(updated) Georgia Perimeter College & University System of Georgia Crimes Timeline

A review by the University System of Georgia (USG) of the $16 million budget shortfall in 2012 at Georgia Perimeter College (GPC)— a review that was explicitly relied on by Attorney General Sam Olens in his decision not to investigate further–found no evidence of fraud or criminal activity.1

That conclusion—that no crimes were committed–is based largely on the USG’s acceptance of claims by GPC’s Executive Vice President for Financial and Administrative Affairs, Ron Carruth, that he had no knowledge that his official reports of an ample budget surplus, even as reserves were being depleted to cover revenue shortfalls, were false. In particular, Carruth blamed GPC Budget Director Mark Gerspacher for misinforming him about spending overtaking revenues and depleting GPC’s reserve funds—which contained $20 million at the start of 2009 and disappeared by the end of 2011.2

The following 2011-2012 timeline demonstrates, however, that budget reports for GPC were knowingly and willfully falsified in felony violation of OCGA 16-10-203 & 16-10-8.4

It appears that accurate budget information was withheld for over a year5, in violation of those statutes, as well as GPC Policy 302 that required Carruth, as Executive VP for Financial and Administrative Affairs, to inform the President of any indication that the GPC budget was not sustainable.6

However, while this deficit information was not reported to Tricoli or the rest of GPC management outside of Carruth’s office, timely and accurate information was funneled from Carruth to Rob Watts and other USG officials—who also failed to disclose it to Tricoli according to the policies and procedures of the USG. See USG timeline.

2011-2012 GPC TIMELINE

March 10, 2011: VP of Finance Ron Carruth and Budget Director Mark Gerspacher reported a budget surplus of $38 million to the GPC Faculty Senate.

July 1, 2011: According to Gerspacher, Carruth ordered Gerspacher to withdraw $1.5 million from the reserve fund to cover revenue shortfalls—three months after reporting the $38 million surplus to the Faculty Senate.

July 2011: According to Assistant VP of Finance Sheletha Champion, in the USG review, she passed on to Carruth a report of negative balances and dwindling reserves, but Carruth took no action—though GPC Policy 302 gave Carruth an affirmative duty to inform the president.

September 22, 2011: state auditors at the budget exit interview inform GPC budget staff of multiple negative balances in GPC accounts. The interview was attended by Carruth, Champion, and Gerspacher7—who never brought this negative review to the attention of GPC management outside Carruth’s department, contrary to GPC Policy 302.

January 23, 2012: GPC budget staffer in charge of auxiliary reserve funds, Keith Chapman, writes to Assistant VP of Finance Sheletha Champion complaining about a decrease in two different reserve funds of $4.5 million and $3.2 million, and refers to plans by Carruth “to spend additional auxiliary reserves this year.” In the email, Chapman expresses anger that millions in reserves are “gone with no explanation.”

February 3, 2012: In response, Champion requested Gerpsacher to prepare a report on the GPC reserve funds depletion by February 10—and asked all GPC budget staff to report to her any knowledge they have of Champion and Carruth being aware of the reserve funds depletion.

February 9, 2012: Gerspacher sent Champion the report on reserve depletion she requested. The report referenced discussions as early as July 2011 with Carruth and Champion about spending GPC reserve funds to avoid revenue shortfalls.  This report was never shared with Tricoli or GPC management outside Carruth’s budget office, contrary to GPC Policy 302.

March 6, 2012: Carruth’s official report to the President’s Cabinet states $3.6 million in reserve and “normal USG budget process.”

March 8, 2012: In the annual USG budget hearing attended by Carruth, President Tricoli informed Chancellor Hank Huckaby of Tricoli’s plan to raise GPC faculty salaries, using an $800,000 reserve set aside for that purpose.

March 15, 2012: Budget Director Mark Gerspacher’s last day on the job. He leaves GPC for a job at another USG institution.

March 21, 2012: Champion forwarded Gerspacher’s February 9 report on reserve depletion to Carruth—who in turn forwarded it without comment to Gerpsacher’s replacement, Amy Jurgens.  Champion’s March 21 email references a prior conversation with Carruth about spending the auxiliary reserves.

