Four top officials of Georgia Tech are out after internal reviews found they had improper relationships with vendors, misused resources or violated other ethics rules or state laws.
Vice President of Campus Services Paul Strouts, Parking and Transportation Services Executive Director Lance Lunsway and Director of Digital Networks Tom Stipes resigned as Georgia Tech auditors investigated allegations about them.
Strouts was accused of requiring the vendor with the campus bookstore contract to give $35,000 a year for a football stadium suite primarily used for Campus Services vendors and employees, as well as by Strouts’ friends and family members, and asking another vendor for use of its suite to entertain former colleagues, friends and family. Strouts also was accused of telling subordinates to override authority to approve raises and to improperly divert funds.
He and Lunsway also golfed regularly with vendors on Georgia Tech time, creating the appearance of conflicts of interest, the report found. In addition, Lunsway did private consulting work on Georgia Tech time, the report says.
The auditor also found that Strouts created Stipes’ job due to their personal friendship. After Stipes first year, he was promoted and given a $50,000 raise. “However, we were not able to identify a clear set of accomplishments during this time period,” the report, dated July 26, says.
Also out is Executive Vice President of Administration and Finance Steven C. Swant. The university announced earlier this month that Swant would no longer serve in that role and that Georgia Tech President G.P. “Bud” Peterson would assume Swant’s responsibilities until a replacement could be named.
The day before his departure was announced, Peterson was told in a letter from a Board of Regents official that Swant, whose division selects vendors, should not have also served on the board of directors of a vendor. University resources were improperly used to promote the vendor and Tech employees were improperly pressured to use the vendor’s services, Peterson was advised.
In June, another top administrator resigned following an investigation by Channel 2 Action News that found Georgia Tech Research Institute, the applied research division of Georgia Tech, spent more than $1 million on “morale” events for employees and their families.
The spending included paying for visits to Georgia Aquarium, Six Flags Over Georgia, a Braves game, and go-kart, laser tag and golf outings, the station reported.
Results of a special review of those concerns were flagged to Peterson in late May. He was told that immediate action should be taken to address issues at the research institute that led to his office not being notified of concerns about the morale expenditures.
“It appears that responsible, senior officials who were aware of the expenditures failed to accept responsibility for determining what was appropriate,” Peterson was told. “Senior leaders all have a duty to exercise good judgment to protect the image and integrity of Georgia Tech.”
Among the changes Peterson was advised to consider was implementing an “ethics audit” or similar assessment – perhaps using external resources – to thoroughly assess the ethical tone across all of Georgia Tech.
Peterson was also advised to consider having GTRI’s ethics and compliance officer be positioned outside the GTRI management structure and to have Georgia Tech’s institutional chief auditor report directly to him and to the USG Vice Chancellor for Internal Audit.
“This will help to ensure that potential risks are raised with your office directly and timely so you can ensure your senior officials are handling matters appropriately and that the system office is properly engaged,” wrote John M. Fuchko III, vice chancellor for organizational effectiveness.
After WSB broke the story about the morale expenditures in late April, Georgia Tech had issued statements defending use of the money. Later it said it would review future morale fund expenditures. Then on June 5, the university announced that Andrew Gerber, who was paid about $400,000 a year to head the institute, was stepping down.
Fuchko said that problems discovered in the special review contributed to Georgia Tech’s initial response that implied support for the morale expenditures from both internal audit and ethics and compliance, even though both had raised concerns about the expenditures.
One issue the review found is whether the GTRI ethics and compliance officer has the necessary authority or access to raise significant concerns within GTRI.
Another issue involves nepotism. In 2017, Dr. Bo Rotolini was appointed deputy director, Finance, Operations & Information Systems, even though his spouse is employed within his division. GTRI leadership knew that directly violated board policy and authorized the move, the review found.
The review noted that GTRI has had concerns in years past about misconduct.
In 2016, three GTRI employees were indicted on federal charges involving using Georgia Tech purchasing cards for personal expenses and fraud involving consulting activities.
The charges against James G. Maloney, GTRI’s principal research engineer, are still pending.
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