Montana’s AG Wants ‘Tea’

April 22, 2011       Mark Hrywna      

The Montana Attorney General’s Office is looking into the operations of a charity after a scathing report by “60 Minutes” that has the nonprofit sector abuzz.

The report included allegations that author Greg Mortenson fabricated portions of his nonfiction books, “Three Cups of Tea” and “Stones To Schools,” which detailed trips to Afghanistan and Pakistan during the 1990s. He co-authored the books with writer David Oliver Relin and co-founded the Bozeman, Mont.-based Central Asia Institute (CAI) in 1996 to build schools in the two nations. The report also raised questions about the charity’s spending to promote his books as well as how many schools have actually been built and used.

“As Montana’s attorney general, I have the authority to oversee nonprofit corporations on behalf of the public. In recent days, concerns have been raised about the management and financial affairs of the Central Asia Institute,” Montana Attorney General Steve Bullock said in a statement. “I’ve been in contact with attorneys for the Institute and they have pledged their full cooperation in addressing our concerns. While looking into this issue, my office will not jump to any conclusions – but we have a responsibility to make sure charitable assets are used for their intended purposes,” he said.

A spokesman for the AG’s office described it as an inquiry but had no timeline.

In a statement prior to Sunday’s broadcast, the CAI’s four-member board, which includes Mortenson, said that an attorney hired last year to analyze potential “excess benefits” to Mortenson concluded that CAI “appropriately receives a greater benefit from Greg’s activities than Greg does himself.

”While CAI has been around since 1996, it has seen tremendous growth since the book was published in 2006. Total revenue was about $1 million annually, growing to $1.6 million in 2006 and almost $4 million in 2007, before taking off in 2008 and 2009, to $13 million and $14 million, respectively. As executive director, Mortenson earned total compensation of $180,747 in the most recent tax year, ending September 2009. — Mark Hrywna

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