March 23, 2012: Tricoli emails Carruth and Huckaby about Tricoli’s plans to use the $800,000 set aside to raise faculty salaries. Carruth makes no mention of depleted reserves (per February budget report) or $6.1 million operating deficit and $6.7 million fringe benefits arrears (per March budget analysis—see March 24).

March 24, 2012: The day after the discussion of faculty raises, Champion emails a budget analysis prepared for accreditation agency, saying the final report is due to the USG on March 26. That budget analysis shows $6.7 million arrears in employee fringe benefits with three months left in the fiscal year, as well as a $6.1 million deficit in GPC’s operating expenses. Champion’s March 24 email refers to Carruth’s knowledge of “over spending and little to no fund balance” over the last two years—the day after Carruth made no response to Tricoli’s discussion of spending the reserve supposedly set aside for faculty raises. This March 2012 report detailing at least a $12.8 million deficit was never shared with Tricoli or GPC management outside Carruth’s budget office, contrary to GPC Policy 302.

April 15, 2012: Carruth informed President Tricoli that GPC had $4 million available to the end of the fiscal year (June 30).  [Carruth did not mention that, according to his department’s March 2012 budget analysis, these funds fell $6.1 million short of operating needs.]

April 25, 2012: Carruth informed Tricoli that there was actually a small deficit of $1-2 million. Tricoli called in GPC management the same day to find savings to balance the budget. However, Carruth then informed Tricoli that the deficit was larger than Carruth reported earlier that same day. Tricoli informed Chancellor Huckaby and called in USG auditors to assess GPC’s financial condition.

April 26, 2012: after reviewing GPC books, USG auditors estimate deficit at $16 million. Huckaby demands Tricoli’s immediate resignation.

May 7, 2012: Huckaby terminates Tricoli by letter stating that Tricoli’s annual contract expiring on June 30 will not be renewed by the Board of Regents.

May 10, 2012: USG begins, in place of a scheduled state audit, its own review of how the $16 million deficit occurred.

September 17, 2012: The USG’s review of the GPC budget crisis, the “Special Report,” released.  The Special Report faults Tricoli and finds no evidence of fraud or criminal activity.

2009-2012 USG Timeline

Note: instead of organizing solely by date, the knowing felony misrepresentations by USG personnel are also organized by the Board of Regents (BOR) Policy violated by their actions.

April 25, 2012: The same day the surprise $16 million deficit was reported, USG Chancellor Hank Huckaby demanded Tricoli’s resignation under the threat that Huckaby would fire him.

Tricoli refused, and the USG released to the press false information that was widely reported that Tricoli had personally directed the deficit spending. Of course, this was prior to any investigation. The Special Report released five months later verified that EVP Ron Carruth actively misled Tricoli about GPC finances—which were accurately reported to USG officials who withheld that information from Tricoli. The USG never corrected the false information that had been used to publicly malign Tricoli in the press in April and May of 2012.

May 7, 2012: Huckaby offered Tricoli a position in the USG central office if he would resign under the pressure created by the false media reports.

May 9, 2012. Tricoli accepted and resigned—after it was reported in the media that Tricoli it had been decided a week earlier that Tricoli would be removed from GPC and had already been reassigned to the USG central office.

May 10, 2012. Huckaby reneged on the USG central office job offer, declined to acknowledge Tricoli’s resignation, and instead sent Tricoli a letter saying that the Board of Regents had not renewed Tricoli’s annual contract and his employment with the BOR would cease at the end of his existing contract on June 30, 2012.

This ouster violated BOR Policy in numerous respects.

For example, BOR Policy 2.3 requires an annual performance evaluation, for use in the Board of Regents annual decision on renewal of presidential appointments.

From 2009 too 2011, the years in which GPC’s reserves were exhausted by Carruth, the USG’s COO Rob Watts was responsible for Tricoli’s evaluation. These evaluations and supporting documentation never included any mention of deficit spending or the drawdown of GPC’s reserves. The USG has refused Open Records requests for this documentation.

In 2012, new Chancellor Hank Huckaby was responsible for Tricoli’s evaluation, as Huckaby notified Tricoli by letter in March of 2012. It is undisputed that Huckaby never performed this evaluation required by USG policy prior to Tricoli’s ouster in May of 2012.

