Orange DA: UNC should seek outside review of Kupec's travel expenses

acurliss@newsobserver.comNovember 20, 2012 

  • Private jets, big tips Recently released documents detail a range of mostly permitted, but some impermissible, spending by former UNC chief fundraiser Matt Kupec. Examples: • Big tips. Kupec at times did not take into account when restaurants or bars included a gratuity in the bill, adding an additional and sizeable tip. One example: At a staff retreat at the Grandover Resort in Greensboro, he opened a bar tab for what he said through a lawyer could have been as many as 100 people who work in the fundraising arms of the university. They rang up 87 drinks in four hours at a cost of $624, which included an automatic 18 percent tip. Kupec added $130 to that, bringing the total tip to 43 percent. • Help for the chancellor. Kupec booked flights with Chancellor Holden Thorp multiple times, including a private jet to Boston ($9,500) and $5,100 on Boston Red Sox tickets for a group of 30, as well as a $16,300 private jet for a round trip between Seattle and San Francisco in early 2010. The flights were for site visits at M.I.T. and Stanford related to university efforts to spur entrepreneurship, one of Thorp’s main interests and the topic of a book he co-wrote. Kupec charged the foundation more than a $1,300 over the years for copies of Thorp’s book to hand out as gifts. • Goodies. Kupec made regular visits to UNC’s golf course, spending thousands on golf shirts and balls to hand out to donors. On one of the impermissible Notre Dame trips, a receipt shows a purchase at the campus gift shop in South Bend, Ind., for $323. UNC officials did not include that purchase in its listing of misspent money. • Other personal charges. Besides the personal trips that were repaid, the records show Kupec had used his foundation credit card repeatedly on other personal expenses and repaid for them, including groceries, hotel stays and meals. University auditors say that should not have happened. They did not label as impermissible his use of a foundation vehicle, and several gas station fill-ups, on a trip to South Bend, Ind., in November 2010. J. Andrew Curliss

Orange County District Attorney Jim Woodall says UNC-Chapel Hill officials should request outside investigative help to review at least $16,900 in personal spending with university money by Matt Kupec, the campus’ former vice chancellor for university advancement.

That hasn’t happened, according to authorities, following findings in a university audit of misspending by Kupec, who issued a public apology. He also has repaid money for a range of personal trips, dinners, lodging and other “questioned costs” with his girlfriend, Tami Hansbrough, recently released records show.

Woodall said he has not ruled out a criminal prosecution. A lawyer for Kupec, Wade Smith of Raleigh, said charges would be unwise.

The new documents show spending by Kupec of more than $1,300 on a St. Patrick’s Day trip to New Orleans in 2010, the use of a medical plane for a Fourth of July trip to a five-star resort on the Outer Banks that year, and later trips to basketball games involving Hansbrough’s son, Ben, at the University of Notre Dame.

On one of those basketball trips, to Louisville, Ky., in late 2010, the hotel receipt shows a morning room service charge of $57.04. Kupec called the room service a “breakfast meeting” in an expense form.

$1.1B raised over four years

The new documents also provide a glimpse into the spending of a top university fundraiser, with permitted expenses that included $9,500 on a trip to Boston on a private jet with Chancellor Holden Thorp and two others; liquor, wine and food tabs for staff and donors; and tens of thousands in tickets and entertainment related to basketball and football games.

Kupec led an operation that raised $1.1 billion in the past four years. At a time of declining state support and economic difficulty, the past fiscal year was UNC-Chapel Hill’s second-best ever for fundraising: $287.4 million.

Kupec and Hansbrough, a former university major gifts officer and the mother of former star basketball player Tyler Hansbrough, both resigned in September as news of their travels was reported by The News & Observer. Thorp had stopped Kupec’s plan to hire Hansbrough to work for him, but allowed an arrangement where Hansbrough worked in another department with her salary funded by Kupec’s office.

The university released an audit on Oct. 23, but had not immediately provided receipts and other documents. The documents show that Hansbrough submitted her own expenses to Kupec, an arrangement the university had not previously disclosed.

