Two high level Stony Brook officials received $300,000 each in housing loans from the Stony Brook Foundation (SBF) that they were not required to pay back, according to a recent New York State Comptroller’s report.
The Foundation’s 2014-15 tax filings also showed that it paid an additional $455,664 to cover the cost of taxes on these loans, bringing the total amount paid to the SBU officials to $1,055,664.
The tax-free “loans,” given to Senior Vice President for Advancement and Executive Director of the Stony Brook Foundation Dexter A. Bailey, Jr., and former Provost and Senior Vice President for Academic Affairs, Dennis Assanis, were discovered by a Feb. 26 audit from the New York State Comptroller’s Office, which scrutinized the oversight of various SUNY non-profit fundraising foundations.
Bailey declined to comment and Assanis could not be reached for comment.
The report outlines a litany of lapses and conflicts by SUNY foundations that resulted from a lack of regular oversight.
“SUNY does not regularly examine the foundations’ books, and my auditors found instances of questionable expenses,” New York State Comptroller Thomas DiNapoli stated in a press release. “SUNY administrators need to improve their oversight efforts to make sure billions of dollars are being handled properly.”
Stony Brook University President Samuel L. Stanley Jr. called the audit a “non-issue” at a University Senate meeting on Monday, March 5.
“I think a careful review shows that there was really nothing there,” he said, adding that the Foundation conducts its own internal audits every year through financial advisory service Grant Thornton.
In regards to the $300,000 payments, Stanley said the Foundation uses housing loans like these as a competitive recruitment tool.
“One of the biggest challenges we have is recruiting outstanding people to Stony Brook,” he said. “It’s a tremendous advantage if the Foundation can help kick in sometimes to do this.”
Such incentives have helped with retention as well, Stanley said, since the recipients are required to remain in their positions for five years in order to receive the full payment. While Stanley characterized the loans as standard practice approved by their internal auditors, the 2014-2015 audit report by Grant Thornton said mortgage loans should be limited to $50,000. The audit also said there were no loans reported that fiscal year under this program, but $900,000 in employee loans were reported in 2014.
The loans to SBU officials were just one example of practices questioned in the report.
SBF was one of 10 campus fundraising foundations operating without the required contracts with SUNY. Although its contract with SUNY ended in March 2015, SBF has not been audited by the SUNY Office of the University Auditor since 2007.
Despite this, Stanley claimed that the Foundation has continued to abide by the previous rules of the contract. The president assured that the Foundation was working to reestablish its contract with SUNY, noting that negotiations were currently underway. When asked why the negotiations have not reached a conclusion after nearly three years, Stanley declined to comment, stating it was “not standard to talk about that in public.”
SBF and the University of Buffalo Foundation lacked official guidelines for contract procurement. This allowed both foundations to award contracts on the basis of longstanding relationships or referrals rather than bidding.
Stanley took issue with this finding as well. Although exceptions were made for a few contracts, he noted that “The Stony Brook Foundation does competitive bidding for most of the contracts it has because they do want to get the best value.”
Despite maintaining a balance of more than $40 million, SBF also lacked an official policy for managing its agency account. This account is of particular interest to the campus community since it is used to collect and disburse student activity fees, club fees and all other non-state funds the Foundation collects from students, faculty and staff.
The Foundation also failed to report an affiliation between a board member who served on the foundation’s investment committee and a firm that provided the foundation with investment services on its 2015 conflict of interest disclosure.
When contacted, a representative from the Comptroller’s Office said although the Foundation’s actions may not be good business practice, they were not illegal.
R.Parks • Mar 12, 2018 at 11:34 am
There is so much more to this story! What about the 3 million plus dollars that was asked to be paid back to Bernie Madoff ‘s investors that the Stony Brook Foundation reaped benefits from their investment with BLMIS LLC? The Stony Brook Foundation refused to return that money while others had to forfeit their profits to investors who lost everything.
Who gave Bernie Madoff credibilty? James Simons, the Stony Brook Foundation and others who actually made out on their investments.
From the SBF’s 2014 990 Forn:
LOSS AND CONTINGENCY FROM BLMIS
In August 2010, the Foundation was informed by counsel for the trustee in the Bernard L. Madoff
Securities LLC (“BLMIS”) bankruptcy proceeding in the United States Bankruptcy Court (the “BLMIS
Trustee”) alleged that the Foundation received $3,135,671 more through redemptions from its account with
BLMIS than the principal the Foundation had invested with BLMIS. On December 2, 2010, the BLMIS
Trustee filed a lawsuit in the Bankruptcy court for the Southern District of New York seeking recovery of
this amount. The lawsuit does not accuse the Foundation or any of its employees of any wrongdoing. A
decision dated September 27, 2011 by United States District Court Judge Rakoff held that the Trustee’s
claims for funds withdrawn from BLMIS investment accounts are not subject to recovery by the Trustee to
the extent that the withdrawals occurred more than two years prior to the filing of the BLMIS bankruptcy
proceeding. All of the funds withdrawn by the Foundation from its BLMIS account occurred more than
two years prior to that filing. The District Court’s decision was affirmed by the United States Court of
Appeals for the Second Circuit and the United States Supreme Court denied the Trustee’s petition seeking
review by that court. On June 30, 2015, the BLMIS Trustee filed a Notice of Voluntary Dismissal with
Prejudice of Adversary Proceeding. The Notice of Dismissal concludes the pending litigation
This “SO SAD, TOO BAD” and “IGOT MINE” approach tells alot about this Foundation and no wonder they are so generous with “FREE” money!
