* Compensation for using non-profit to market his books
* Charity’s core mission to educate poor Afghans, Pakistanis
* Agreement also calls for new board to run the charity
(Adds finding on board members, city where charity is based)
By Lori Grannis
MISSOULA, Mont., April 5 (Reuters) – “Three Cups of Tea”
author Greg Mortenson has agreed to pay $1 million to compensate
his Montana-based charity for using the non-profit to promote
and buy copies of his books, a report from the state attorney
general said on Thursday.
The settlement between Mortenson, leaders of the Central
Asia Institute charity he founded and Montana officials allows
the organization to continue providing education to impoverished
communities in Pakistan and Afghanistan.
But it marks a setback for an author and philanthropist once
widely celebrated for his work.
The office of Montana Attorney General Steve Bullock said
its investigation, launched in April 2011 in the wake of a “60
Minutes” report that suggested Mortenson fabricated parts of his
book “Three Cups of Tea” and reaped benefits from the charity.
Bullock’s office found the Central Asia Institute had spent
nearly $4 million since 2006 to buy copies of his books “Three
Cups of Tea” and “Stones Into Schools.”
The purchases generated royalties for Mortenson, and
although he had agreed to provide a contribution to the Central
Asia Institute equal to the amount of royalty payments he
received from book purchases, he had not done so as of April
2011, the attorney general report found.
He also collected money from CAI for travel expenses related
to his lucrative speaking engagements, and the charity spent
about $4.9 million to promote the two books, the report said.
CAI’s mission is to advance literacy and education in
Central Asia, especially for girls, and it has funded the
construction and operation of schools in the region.
“The humanitarian efforts of Greg Mortenson and CAI are
impressive, and even the greatest detractors would admit that
together they’ve accomplished a tremendous amount to further
education in Pakistan and Afghanistan,” Bullock told reporters.
But Bullock, who has authority under Montana state law to
oversee and regulate charities, said lapses in CAI oversight
cannot be ignored. The investigation could have resulted in
state officials dissolving the charity if a settlement had not
been reached.
“When charities take money given for specific purposes, it’s
essential it’s spent as intended, otherwise public trust is
eroded and tough to restore,” Bullock said.
INSPIRED BY VILLAGERS
The report from Bullock said his office did not probe
allegations of fabrications or narratives in Mortenson’s book
that were raised by the “60 Minutes” piece.
The book describes Mortenson’s unsuccessful attempt to climb
the 28,251-foot (8,611-metre) K2 in South Asia and his encounter
with impoverished Pakistani villagers who he said inspired him
to build schools and other projects in the region.
The “60 Minutes” report disputed Mortenson’s account in
“Three Cups of Tea” of being kidnapped in the Waziristan region
of Pakistan in 1996. The show interviewed people who knew
Mortenson or met him in South Asia.
Mortenson’s charity received $100,000 from President Barack
Obama’s $1.4 million Nobel Peace Prize award that Obama won in
2009. The author and philanthropist received other support from
high profile backers and took numerous awards before the April
2011 “60 Minutes” report.
Mortenson defended his account in “Three Cups of Tea” in a
statement to Montana newspaper the Bozeman Daily Chronicle
around the time the “60 Minutes” piece aired. “I stand by the
information conveyed in my book,” he said.
Karin Ronnow, a spokeswoman for the Central Asia Institute,
stressed that the attorney general was not investigating
allegations about the book’s narrative.
Mortenson in June 2011 underwent open heart surgery to
repair a large hole in his heart, and he temporarily stepped
down as executive director of the organization. In late 2011, he
permanently gave up the position, Ronnow said.
“He’ll always be our founder – he’s the heart and soul and
he’s not going anywhere. And thank God,” she said.
Under the settlement with the Montana attorney general,
Mortenson will remain with CAI, based in Bozeman, Montana, and
stay on the organization’s board but as a non-voting member.
The agreement also calls for a new board to run the charity,
based on a finding that it failed to fulfill some of its
responsibilities in handling the relationship between the
charity and Mortenson.
(Writing by Alex Dobuzinskis; Editing by Jackie Frank)
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