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The Honolulu Advertiser

Posted on: Monday, June 21, 2004

Firing has fund-raisers bracing for impact

 •  Dobelle considers lawsuit
Thoughts? Join our discussion

By Johnny Brannon and Beverly Creamer
Advertiser Staff Writers

The ouster of University of Hawai'i president Evan Dobelle came at a critical time for the school's plans to raise money, and the question now is whether his departure will help or hinder those efforts.

Peter Park of 'Ewa Beach, a senior majoring in psychology, works the phones at the University of Hawai'i Foundation calling center. The foundation is embarking on a new fund-raising campaign.

Rebecca Breyer • The Honolulu Advertiser

UH and the foundation that seeks donations on its behalf are developing a major fund-raising campaign to dovetail with the university's 100th anniversary in 2007. The goal is to raise up to $250 million by then to support and expand programs.

The university and foundation are also under pressure from lawmakers to come through with $150 million that Dobelle promised would be raised in conjunction with the university's new medical school at Kaka'ako.

Dobelle's firing by the UH Board of Regents could scare new money away from the university by painting a damaging picture of instability and conflict.

But it could also make donors more comfortable that an era of open acrimony between Dobelle and the regents has ended.

"Certainly, the controversy has had some people sitting on the fence," said acting University of Hawai'i Foundation president Donna Vuchinich.

The foundation has received a few inquiries about Dobelle's ouster, but no major donations have been canceled or put on hold, she said. But there is concern over how the firing could affect some proposals that are pending with potential major donors.

"If this will affect their decisions negatively, then we're going to feel it," Vuchinich said. "But we don't know that yet. And we're holding our breath and hoping those calls don't come in."

Acting UH president David McClain, who replaced Dobelle, agreed that friction with the regents was not good for fund raising.

"Any time you have tension between a leader and a board of directors, it's inevitable it will have some impact on people's willingness to donate to the institution," he said. "As a general rule, it always will."

When Dobelle was hired three years ago, one of his main selling points was his professed ability to secure private donations for the university. But he had long been under fire for not living up to expectations.

Fundraising by the foundation over the past three years has declined compared with the three years before Dobelle arrived, and just $200,000 has been raised to build a cancer research center linked to the medical school.

In the meantime, regents and auditors have sharply questioned how Dobelle spent money from a protocol fund administered by the foundation, and whether he made proper reimbursements for personal expenses. Dobelle maintains that he paid back money when necessary.

The regents say legal concerns prevent them from publicly stating why they fired Dobelle. But regents vice chairwoman Kitty Lagareta said the reviews of the $200,000 fund factored into the decision.

The foundation has also experienced some instability and tension. Its former president, Elizabeth "Betsy" Sloane, left in March after two years on the job and became an associate dean at Harvard Divinity School.

Her departure was expected after the regents voted in December not to renew the employment contract of her husband, UH chief financial officer J.R.W. "Wick" Sloane — essentially firing him. He was to remain on the job until the end of the year, but went on paid administrative leave after Dobelle was fired.

The two men have been friends for decades, and some critics had pointed to the relationship as one of several examples of Dobelle stacking the UH payroll with cronies. Dobelle insisted he hired several friends and former colleagues because he knew he could depend on their work.

The Legislature agreed in 2001 to bankroll the medical school with $150 million in revenue bonds, with the understanding that Dobelle would raise $150 million more for the cancer center and for remodeling an older facility.

But private donors have given just $200,000 for construction work so far, according to foundation chief financial officer Bill King. About $16 million has been raised to support programs at the center once it's built, he said.

The foundation had just concluded a major fund-raising campaign when Dobelle was hired, and raised $116.4 million over four years, King said.

Of that total, $97.1 million was raised in the three years before Dobelle arrived, he said. Less than $65 million has been raised in the three years since then, but the total may reach $70 million by the end of this fiscal year, King said.

It's important to remember that a major fund-raising campaign was in full swing in the years before Dobelle, and that the foundation is just embarking on a new campaign now, King said.

Still, the regents sharply criticized Dobelle's lack of fund-raising progress in a written evaluation eight months ago, and some lawmakers have repeatedly raised concerns.

"When people tell the Legislature that they're going to do something, like raise $150 million, I think the expectation is that you're going to at least start as soon as you're able," said Rep. K. Mark Takai, chairman of the House Higher Education Committee.

"Almost three years later, there's been almost no movement," said Takai, D-34th (Pearl City, Newtown, Royal Summit).

Dobelle has said his understanding was that federal grants could be included in the $150 million goal. The regents flatly rejected that premise in the evaluation, and said the full amount must be raised from private donors.

In the meantime, no decision has been made on the exact location to build the cancer center. Vuchinich said it's hard to raise money for a project when the plans aren't solid.

"I can't ask people to invest in something that hasn't been finalized," she said. "They're not going to invest in something that's not concrete."

Dobelle said it's unclear whether his dismissal will affect fund raising, but that it certainly wouldn't go unnoticed.

"Obviously it will send shock waves" to potential donors, he said. "I've just visited some. You come and make a presentation that this is your vision, your passion, your hope, and the next thing, you're out. That's disconcerting for people who are going to give you money, and disconcerting for people of affluence who are writing checks."

But Dobelle said he will do as much as he can "to contain" the damage.

"I'll do everything to set aside my feelings and make sure the university is held as harmless as possible," he said.

That includes making phone calls in the coming weeks to groups the university has sought donations from, he said.

Reach Johnny Brannon at 525-8070 or jbrannon@honoluluadvertiser.com. Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.