I suppose President Stanley also thinks this is another “NON ISSUE.”
R.Parks • Mar 12, 2018 at 11:34 am
There is so much more to this story! What about the 3 million plus dollars that was asked to be paid back to Bernie Madoff ‘s investors that the Stony Brook Foundation reaped benefits from their investment with BLMIS LLC? The Stony Brook Foundation refused to return that money while others had to forfeit their profits to investors who lost everything.
Who gave Bernie Madoff credibilty? James Simons, the Stony Brook Foundation and others who actually made out on their investments.
From the SBF’s 2014 990 Forn:
LOSS AND CONTINGENCY FROM BLMIS
In August 2010, the Foundation was informed by counsel for the trustee in the Bernard L. Madoff
Securities LLC (“BLMIS”) bankruptcy proceeding in the United States Bankruptcy Court (the “BLMIS
Trustee”) alleged that the Foundation received $3,135,671 more through redemptions from its account with
BLMIS than the principal the Foundation had invested with BLMIS. On December 2, 2010, the BLMIS
Trustee filed a lawsuit in the Bankruptcy court for the Southern District of New York seeking recovery of
this amount. The lawsuit does not accuse the Foundation or any of its employees of any wrongdoing. A
decision dated September 27, 2011 by United States District Court Judge Rakoff held that the Trustee’s
claims for funds withdrawn from BLMIS investment accounts are not subject to recovery by the Trustee to
the extent that the withdrawals occurred more than two years prior to the filing of the BLMIS bankruptcy
proceeding. All of the funds withdrawn by the Foundation from its BLMIS account occurred more than
two years prior to that filing. The District Court’s decision was affirmed by the United States Court of
Appeals for the Second Circuit and the United States Supreme Court denied the Trustee’s petition seeking
review by that court. On June 30, 2015, the BLMIS Trustee filed a Notice of Voluntary Dismissal with
Prejudice of Adversary Proceeding. The Notice of Dismissal concludes the pending litigation
This “SO SAD, TOO BAD” and “IGOT MINE” approach tells alot about this Foundation and no wonder they are so generous with “FREE” money!
I suppose President Stanley also thinks this is another “NON ISSUE.”
R.Parks • Mar 12, 2018 at 11:34 am
There is so much more to this story! What about the 3 million plus dollars that was asked to be paid back to Bernie Madoff ‘s investors that the Stony Brook Foundation reaped benefits from their investment with BLMIS LLC? The Stony Brook Foundation refused to return that money while others had to forfeit their profits to investors who lost everything.
Who gave Bernie Madoff credibilty? James Simons, the Stony Brook Foundation and others who actually made out on their investments.
From the SBF’s 2014 990 Forn:
LOSS AND CONTINGENCY FROM BLMIS
In August 2010, the Foundation was informed by counsel for the trustee in the Bernard L. Madoff
Securities LLC (“BLMIS”) bankruptcy proceeding in the United States Bankruptcy Court (the “BLMIS
Trustee”) alleged that the Foundation received $3,135,671 more through redemptions from its account with
BLMIS than the principal the Foundation had invested with BLMIS. On December 2, 2010, the BLMIS
Trustee filed a lawsuit in the Bankruptcy court for the Southern District of New York seeking recovery of
this amount. The lawsuit does not accuse the Foundation or any of its employees of any wrongdoing. A
decision dated September 27, 2011 by United States District Court Judge Rakoff held that the Trustee’s
claims for funds withdrawn from BLMIS investment accounts are not subject to recovery by the Trustee to
the extent that the withdrawals occurred more than two years prior to the filing of the BLMIS bankruptcy
proceeding. All of the funds withdrawn by the Foundation from its BLMIS account occurred more than
two years prior to that filing. The District Court’s decision was affirmed by the United States Court of
Appeals for the Second Circuit and the United States Supreme Court denied the Trustee’s petition seeking
review by that court. On June 30, 2015, the BLMIS Trustee filed a Notice of Voluntary Dismissal with
Prejudice of Adversary Proceeding. The Notice of Dismissal concludes the pending litigation
This “SO SAD, TOO BAD” and “IGOT MINE” approach tells alot about this Foundation and no wonder they are so generous with “FREE” money!
I suppose President Stanley also thinks this is another “NON ISSUE.”