By Eugene Vilensky
After leaving the University of Louisville at the end of spring 2002, Dr. John Shumaker became the second-highest-paid president of a public university at the University of Tennessee. Less than a year and a half later, he resigned amid a scandal that included unauthorized travel expenses, questionable business dealings, and accusations that he was fraudulently selected for the top job.
Although the University of Tennessee provided a personal airplane for Shumaker and paid for flights on commercial airlines, his frequent personal trips to the Birmingham, Ala., where former U of L Provost Carol Garrison is president of the University of Alabama at Birmingham, and frequent trips to Louisville related to his divorce trial were billed to UT at taxpayers’ expense.
Shortly before his resignation on August 8, Shumaker reimbursed UT $34,747.51 in personal expenses, hoping to stem the criticism that endured since the story broke in early July. The gesture did not forestall an exhaustive audit of his personal expenses.
An audit ordered on July 15 by the vice-chairman of the UT Board of Trustees revealed that Shumaker’s personal trips totaled $23,029.08. The auditors identified four trips between June 1, 2002 and June 30, 2003 that were “entirely or primarily personal” and 14 trips that combined personal and university business in a way that forced additional expenses on UT. Seven other trips were identified as “partly personal in nature” but did not incur any additional costs to UT.
There’s no place like home
Shumaker spent lavishly on his university mansion. He ordered $493,137 in renovations and furnishings, less than a year after it underwent a $787,597 renovation. In order to prevent having ‘to store his clothes in several closets throughout the house,’ a $97,350 sun room and closet was added to the house. The Associated Press reported that some expenditures were able to circumvent state review requirements by splitting projects into smaller parts. $77,270 of UT’s money was used to turn the mansion”s third floor into two bedrooms for his sons.
At UT’s expense, Shumaker purchased two ‘entertainment systems,’ each for $7,400 so guests ‘could watch sporting events,’ according to the audit.
A Persian rug, at $7,000, was purchased by an interior decorator. The audit noted that Shumaker ‘liked it very much’ and expected it to appreciate in value. After the president”s office reported that a provided $169 grill was ‘not acceptable,’ Shumaker bought a gas grill costing $4,822. Before purchasing the grill, the university paid $500 for a one-week”s grill rental.
The Fishman connection
Tennessee legislators continue to hold hearings probing the full extent of Shumaker”s impropriety. A no-bid contract awarded to a friend in Washington, D.C. is under currently fire, with auditors recommending its immediate termination ‘in a method most beneficial to the university.’ According to the audit, the contract awarded to Shumaker’s friend, Washington-based attorney Charles Fishman, ‘was improperly classified as a legal services contract,’ and thus avoided the legally required bidding process.
Shumaker and Fishman, whose dealings date back to Shumaker’s seven years at U of L, planned to partner the UT with a Chinese company to create an American-style high school in China. The for-profit school would then help funnel Chinese students to Tennessee universities. As the deal in China fell apart, an account under Shumaker’s control funded by unrestricted donations paid Fishman $287,873.87 as of June 30, despite that none of their plans moved past the early discussion phase. The audit noted that Shumaker, former wife Lucy Shumaker and Fishman created a private company in 1997 called American International Education Group,’to devise a way to attract private capital for colleges to develop international for-profit programs.’ Shumaker was president of U of L at the time. Shumaker told auditor the company was never able to raise enough money to operate. Because the company was not in existence at the time Fishman was given the contract, Shumaker was not legally required to disclose the potential conflict of interest, the audit states.
‘Once he began negotiations with Mr. Fishman, however, it would have been appropriate for Dr. Shumaker to have disclosed their previous business relationship,’ according to the audit.
Old friends and colleagues
An auditor testified on August 21 before the Tennessee legislature’s Fiscal Review Committee that a calendar documenting Shumaker’s travels was altered prior to the internal audit that catalyzed Shumaker’s resignation.
UT auditor Mark Paganelli told lawmakers that a digital calendar that tracked Shumaker’s travels was altered and did not match newly discovered records. Paganelli said some of Shumaker’s numerous personal trips were included in the deleted information.
UT staff discovered the additional trips to Arkansas and Birmingham, Ala. while clearing out Shumaker”s desk after his resignation.
Shumaker’s former chief of staff, Dr. Cathy Cole, apologized before the legislature. She had authorized Shumaker’s use of her procurement card, which allowed Shumaker to spent more than the $2,000 single-item limit.
According to the Nashville City Paper, Paganelli said Cole was reluctant to provide correct information regarding their use of procurement cards.
Paganelli also described an instance in which Shumaker lied about spending three nights in a hotel with former U of L Provost Carol Garrison.
When a hotel room receipt showed up with Garrison’s name on it, Shumaker said that Garrison wasn’t able to make it to a conference, and ended up walking in the rain. Shumaker said he let her have his hotel room while he stayed with a friend. Later Shumaker said that was a lie.
‘I think it’s a continued system of excesses that are just almost beyond belief with taxpayer money and money needed for education when education was being cut,’ state Sen. Steve Cohen, a member of the Fiscal Review Committee, told The Tennessean.
According to the Knoxville News Sentinel, Garrison admitted to the affair in a statement Thursday. ‘My relationship with John Shumaker at the University of Louisville was professional. Our relationship now is personal, and has been no secret, as he has attended a number of Birmingham and UAB events.’
