Ohio State University Chief Financial Officer Geoff Chatas, the man behind the recent major money deals at the university, spent $121,000 on travel over a two-year period, making trips to Iceland, Paris, India, China and other destinations.
Former OSU president E. Gordon Gee hired Chatas in February 2010 to oversee the university’s $5 billion budget and a team of 350 employees. His base pay is $650,000 a year and he is eligible for up to $162,500 in annual bonus pay.
While traveling to an OSU fundraising event in February 2012, Chatas flew to Florida on OSU’s private jet and stayed at the five-star Ritz-Carlton Naples, which features clay tennis courts, two golf courses, stunning views of the Gulf of Mexico, a pure white sand beach and pool-side cabanas. The bill was $1,264 for two nights.
The Plaza Athenee on Manhattan’s Upper East Side, where OSU spent $2,235 to accommodate Chatas in July 2011, is a five-star luxury hotel with high-end amenities including personal yoga and pilates instructors. New York was Chatas’ first stop on a $15,687 trip that also took him to Iceland, Paris and London.
OSU Assistant Vice President for Media Relations E. Gayle Saunders said Chatas’ stays at luxury hotels and the occasional first class flight and use of the university’s private jet does not violate Ohio State policy. “Geoff does focus on complying with the policies. He has been in compliance,” she said.
She noted that Chatas is expected to travel extensively.
“Geoff Chatas has been charged with creating a fundamentally new model of financing universities, which requires stronger relationship-building strategies and important face-to-face engagement of partners,” Saunders said.
Chatas was not made available for an interview for this story.
OSU Interim President Joseph Alutto said he is not familiar with the details of Chatas’ travel but he noted that the trips to India and China to see OSU’s new offices were essential.
“In fact, I’d be surprised if he didn’t go,” Alutto said.
Chatas’ travel tab is above what other OSU senior executives spent during the same period and it far exceeds the $1,286 his predecessor, William Shkurti, spent on travel in his last few years on the job, according to university records.
Shkurti, a former state budget director and long-time OSU chief financial officer, said his old job has been revamped so comparing his travel to Chatas’ is not apples to apples.
Richard Vedder, an economist and director of the Center for College Affordability and Productivity, said Chatas’ travel bill is excessive.
“Gordon Gee unleashed an environment of big spending and a total disregard for the students who pay a good hunk of the bills. Perhaps a chief financial officer needs to go too,” Vedder said. “Spending $10,000 annually might be justified, but spending six times that on trips to places like Paris, India and China seems totally unjustified.”
He added, “Where is the oversight? If OSU won’t police itself, who will? Gov. (John) Kasich and legislative leaders, where are you when we need you?”
Sara Kilpatrick of the Ohio Conference of the American Association of University Professors said top administrator travel and perks are a troubling trend at universities across the nation and at public colleges in Ohio.
“It comes down to where are our priorities? It doesn’t seem to be the academic mission. It doesn’t seem to be the students. It seems to be traveling to Iceland to do who knows what,” Kilpatrick said. At the bargaining table, faculty routinely hear management cry poor and yet there is money available for top administrators to be wined and dined like business executives, she said.
“With student debt reaching $1 trillion across the country, students can’t afford this anymore,” Kilpatrick said.
On average, Ohio students carry $28,683 in debt by the time they graduate. The cost of attending Ohio State’s main campus as an in-state student is $10,037 in tuition and fees, not including room and board.
Our Columbus Bureau has been investigating expenses, business deals and policy changes at Ohio State University, which is one of the largest public universities in the nation with 65,000 students.
After examining discretionary spending, travel and use of endowment money by E. Gordon Gee, our reporters received a tip to look into the expenses of Chatas and other senior managers at OSU. Reporters requested travel and entertainment expenses and other documents in January but OSU didn’t fully respond to the public records request until July.
One reason Ohio State took more than six months to provide travel and entertainment expense documents is that the records are kept in different systems, making a comprehensive and thorough retrieval cumbersome, two spokeswomen said.
Chatas and other senior OSU managers are not required to file annual financial disclosure statements with the Ohio Ethics Commission. Those forms mandate that public officials clearly list the sources and amounts of travel, meals and gifts.
Chatas has credentials and connections
Chatas, whose father-in-law is former OSU trustee Jack Kessler, has a strong resume: infrastructure investments for JP Morgan Asset Management, adjunct professor at OSU’s Fisher College of Business, chief financial officer for Progress Energy Inc. and senior vice president for finance for AEP, Inc. He has solid academic credentials as well: an MBA from an international business school in France, a master’s in history from Oxford University in England and a bachelor’s degree from Georgetown University in Washington, D.C.
As state and federal support is threatened, Chatas is taking the lead on OSU’s effort to find new business arrangements to bolster revenues and trim costs, according to university spokeswoman Saunders.
