May 28, 2003
Mittes, UT part ways over Gift
By Sharon Jayson, Austin American-Statesman
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An Austin-based foundation is withdrawing a $10 million pledge made 18 months ago to help business students at the University of Texas.
In a letter to George Gau, dean of UT's McCombs School of Business, the Roy F. and Joann Cole Mitte Foundation ended its agreement, citing concerns university officials had expressed last week about the involvement of the Mittes' son, Scott.
In December, Scott Mitte settled the last of four sexual harassment complaints against him. A year before, when Mitte, then the executive director of the family foundation, announced the donation to UT, news about the accusations had not been made public. Scott Mitte now sits on the foundation's board of directors.
"While we believe that many of these claims are unfounded, and the concerns you expressed on behalf of the UT administration are not legitimate or justifiable, we do understand that this creates significant concerns for the administration and its association with the Mitte Foundation in the future," said the letter dated May 22 from Jeff Knebel, the foundation's attorney.
Beginning this fall, the gift would have awarded 100 undergraduate scholarships and 15 fellowships each year in a program set to last 20 years. Freshmen who met the criteria would have gotten the $5,000 annual gift for four years; candidates for master's degrees in business administration would have received the money for the two years it takes to complete the program.
The foundation will still cover the first year of scholarships for the students selected for the fall, and the business school will find money to cover the rest, Gau said. School officials said 13 freshmen fit that category. Seven MBA students have been offered scholarships, but not all have responded yet. The program will end with this group.
Gau said Tuesday that the letter, which requested that university officials not comment in detail, wasn't a surprise. He would not elaborate on the school's concerns.
"Our concern was solely a personnel issue," he said. "It was who was going to be administering the program. That was our sole concern."
Knabel said Scott Mitte would have been one of the foundation's representatives working with the UT program; in his letter, he noted that the Mitte Foundation policy is to "remain actively involved with and in close contact with its students."
The McCombs School's undergraduate program is ranked seventh in the nation in U.S. News & World Report magazine. Its MBA program ranks 17th.
The Mitte Foundation has pledged more than $70 million over 20 years to business schools across the country. Included in that is $17.5 million to Southwest Texas State University, Roy and Joann Mitte's alma mater.
The Mitte Foundation has also been fighting with Austin life insurer Financial Industries Corp., which was founded by Roy Mitte. Mitte was ousted as chief executive in October after being accused of using millions in company money for personal expenses and for authorizing a $1 million donation to the foundation without board approval.
He has denied those charges and recently reached an agreement with
the company to settle litigation related to his firing.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
