Central Asia Institute (CAI)/Greg Mortenson Under New Scrutiny

by Gary Snyder

 Jon Krakauer reveals that the charity, Central Asia Institute, continues to waste donated dollars and author Greg Mortenson is still dodging accountability.

Numerous investigations uncovered “financial transgressions” and “serious internal problems in the management of charity, the Central Asia Institute (CAI).”

The attorney general ordered Mortenson to pay CAI more than $1 million as restitution and forbade him from serving as a voting member of the CAI board of directors or holding any position at the charity “requiring financial oversight.” To avoid being sued by the state of Montana, Mortenson and CAI signed a settlement agreement and assurance of voluntary compliance with Bullock that required CAI to expand its board from three members to at least seven and to hire a new executive director to replace Anne Beyersdorfer, a longtime friend of the Mortenson family who had been serving as executive director since Mortenson took a paid leave of absence shortly after 60 Minutes aired.

From her first day on the job, Beyersdorfer’s tenure at CAI was characterized by frequent public statements pledging her commitment to “full transparency,” while simultaneously doing everything in her power to keep Mortenson’s misdeeds hidden from journalists, donors, and the public.

Two years have now passed since the Mortenson scandal erupted. The CAI board has been overhauled, and a new executive director with seemingly solid credentials took over from Beyersdorfer in March 2013. But Mortenson remains on the CAI payroll (his annual compensation is $182,220, according to the most recent financial information released by the charity), and he continues to exert considerable influence over its operations. He is still very much the public face of CAI.

Mortenson apologists counter that his failings and misdeeds are in the past and should be forgiven. The available evidence suggests otherwise. As the attorney general’s investigative report pointed out, even when Mortenson’s managerial failings were brought to his attention, he refused to correct them.

According to multiple sources, Mortenson routinely sabotaged the efforts of CAI staff to rectify the dysfunction and corruption they encountered. And this appears to be attributable, at least in part, to the fact that Mortenson had secrets he wanted to protect. As an ex-CAI employee told me, “Greg did not like people discovering things.”

Contrary to the assurances of supporters who insist that both Mortenson and CAI have cleaned up their acts, an audit of the charity’s overseas activities by a Pakistani accounting firm, as well as information provided by other sources in Pakistan and Afghanistan, indicate that CAI’s foreign operations are currently beset by widespread corruption. Thanks to appallingly lax oversight that began while Mortenson was at the helm and continued during Beyersdorfer’s two-year tenure, many hundreds of thousands of dollars—perhaps millions—appear to have been wasted or pilfered by some of the charity’s Afghan and Pakistani staff.

The allegations regarding oversees staff include:

• ·      a lavish Islamabad home purchased with CAI funds for approximately $486,000, was sold and all the proceeds from this sale was deposited into a personal bank account. 
• ·      a CAI certificate of deposit for $42,000 was redeemed and used for personal expenses.
• ·      contracts for the construction of colleges and schools were awarded without following any open bidding process
• ·      family members are paid handsomely for questionable jobs
• ·      the salaries of four drivers and three vehicles were paid with CAI funds. Two of the vehicles are registered in the name of the CAI Pakistan Trust; one is registered in a private person’s name.
• ·      as much as $28,000 was spent on air travel in a two day period.

Readers of Nonprofit Imperative will recall huge charity sums were used to advertise Mortenson’s books and fly him around the country in private jets in apparent violation of Section 4859 of the Internal Revenue Code, which prohibits board members and executive officers of a public charity from receiving “an excessive economic benefit” from the charity.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)