What a long, strange ethical trip it’s been for the Ramblin’ Wreck.
Ten years ago this month, I sat in a federal courtroom and watched a Georgia Tech employee get sentenced for stealing $316,000 with her university P-card.
Her theft was audacious and prodigious, purchasing 3,800 separate items including a popcorn machine, a wide-screen TV, robotic vacuums, a treadmill, a metal detector and Auburn University football tickets. Donna Gamble got 32 months in prison.
Outside court, Jimmy Berry, her attorney, shrugged when asked why. “People get away with things and they mushroom,” he ventured. “She did it a few times, there were no checks and balances at the school and it took off from there.”
The next year, in 2009, Tech employee Michelle Harris got 10 years from a Fulton County judge for pilfering $170,000 with her P-card.
The university vowed it would tighten up.
But in 2013, an audit found three more Techies abusing their cards. Later on, there were even more, including three who were slapped in handcuffs. They were smart guys with good jobs and worked at the Georgia Tech Research Institute, the school’s research arm where all sorts of cool and practical science occurs. The estimated fraud of these geniuses topped $1.5 million, enough to fill a classroom with robots.
Their haul: two four-wheelers, two Sony 52-inch flat-screens, Apple computers, iPads, OtterBox protective cases, iPods, Kindle E-readers, Leica and Nikon cameras, video cameras, a pinhole video camcorder pen, a night vision monocular, Bose headphones, a 3D printer and sports watches with heart-rate monitors. It’s like an illegal shopping spree at Best Buy!
In 2014, WSB-TV’s Richard Belcher ran a story saying “state auditors who look at all agencies gave Tech one of the lowest compliance scores they have ever handed out.”
Tech flunked this exam, scoring 74 percent. Most other agencies were well above 90.
OK, OK, we’re really paying attention now! said Tech’s brain trust.
An internal Tech probe found that “the absence of the appropriate support, tone and messaging as related to compliance contributes to an environment in which various ‘red flags’ for malfeasance were not adequately addressed.” Also, it said those in charge of enforcing these policies often did not feel supported when raising issues.
On Oct. 31, 2014, Steve Swant, Tech’s Executive VP for Administration and Finance, who sat just one rung below President Bud Peterson, unveiled an ethics and compliance org chart to keep tabs on employees who might have a glimmer of larceny in their eyes.
Three weeks later, Swant was in Hong Kong attending a seminar and hobnobbing with execs from a German tech firm, RIB, to serve on its board of directors. RIB develops software for construction projects and was doing business with Georgia Tech Research Corp (GTRC).
Under Swant’s guidance — and even a bit of old-fashioned, in-house bullying — RIB went on to snag more business at Tech. I know this because it was all spelled out in a recently released audit that led to Swant’s firing for a conflict of interest.
The audit noted several instances where Swant, who according to his personnel file earned $495,000, shepherded and pushed employees to favor RIB, which received more than $1.1 million in additional business.
The audit that spanked Swant was one of three Tech released the same afternoon in late July. Peterson said he is making changes, including having the internal auditor report directly to him.
One audit released looked at $1.1 million in tax money being spent in 2016 and 2017 to raise the “morale” of employees at GTRI — workers who already should have great morale because they have darned good jobs.
The audit was spurred by a WSB report detailing morale builders like trips to the Georgia Aquarium, a picnic at Six Flags, a Braves game, go-kart racing as well as cocktails, beer and wine.
At first, Tech officials quickly noted that the spending included no state money. They were correct. It was federal money.
The head of GTRI, Andrew Gerber, was demoted and later resigned.
Patrick McKenna, a Tech official who was involved in reviewing Swant’s request to be a paid board member of one of its vendors, is also retiring, officials announced Friday. Tech officials say his retirement is not connected to the investigation.
Finally, the third audit targeted the wily crew over at Tech’s Campus Services division, headed by VP Paul Strouts, who, fittingly, was a direct report to Swant.
Strouts, who earned $279,000, came to Tech in 2012 and a year later hit up Barnes & Noble, which ran the school’s bookstore, for a $35,000 a year “donation” to rent a GT football suite. “The ‘donation’ would be a requirement tied to the bookstore contract,” the audit stated. And the skybox? It was for “student outreach.”
I can tell you that when vendors are asked about “donations” by those who have a say in their contract, things are gonna get weird.
As it turns out, not many youths were “reached” in this arrangement. Over five years, and 34 games, students were accorded just 14 percent of the seats. Tech employees, relatives and friends got 39 percent of the tickets (Strouts and his buds got 10 percent). Barnes & Noble got 42 percent.
But what may be the icing on the audit cake was a fellow named Tom Stipes (a friend of Strouts) who was hired to be something called Director of Digital Networks. The job description was fuzzy, so he spent the first year doing a feasibility study looking into what he should be doing.
He did well at studying himself, it seems, because he got a $25,000 retention bonus and a $50,000 salary bump, ending up at $150K per annum. Auditors, however, were unable to grasp the synergy involved. “We were not able to identify a clear set of accomplishments during this time period,” the author’s wrote.
The state attorney general’s office is looking at the cases. Both Strouts and Stipes have resigned.
My money has it that the City of Atlanta will be snapping them right up.
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