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http://www.dailybulletin.com/Stories/0,1413,203~21481~1438337,00.html
Western University execs under fire
Records show loans, advances exceeded $400,000 to top school officials
By WILL MATTHEWS
STAFF WRITER
POMONA ? Top executives at Western University of Health Sciences have given themselves more than $400,000 in cash advances on salaries and zero-interest loans since 1981, according to university documents.
University President Philip Pumerantz approved more than $250,000 worth of salary advances for himself between 1981 and 1990, according to documents made public this week within a court filing by a former school official who was fired after alleging financial improprieties at the university.
By 1991, Pumerantz had repaid the university most of that amount, but during the 1990s he received at least $74,000 in additional salary advances, according to the documents.
By the end of 1999, Pumerantz owed the university more than $60,000, documents show.
Pumerantz refused to be interviewed Thursday about executive salary advances and loans.
In a statement released Thursday by the university, Pumerantz said Western adheres to the highest standard of financial practices.
"The university takes any allegations about financial reporting very seriously, and rigorous practices are in place to ensure the integrity of university financial practices," Pumerantz said in the statement.
Supervising Deputy Attorney General Jim Cordi said he could not comment on the Western University case, but said loans from a non-profit organization to any of its trustees, officers or directors are against state and federal law.
"There are no prohibitions against making loans to employees, but giving loans to officers and trustees is prohibited," Cordi said. "Directors and officers are in a position to control the corporation, and they could possibly take advantage of that control."
Cordi said this week that he could not discuss whether his office is investigating Western's financial practices as a matter of department policy.
Pumerantz is the founding president of the school, which opened in a small East Second Street storefront in 1977 and has since expanded to take up a large part of East Second Street.
Mark L. Wallace, Western's executive director of communications, said this week that the university had a practice in place through 1999 in which top employees could take loans against the dollar value of accumulated vacation time.
"That is not a practice at Western anymore," Wallace said this week.
The internal university documents were made public as part of a court filing by the school's former director of human resources, Sinclair Hugh. They include memos from top executives to the school's payroll department requesting -- and approving -- the loans as well as an itemized list of the cash advances extended to Pumerantz.
Hugh, who was hired by the university in 1999, was fired in April after he alleged to the state Attorney General and the Internal Revenue Service that Pumerantz and others had engaged in financial practices that Hugh believed to be unethical and a violation of state and federal laws.
He has sued the university for unfair termination, believing he was fired for blowing the whistle on decades of financial improprieties.
"What these people have been doing is taking money that is not theirs and and using it for personal use," said Russ Thomas, an Irvine-based attorney representing Hugh. "These are funds donated by people who think the money was going to be used by the school. Instead, the money was used for personal reasons, for things the money shouldn't have been used for."
Craig Lenz, dean of Western's School of Osteopathic Medicine, has also filed complaints with the Attorney General and the IRS alleging financial impropriety.
Western has filed a lawsuit against Hugh, alleging he has knowingly made false accusations against the university in an effort to defame its reputation.
Though Pumerantz was the recipient of the biggest salary advances, university records show that at least two other top executives - neither still working for Western - also received tens of thousands of dollars in no-interest loans from the university, all characterized as "salary advances."
Stuart Wiener, Western's former executive vice president of finance and administration, approved for himself salary advances of more than $65,000 between 1989 and 1997, university records show.
An internal university memo, dated Dec. 2, 1991, shows that Wiener agreed to pay back the money at a rate of $50 per pay period.
Reached by phone Thursday at his Riverside home, Wiener refused to comment.
Internal university documents also show that Marlene Miller, Western's former vice president of facilities and human resources, received $15,700 in advances between 1982 and 1990 and paid back $9,900 by Aug. 29, 1991.
Between 1991 and 1997, Miller approved for herself over $38,000 in salary advances, records show.
Miller did not return phone calls Thursday to her Ontario home.
A Feb. 6, 1998 memo from Miller to Wiener shows that Miller requested to reduce her repayments to Western from $50 per pay period to $5 per pay period.
Wiener approved the request, records show.
Wallace refused to discuss when Wiener and Miller left the university or whether they repaid all of their outstanding debt.
An internal memo from Wiener to the university's business office also shows the university agreeing to pay all of Miller's Social Security taxes, including both her employee portion and the college's normal employers' portion.
In its financial statements filed with the IRS for the 1998 fiscal year, university officials said they did not engage in any loaning of money or other extensions of credit to any trustees, directors, officers, creators, key employees or members of their families.
University records show that Pumerantz approved for himself an $8,000 salary advance on April 10, 1998.
Wallace said the university's filings for additional years were in storage and could not be immediately provided.
Warren Lawless, chairman of Western's Board of Trustees, said Friday that he has no reason to doubt the integrity of Pumerantz or any other top university official, and that he believes the financial practices of the university have been both ethical and legal.
"I do know for one thing that we have satisfied the IRS (between 1981 and 1999)," Lawless said. "All of our accounting has been very precisely audited, and we have met all of the standards and covenants required of us in terms of the bond holders for the indebtedness that we have incurred to construct the university. We have also been able to build from a single penny store to where we are now in just 25 years. That, I think, speaks for itself."