September 2009-2011. The USG also required an annual budget review of each institution every September. From 2009 to 2011, these were overseen by COO Rob Watts. At no time from 2009 onward did any of these budget reviews include any mention of deficit spending or depletion of reserves. This, of course, is inconsistent with the reports Watts was receiving from Carruth that GPC was outspending its revenues from 2009 onward. This omission to report this information to Tricoli in the annual budget review was a violation of OCGA 16-10-20. The USG has refused Open Records requests for this documentation.

March 2012. As noted in the GPC timeline, an email string among GPC budget officials, detailing a fiscal crisis and the exhaustion of GPC reserves, began at least as early as January 2102, when the auxiliary reserves director questioned why millions in reserves were “gone without explanation.” The subsequent audit by the USG stated that no USG budget officials were included in these communications. That is a knowingly false statement, as the email string included USG budget officer Ben Riden at least as early as March of 2012.

March 26, 2012. On this date, Ron Carruth submitted a GPC budget analysis to the USG for accreditation purposes. That analysis, which was never shared with Tricoli or other GPC management in violation of GPC Policy 302, showed GPC running a deficit of at least $12.8 million at that specific point in time. This report submitted by GPC budget officials to the USG is nowhere acknowledged in the Special Report, which falsely claims that GPC budget officials did not apprise the USG of GPC’s evolving deficit crisis.

April 2012. As noted under BOR Policy 2.3, USG policy required the Regents to give notice, based in part on the annual performance evaluation, to any president who did not receive renewed appointment immediately after the Board’s regular April meeting. This notice immediately after the April meeting was required by BOR Policy 2.4.2. Tricoli received no such notice after the Board’s April 2012 meeting. However, on May 10, 2012, Huckaby wrote Tricoli to inform him that Tricoli would not be renewed by the Board and his annual contract would terminate on June 30, ending Tricoli’s employment. This May 10 notice violated BOR Policy 2.4.2. After Tricoli filed suit, the Regents changed the policy, on August 14, 2014, to state that the president should receive notice after the Board’s May meeting—in attempt to bring the policy into compliance with the Board’s actions, after the fact.

After Tricoli’s ouster—which was not in compliance with BOR policies–the Board also changed the offer and acceptance letter used to hire institution presidents to remove the statement that the presidents’ employment is explicitly governed by BOR policies.

May 9, 2012. Tricoli also had a right to be voted on by the Board as to whether his contract would be renewed under BOR Policy 2.4.1.  Huckaby violated that right by not even presenting Tricoli’s name for re-appointment consideration at the Board’s May 2012 meeting, as reflected in the May 9 meeting minutes.

The manner of Tricoli’s ouster, in violation of applicable BOR policies, in which his coerced resignation was not acknowledged but he was purportedly non-renewed by the Board, denied him of hearing rights to which he otherwise would have been entitled if otherwise terminated for cause under BOR Policy 2.4.3.

The manner of Tricoli’s ouster also denied him his eligibility, as a president who had served at least five years, for two year’s compensation upon departure under BOR Policy 2.4.4.

May 10, 2012. On this date the USG began its own investigation of the budget crisis at GPC, replacing a regularly-scheduled state audit. As noted above, this investigation began the same day Tricoli was given notice of termination. As also reported in the timeline, this “Special Report” overlooked voluminous documentation of criminal activity. The results were released in September 2012.

June 2012. Upon Tricoli’s ouster, Rob Watts was placed in the position of GPC interim president in May of 2012. As such, the Special Report was prepared for Watts’ review.  Much of the criminal activity that is documented in this timeline comes from emails between GPC and USG budget staff. One of Watts’ first acts as interim GPC president was to order all GPC vice presidents to purge emails from the Tricoli administration. This attempted destruction of evidence was reported by one of the vice presidents and, upon objection by Tricoli’s counsel, the Attorney General sent GPC a letter warning against implementation of Watts’ illegal directive.

However, the Attorney General has undertaken no investigation of these matters, despite the readily available documentation. In fact, the Attorney General has misrepresented that there is no evidence of criminal activity in order to oppose requests for an independent investigation.