Since joining Gee’s team, Chatas has been the driving force behind key financial deals including OSU signing a 50-year lease of its 35,000 parking spaces with QIC Global Infrastructure and LAZ Parking in exchange for $483 million in cash and issuing a “century bond” — $500 million in bonds issued at 4.8 percent annual interest. OSU makes interest payments and is obligated to pay off the principal in 2111.
Gee, who retired as OSU president in July, previously told our Columbus Bureau that the parking deal and 100-year bond issue were proof that his management team was on the cutting edge in generating revenue for Ohio State.
Chatas traveled to New York, Boston and Chicago to meet with bond rating agencies, investment banks, to Washington D.C. and Cincinnati to meet with Ohio’s members of Congress, and to San Francisco, New York, Chicago, Aspen and Quebec City for conferences.
OSU sent Chatas with a delegation to satellite offices in Shanghai, China and Mumbai, India to audit and certify those offices’ finances. The university opened the offices to build research and teaching partnerships, recruit international students, establish an executive training program and network with alumni. It plans to open third international office in Sao Paulo, Brazil next year.
The offices in India and China have cost $1.85 million combined over the past four fiscal years, including $267,601 in travel expenses, according to university records.
Alutto noted in a speech this month to the Columbus Metropolitan Club that OSU students will be competing in a global economy so the university is pushing to provide a college experience that includes studies abroad and a diverse student body. The offices in India and China help OSU push its brand, he said.
Internal auditor raises issues
Accounting for travel and entertainment expenses in Chatas’ office has come under scrutiny by OSU internal auditors.
An internal audit released in May 2011 dinged the office of business and finance for failing to submit itemized receipts for purchase card transactions, spending $446 to $565 per night for hotel rooms, failing to properly train employees with fiscal responsibilities and losing track of non-capital equipment.
University records show that Chatas himself has failed to provide receipts, exceeded limits for food, drink and tip or otherwise failed to follow OSU policy in his expense account reports.
Chatas and his team spent $136,000 out of a discretionary account between 2010 and 2012, with just under half of that — $62,382 – going toward rent for a suite at the Schottenstein Center which holds OSU athletic events and concerts. Other big categories of discretionary spending: $16,323 in faculty club billings, $4,413 in football and basketball tickets, $11,500 in donations to Nationwide Children’s Hospital and the Columbus Metro Library Foundation, $3,000 for Chatas to sponsor Who’s Who and $2,547 in dues to the New Albany Country Club and the Columbus Club.
The hotel expenses flagged by auditors were attributed to Charles Gilmore and Jonathan Hook in OSU’s office of investments. Gilmore stayed at the Boston Harbor Hotel at Rowes Wharf, which cost $446 a night, while he attended a conference. Hook, who is the chief investment officer, stayed at the Algonquin Hotel while meeting with investment managers in New York. The overnight cost $565.
University policy states: “University travelers should incur the lowest reasonable travel expenses and exercise care to avoid impropriety and/or the appearance of impropriety.” In one section of the 12-page policy says the university won’t pay for first class travel but in another section it says the traveler should purchase coach or economy tickets for air travel of less than five consecutive hours in flight. The policy is silent on how to choose a hotel, other than OSU will pay “reasonable, single occupancy or standard business room rates.”
Saunders said Chatas has complied with university policies.
Even so, Vedder said Chatas’ travel bill — and the choice of hotels — is over-the-top for a public official.
“This is unbridled, outrageous, conspicuous consumption at student expense. ” Vedder said. “Universities appropriately need some independence to avoid political interferences in the creation and dissemination of ideas, but OSU has clearly abused this special privilege and needs to have external oversight and or rapid and substantial internal reform.”
Ohio State University Chief Financial Officer Geoff Chatas spent $121,000 on travel over a recent two-year period — about half of it is attributed to three international trips.
Agency Fee: $36
Per Diem: $1,563
Chatas reimbursement: ($3,141)
Agency Fee: $73
Business Meals: $210
Per Diem: $393
Agency Fee: $36
Per Diem: $364
Source: Ohio State University
Ohio State University Chief Financial Officer Geoff Chatas has engineered major money deals to bring immediate cash to the school.
Oct 2011: OSU issued a ‘century bond’ for $500 million at 4.8 percent annual interest. The principal must be paid in 2111. The cash is earmarked for capital projects.
Feb 2012: Huntington Bank signed a 15-year $25 million contract with OSU to be the official bank on campus, giving Huntington the exclusive right to put branch offices and ATMs across campus and make pitches to students and faculty. Huntington promised to also loan out $100 million for economic development projects near campus.
June 2012: OSU signed a 50-year lease of its 35,000 parking spaces with QIC Global Infrastructure and LAZ Parking in exchange for $483 million in cash. OSU plans to use investment earnings off the cash for scholarships and hiring more faculty.
Graphic: View a map of Chatas’ travel and learn more about where he stayed at myDaytonDailyNews.com