Will Matthews can be reached by e-mail at [email protected] or by phone at (909) 483-9333.
Western University execs under fire
Records show loans, advances exceeded $400,000 to top school officials
By WILL MATTHEWS
STAFF WRITER
POMONA ? Top executives at Western University of Health Sciences have given themselves more than $400,000 in cash advances on salaries and zero-interest loans since 1981, according to university documents.
University President Philip Pumerantz approved more than $250,000 worth of salary advances for himself between 1981 and 1990, according to documents made public this week within a court filing by a former school official who was fired after alleging financial improprieties at the university.
By 1991, Pumerantz had repaid the university most of that amount, but during the 1990s he received at least $74,000 in additional salary advances, according to the documents.
By the end of 1999, Pumerantz owed the university more than $60,000, documents show.
Pumerantz refused to be interviewed Thursday about executive salary advances and loans.
In a statement released Thursday by the university, Pumerantz said Western adheres to the highest standard of financial practices.
"The university takes any allegations about financial reporting very seriously, and rigorous practices are in place to ensure the integrity of university financial practices," Pumerantz said in the statement.
Supervising Deputy Attorney General Jim Cordi said he could not comment on the Western University case, but said loans from a non-profit organization to any of its trustees, officers or directors are against state and federal law.
"There are no prohibitions against making loans to employees, but giving loans to officers and trustees is prohibited," Cordi said. "Directors and officers are in a position to control the corporation, and they could possibly take advantage of that control."
Cordi said this week that he could not discuss whether his office is investigating Western's financial practices as a matter of department policy.
Pumerantz is the founding president of the school, which opened in a small East Second Street storefront in 1977 and has since expanded to take up a large part of East Second Street.
Mark L. Wallace, Western's executive director of communications, said this week that the university had a practice in place through 1999 in which top employees could take loans against the dollar value of accumulated vacation time.
"That is not a practice at Western anymore," Wallace said this week.
The internal university documents were made public as part of a court filing by the school's former director of human resources, Sinclair Hugh. They include memos from top executives to the school's payroll department requesting -- and approving -- the loans as well as an itemized list of the cash advances extended to Pumerantz.
Hugh, who was hired by the university in 1999, was fired in April after he alleged to the state Attorney General and the Internal Revenue Service that Pumerantz and others had engaged in financial practices that Hugh believed to be unethical and a violation of state and federal laws.
He has sued the university for unfair termination, believing he was fired for blowing the whistle on decades of financial improprieties.
"What these people have been doing is taking money that is not theirs and and using it for personal use," said Russ Thomas, an Irvine-based attorney representing Hugh. "These are funds donated by people who think the money was going to be used by the school. Instead, the money was used for personal reasons, for things the money shouldn't have been used for."
Craig Lenz, dean of Western's School of Osteopathic Medicine, has also filed complaints with the Attorney General and the IRS alleging financial impropriety.
Western has filed a lawsuit against Hugh, alleging he has knowingly made false accusations against the university in an effort to defame its reputation.
Though Pumerantz was the recipient of the biggest salary advances, university records show that at least two other top executives - neither still working for Western - also received tens of thousands of dollars in no-interest loans from the university, all characterized as "salary advances."
Stuart Wiener, Western's former executive vice president of finance and administration, approved for himself salary advances of more than $65,000 between 1989 and 1997, university records show.
An internal university memo, dated Dec. 2, 1991, shows that Wiener agreed to pay back the money at a rate of $50 per pay period.
Reached by phone Thursday at his Riverside home, Wiener refused to comment.
Internal university documents also show that Marlene Miller, Western's former vice president of facilities and human resources, received $15,700 in advances between 1982 and 1990 and paid back $9,900 by Aug. 29, 1991.
Between 1991 and 1997, Miller approved for herself over $38,000 in salary advances, records show.
Miller did not return phone calls Thursday to her Ontario home.
A Feb. 6, 1998 memo from Miller to Wiener shows that Miller requested to reduce her repayments to Western from $50 per pay period to $5 per pay period.
Wiener approved the request, records show.
Wallace refused to discuss when Wiener and Miller left the university or whether they repaid all of their outstanding debt.
An internal memo from Wiener to the university's business office also shows the university agreeing to pay all of Miller's Social Security taxes, including both her employee portion and the college's normal employers' portion.
In its financial statements filed with the IRS for the 1998 fiscal year, university officials said they did not engage in any loaning of money or other extensions of credit to any trustees, directors, officers, creators, key employees or members of their families.
University records show that Pumerantz approved for himself an $8,000 salary advance on April 10, 1998.
Wallace said the university's filings for additional years were in storage and could not be immediately provided.
Warren Lawless, chairman of Western's Board of Trustees, said Friday that he has no reason to doubt the integrity of Pumerantz or any other top university official, and that he believes the financial practices of the university have been both ethical and legal.
"I do know for one thing that we have satisfied the IRS (between 1981 and 1999)," Lawless said. "All of our accounting has been very precisely audited, and we have met all of the standards and covenants required of us in terms of the bond holders for the indebtedness that we have incurred to construct the university. We have also been able to build from a single penny store to where we are now in just 25 years. That, I think, speaks for itself."
Will Matthews can be reached by e-mail at [email protected] or by phone at (909) 483-9333.
