Wednesday, October 5, 2011

Universities Are All Too Happy to Accept Cash From Shady Sources

Donna Shalala and Nevin Shapiro (center)

Perhaps the most embarrassing moment in the evolving University of Miami athletics scandal came with the release of a  photograph that featured UM President Donna Shalala accepting a $50,000 check from booster Nevin Shapiro.

Unfortunately for UM, Shapiro turned out to be the architect of a $930-million Ponzi scheme and now resides in federal prison. Perhaps worse than that, Shalala was wearing a goofy grin as she accepted Shapiro's check.

What do we learn from this photo? University administrators love to get their greedy hands on cash--from almost any source. As long as the check clears, folks in the "ivory tower" aren't likely to ask too many questions. And that raises this question: How much dirty money circulates on America's college campuses? The answer probably is "quite a bit."

We have one piece of good news for Shalala: She's hardly alone in academia; quite a few of her colleagues are more than happy to grab easy money from questionable sources. Let's consider just two examples that we are aware of here in Alabama.

In 2002, the University of Alabama--that's the mother ship, in Tuscaloosa--rolled out a press release to announce that Paul Bryant Jr. had given $10 million to help launch the Crimson Tradition Fund. Bryant, the son of legendary UA football coach Paul "Bear" Bryant, was named chairman of the campaign, which was designed to raise $100 million for Crimson Tide athletics. Bryant also was a member of the university's board of trustees, a position he still holds.

With Bryant's cash in the hopper, UA was able to attract other big gifts, like this one from the president of a Texas-based natural-gas outfit. Not only did Bryant pony up some serious dough, he became one of the campaign's chief arm twisters and its public voice:

Bryant, who chairs the Crimson Tradition Fund, made his gift at this time to offer leadership to the 27 members of the Crimson Tradition Fund Executive Committee who are also preparing their own gifts and beginning their soliciting of key supporters of the drive.

“This campaign will allow our fans, friends and alumni to support the Crimson Tide in a meaningful way,” said Bryant. “Our goal is to raise $50 million in commitments from the private sector.”

The other $50 million of the $100 million total will come from a public bond issue offered for the construction of the north end zone of Bryant-Denny Stadium. Bond monies would be repaid through ticket sales revenue.

Did anyone in Tuscaloosa ask this obvious question: "How did Paul Bryant Jr. come to have so much cash lying around?" Mal Moore, the long-time UA athletics director and a major Bryant crony, was not about to do that. If Moore had an inquiring mind, he might have discovered that one of Bryant's companies, Alabama Reassurance, had been implicated in a $15-million insurance fraud scheme that helped draw a 15-year prison sentence for a Pennsylvania man named Allen W. Stewart. The Stewart conviction came in 1997--and public documents show that Bryant's company was in the middle of the sleaze. And yet, just five years later, Bryant was launching the Crimson Tradition campaign.

Paul Bryant Jr. (right) and Mal Moore
Did anyone in the UA hierarchy bother to inquire about the source of Bryant's funds? Is it possible that the powerhouse Crimson Tide football program, currently ranked No. 2 in the country, is fueled partly by the proceeds from insurance fraud? The answers appear to be no and yes.

Tuscaloosa is not the only campus in the UA system to grab cash from a curious source. Consider the University of Alabama at Birmingham (UAB) and businessman William Cobb "Chip" Hazelrig. With his ties to real estate, oil and gas exploration, gaming, and other enterprises, Hazelrig was able to give UAB $5 million toward construction of the Hazelrig-Salter Radiation Oncology Facility. It's believed to be the largest individual gift in the university's history.

Did anyone at UAB look into Hazelrig's background before accepting his check. President Carol Garrison, who has her own history of shaky ethics, had no interest in asking questions. We, however, did some sniffing on the "Chipster"--and here is what we found:

* He has strong ties to the gambling industry and has been a key investor in Paragon Gaming, which currently is planning to build a major resort in Canada. Former Alabama Governor Bob Riley returned a $10,000 donation when he learned of Hazelrig's ties to gaming. (Hazelrig appears to be a staunch Republican, with documented ties to the Riley clan.)

* He has a hideous driving record. Court records show that Hazelrig has about 20 convictions for traffic-related offenses. These include a DUI and a speeding ticket for driving more than 100 miles per hour.

Chip Hazelrig and Carol Garrison (both far right)

* He has curious connections to the mysterious death of Alabama lawyer Major Bashinsky, which has been ruled a suicide even though there is zero scientific evidence to support that finding. One of Hazelrig's companies, W&H Investments, was embroiled in a lawsuit with the Estate of Sloan Bashinsky in the months leading up to Major's death. The elder Bashinsky had invested some $37 million with W&H, and his son's disappearance coincides with a lawsuit the estate filed in order to receive an accounting of those investments. Here is how we described it in an earlier post:

Court records indicate the Bashinsky estate never received much of the information it was seeking, but the lawsuit officially was settled on March 1, 2010. Two days later, Major Bashinsky was reported missing. His body was found floating in a Birmingham golf-course pond on March 15, and nine days later, authorities ruled it a suicide.

We might never know for sure how Major Bashinsky died. But we do know this much: An estate was seeking an accounting of Chip Hazelrig's investment records, and a member of the family wound up dead under horrifying circumstances. Since then, another member of the Bashinsky family, first cousin Charles "Bubba" Major, has died from a reported suicide. Bubba Major had publicly expressed doubts that Major Bashinsky actually killed  himself--and now Bubba Major himself is gone.

That disturbing chain of events, whether they are related or not, started with a lawsuit against Chip Hazelrig's company, the source (we assume) of quite a bit of the cash he donated to UAB.

Does that trouble anyone at UAB? We've seen no sign that it does. Chip Hazelrig's check must have cleared, and that's all the university cares about.


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jeffrey spruill said...

Shocking - isn't it - to discover there seems to be a vast network of crime synidicates driving the US of A into the gutter.