May 28, 2003
Mittes, UT part ways over Gift
By Sharon Jayson, Austin American-Statesman
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An Austin-based foundation has withdrawn its $9.4-million gift to the University of Texas at Austin's business school after university officials raised concerns about accusations of sexual harassment against one of the foundation's executives.
The announcement was being closely monitored at the many business schools across the country that have received a total of $70-million in scholarship money from the Roy F. and Joann Cole Mitte Foundation.
The foundation's lawyer sent a letter last week to the dean of Texas' McCombs School of Business, George W. Gau, saying that it would honor its commitments for the first year of the program, but that after that, the deal was off. The announcement came three days after Mr. Gau raised his objections in a meeting with the foundation.
One of the main sticking points was the university's concerns about Scott Mitte, the 48-year-old son of the founders, Roy F. and Joann Cole Mitte. The younger Mitte resigned as executive director of the foundation last year after disclosures that he had been sued four times for alleged sexual harassment. The cases, which involve women he has worked with at the foundation and at an insurance company founded by his father, have all been settled out of court, and he has denied wrongdoing. However, he still serves on the foundation's Board of Directors as senior vice president, and, more important for the University of Texas, he was going to oversee the scholarship program at the university.
"We're obviously disappointed in losing scholarship money for our students, but we did have personnel concerns about who was going to be administering the program," Mr. Gau said.
Beginning this fall, the foundation's gift would have provided financial awards for 100 undergraduate business students and 15 M.B.A. students at Texas. Recipients would each receive $5,000 a year for the duration of their programs -- four years for undergraduates and two years for M.B.A. students.
The program was set to run for 20 years, and was supplemented by a $4-million gift from the businessman Red McCombs, after whom the business school is named. His gift is unaffected by the controversy.
The Mitte Foundation agreed to cover the scholarships for the students selected for this fall -- but only for the first year of the program, and the scholarships won't carry the Mitte name. The University of Texas will cover the rest of the scholarship cost for those incoming students. Thirteen undergraduate students and seven M.B.A. students had been selected so far, and will be entitled to that money, but no other students will be selected.
In its letter to the University of Texas, foundation officials pointed to the controversy surrounding Scott Mitte.
"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 from the foundation's lawyer, Jeffrey T. Knebel.
Mr. Knebel said he is convinced that the university was less concerned about Scott Mitte's involvement than it was in allowing the foundation to play an active role in running the scholarship program -- a claim that university officials reject.
In his letter to the dean, Mr. Knebel said that the foundation "must remain actively involved with and in close contact with its students, including reviewing and approving scholarship applications and tracking and monitoring the progress of the students, both in their academic achievements and records, as well as their community involvement."
Among the other recipients of Mitte Foundation gifts are the business schools at Indiana University at Bloomington, the University of Arizona, Southwest Texas State University, Texas A&M University at College Station, St. Edward's University, Ohio State University at Columbus, and Pennsylvania State University at University Park.
A spokeswoman for St. Edward's University, which is also in Austin, said the institution's officials have been "reviewing our relationship with the foundation" because of concerns raised about Scott Mitte's involvement with the program.
A Penn State spokesman said that the younger Mitte was not involved with its program; the spokesman was not aware of any plans for the university to reconsider its ties to the foundation.
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.