The USG and Georgia Attorney General, when they determined that there was no evidence crimes were committed in connection with the GPC budget crisis, had all the same documentation referenced in this timeline available to them. This documentation on its face supports a different conclusion: that official GPC budget reports of Georgia Perimeter College, a state agency, were knowingly and willfully falsified and affirmatively misrepresented, and that material information was knowingly and willfully concealed, in violation of OCGA 16-10-20 & 16-10-8, resulting in $16 million in overspending ($9 million of which has never been accounted for), the loss of 300 jobs, a drop in enrollment by several thousand students per semester, extensive negative publicity for the school, and the destruction of the career of one of the USG’s “rising stars”—Anthony Tricoli, who has never been able to obtain another job in higher education after being publicly blamed by the USG for all this damage.

Other possible criminal violations are documented in the record. Those include concealment of GPC payments of up to $1.5 million. However, those other crimes are beyond the scope of this timeline, which concentrates strictly on the knowing falsification of budget reports to President Tricoli and to other GPC management outside of Carruth’s department, and the knowing concealment of this information by the USG—which violated BOR Policy as well as criminal statutes in effecting Tricoli’s termination on fraudulent grounds.

The Attorney General of Georgia has refused to investigate any of this available documentation, on which the timeline is based, that supports the allegations of criminal actions. In fact, the Attorney General is defending Carruth and others in a civil lawsuit brought by Anthony Tricoli. Governor Nathan Deal has not responded to repeated requests to appoint an independent special investigator. 

FOOTNOTES

1 The USG review, titled the “Special Report,” also affirmed the USG decision to lay blame on GPC President Anthony Tricoli, who was removed from office immediately, prior to any investigation of the 2012 financial crisis.

2 The $20 million reserves had been explicitly ordered by President Tricoli after the budget crisis Tricoli inherited when he assumed the presidency in 2006 was resolved by almost doubling enrollment and tuition revenues, which created a large budget surplus.

 3 A person who knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact; makes a false, fictitious, or fraudulent statement or representation; or makes or uses any false writing or document, knowing the same to contain any false, fictitious, or fraudulent statement or entry, in any matter within the jurisdiction of any department or agency of state government or of the government of any county, city, or other political subdivision of this state shall, upon conviction thereof, be punished by a fine of not more than $1,000.00 or by imprisonment for not less than one nor more than five years, or both.

 4 An officer or employee of the state or any political subdivision thereof or other person authorized by law to make or give a certificate or other writing who knowingly makes and delivers such a certificate or writing containing any statement which he knows to be false shall, upon conviction thereof, be punished by imprisonment for not less than one nor more than five years.

5 Information on the depletion of the GPC auxiliary reserve funds was withheld by VP of Finance Ron Carruth for over a year, at a minimum, according to the available documents described in this timeline. It is possible that such knowledge was withheld and misrepresented for a longer period of time.

6 Policy 302 states, in part: “The Executive Vice President for Financial and Administrative Affairs shall inform the President of any expenditure trends that may affect the College’s ability to live within its budget, any changes in revenue that were not anticipated in the original budget, and any external conditions that may require adjusting expenditures. The President will decide if mid-year budget adjustments are necessary. “

7 The USG review implied fault by President Tricoli for not attending the exit interview with state auditors at which these negative balances were noted. However, USG policy in place at the time called for EVP Carruth and his budget staff to attend the interview—not the president. After the GPC budget fiasco of 2012, the USG changed its policy to bring the president of USG institutions into these conferences. Thus the implication of fault, based on an after-the-fact policy change, is misplaced.

Court Documents and summaries

Court of Appeals effectively repeals Georgia RICO Act

Tricoli Motion for Reconsideration Ga Ct App A15A2256 –

MFR-NT Ga Ct App order denying Tricoli appeal highlight

Updated pdf appeals court denies reconsideration

Ga Ct App order denying Tricoli appeal

 

About The Author

4 Comments

  1. Dr. Tricoli got screwed June 8, 2016 Reply
  2. Timeline Clarifies Crimes by USG May 11, 2016 Reply
  3. Acacia Sanchez May 8, 2016 Reply
    • majii May 20, 2016

Reply