University leaders are required by state law to notify the State Bureau of Investigation about misuse of state property or money within 10 days of receiving such information. There has been no notice made to the SBI in the Kupec matter, according to Noelle Talley, an SBI spokeswoman. SBI agents reached out to the university, she said.

University officials told the SBI, and have said publicly, that the misspending by Kupec did not involve state money or property. They say the source of the misused funds was private donors who gave gifts to the university’s foundation.

“All of the unallowable expenses were charged by Kupec to funds held by the UNC-Chapel Hill Foundation Inc.,” according to Karen Moon, the university’s news director. “Kupec has repaid the unallowable expenses. No state funds were involved in the unallowable expenses.”

Misuse of property?

The new records, which total about 1,100 pages, show that on Aug. 10 this year, a month before his resignation was announced, Kupec wrote checks totaling $2,613 to cover part of the cost of his personal travels.

The three separate reimbursement checks were all made out to “UNC-Chapel Hill,” not the foundation.

The repayments were for two trips he took with Hansbrough in early 2011. It is unclear what prompted Kupec to pay for those trips at that time, but officials have said his expenses had come under scrutiny by then.

Part of those reimbursement checks covered his use of a UNC medical plane for a trip to the West Virginia-Notre Dame basketball game in February 2011.

In all, six questioned flights by Kupec were aboard planes that are assigned to UNC Medical Air as part of the N.C. Area Health Education Centers program, which ferries doctors and health providers to rural areas in the state. Medical Air’s staff and pilots are state employees.

Moon wrote in an email message that the university does not believe that Kupec’s use of the planes was a misuse of state property. She wrote that Medical Air aircraft “are not state property but are owned by Medical Air, Inc., a not-for-profit organization and the funds that paid for the flights were from The University of North Carolina at Chapel Hill Foundation, Inc.”

The Medical Air program gets state support. It limits passengers to those traveling on “state or university business” and requires payment for flights from an “official” state or university account. The legislature has included the Medical Air planes in recent studies of the state’s aircraft fleet.

Medical Air billed UNC’s Office of University Development a total of $8,088 for flights taken by Kupec with Hansbrough that auditors say were personal trips. Medical Air was paid from a “University of North Carolina” account labeled “special funds,” according to check stubs.

A prosecutor’s prerogative

Woodall said he has been in touch with the SBI about the misspending.

“I would hope that the university will see fit to allow someone from outside, someone who’s a little more independent, to look at this,” Woodall said. “My position is let’s give UNC time and let’s see if they ask for another set of eyes to look at this. And if they don’t, we’ll see where it goes from there.”

Woodall acknowledged that he has the authority to begin a probe, but said his preference, in keeping with protocol, is for UNC to initiate further action.

If private money was misspent, prosecutors generally would want a cooperating complainant when bringing charges in embezzlement and similar cases.

The chairman of the board of UNC-Chapel Hill Foundation Inc. is Wade Hargrove, who is also the chairman of the Board of Trustees at UNC-Chapel Hill.

University officials said Hargrove is aware of their position that the misspent money did not involve state funds. Hargrove said he could not comment because the foundation board has not discussed the matter. It next meets after the first of the year. Kupec had been the foundation’s executive director.

Dennis Patterson, a spokesman for the state auditor’s office, said it is not immediately clear whether state money was abused and that a thorough review would be required. He would neither confirm nor deny that state auditors are investigating the spending.

Smith, Kupec’s lawyer, said Kupec is sorry for what happened, has made sure all the money was repaid, and believes a criminal case would be a waste of state time and money. Prosecutors should exercise discretion in whether to pursue a case, Smith said.

“Compared to the work he did and the money he brought in, it is a small, a tiny bit, of money,” Smith said. “I would welcome if this matter could be concluded and this man could go on with his life … No good can come from a prosecution of Mr. Kupec, who has no job and has lost everything.”

Curliss: 919-829-4840

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