agreed to resign from his charity’s board for “financial transgressions” in a settlement reached with the Montana attorney general.
A year-long investigation by the attorney general’s office found Mortenson had mismanaged his Central Asia Institute (CAI), with millions of dollars of donations spent on charter flights, family vacations and personal items.
The probe by Montana Attorney General Steve Bullock followed an expose last year alleging that some of the most dramatic episodes in Mortenson’s bestselling memoir and its popular sequel, Stones into Schools, were fabricated and largely served as a conduit to selfenrichment.
In Three Cups of Tea, which has sold more than four million copies since its 2006 publication, Mortenson tells the stirring story of how he was rescued and nursed to health in a remote Pakistani village after a failed climb in 1993 of K2 mountain.
The 2009 Nobel nominee writes that as he recovered, he promised villagers to come back and build a school, a decision that gave birth to his now famous campaign.
But Bullock said that following “significant lapses in judgment,” Mortenson could no longer hold “any position of financial oversight” or serve as a voting member of CAI’S board of directors, though he will be allowed to keep a non-executive role.
“Despite the severity of their errors, CAI is worth saving,” Bullock added.
Executive director Anne Beyersdorfer said the group disagrees with some of the report’s analysis and conclusions but “look forward to moving ahead as an even stronger organization.”
She said Mortenson would be involved in CAI’S future.
Mortenson, who resigned as executive director last year, has repaid $495,000 of $1.05 million owed to CAI, leaving him with $560,000 to repay over three years because he has “insufficient financial resources” to pay it all at once, according to the attorney general’s report.
The investigation pointed to a significant lack of financial accountability, with vast amounts of cash spent overseas without supporting receipts and other documentation as Mortenson’s expenses went largely unchallenged by CAI’S board.
In one of the most egregious cases, CAI spent about $3.96 million buying Mortenson’s books — largely at full price from online retailers — to donate them without using his publisher’s discount.
Mortenson never abided by a CAI agreement requiring him to donate the equivalent of the royalties he made from the purchases or split, as agreed, the $4.93 million CAI paid to promote and advertise the books.
The charity spent nearly $2 million on charter flights to maintain Mortenson’s busy speaking schedule until he started paying for his own travel in the months leading to the April 2011 media investigations into his activities.
The report said Mortenson was “double-dipping” before the investigation, as he didn’t reimburse CAI for travel expenses despite receiving an honorarium from event sponsors.
Mortenson was not alone in making unaccounted charges to CAI’S accounts.
The charity’s credit card statements showed “questionable charges” by other employees at restaurants, bars and spas, as well as on health-club dues and gifts, the report said.
But the charity had good financial standing, with $23 million in reserves. CAI has helped communities build over 180 schools, and supports 56 more. It has also helped build 30 women’s vocational centres.
But CBS television’s 60 Minutes program last year said many of the schools supposedly run by the charity had never opened, while others were deserted or operating without links to Mortenson. The Montana probe did not delve into those issues.