Accusation: University funneled funds into foundation

Former state Rep. Jonathan Pelto has accused the University of Connecticut board of trustees of funneling state and student funds to the University of Connecticut Foundation.

According to Pelto, approximately $51.91 million has been switched from UConn’s operating fund to the UConn Foundation – a private organization – since fiscal year 2000.

“Connecticut private higher education foundations were intended to support our public institutions of higher education, not the other way around,” reads a release from Pelto.

Pelto was a member of the state House of Representatives in 1989 when HB 7206 – the foundation bill – was passed.

The bill acts as a checks and balance for private foundations that fundraise for institutions.

“Kevin Sullivan, Senate chairman of the education committee at the time, could not have been clearer when he brought the bill on to the senate floor,” said Pelto, adding Sullivan said “the cost of foundations will be borne by the foundations.”

According to Pelto, it is “unclear” how long UConn officials have allegedly switched funds, but there is documentation showing the action has been done.

He said the “UConn Foundation’s own audited statements reveal that it has received over $42 million from the University of Connecticut since M. Jodi Rell became governor and took control of the UConn Board of Trustees.”

In addition to audit reports, Pelto said a memorandum between university officials and the foundation highlights a fiscal year 2009 agreement that would result in the foundation receiving $7,582,000 from the university.

He said the UConn Health Center also transferred $1 million to the foundation that same year.

Pelto is calling for this action to stop.

“Even now, in the midst of this economic crisis, the president of the university has signed yet another memorandum of agreement for this fiscal year authorizing the transfer of more than $8.5 million away from university activities and into the foundation,” said Pelto.

Pelto said UConn’s actions are less than transparent and the funding should be returned to the university for its original purpose.

“Why UConn would take and shift public dollars to its private foundation is a bit mysterious, but, perhaps, it is trying to subsidize the foundation’s expenses in order to make the foundation look more successful,” he said.

Pelto said UConn’s actions are “truly incredible” and “fiscally irresponsible.”

According to Pelto, he first learned of the transfers after he won a Freedom of Information Commission hearing.

Pelto said he filed a complaint against the university for information pertaining to the quarterly magazine “Traditions,” from this hearing he was given additional information about the foundation – including the memorandums of agreement.

He said he was not certain if it is illegal for the university to give the foundation money, but the purpose of the legislation was to make certain private foundations were raising their own funds.

“It was so clear foundations were set up to support the university,” he said. “No one would ever conceive the university would support the foundation.”

University spokesman Michael Kirk said he had contacted various university officials to get reaction about the allegations, but he did not respond to the Chronicle before press time this morning.

Alleged transfers since fiscal year 2000:
- FY 2000: $3.15 million
- FY 2001: $3.05 million
- FY 2002: $4 million
- FY 2003: $4.84 million
- FY 2004: $4.84 million
- FY 2005: $5.34 million
- FY 2006: $4.87 million
- FY 2007: $6.97 million
- FY 2008: $7.24 million
- FY 2009: $7.58 million