'Three Cups Of Tea' Author To Repay Charity

The Montana attorney general's office has reached a settlement with author and philanthropist Greg Mortenson, and his non-profit Central Asia Institute. While a year-long probe found "serious internal problems" in the charity's management, the attorney general says the settlement allows CAI to continue with what he describes as a "worthwhile" mission.

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In this country, the Montana Attorney General Office has reached a settlement with the writer Greg Mortenson. He's author of the book "Three Cups of Tea." Mortenson and his Montana-based non-profit, the Central Asia Institute came under scrutiny last year. You may recall this story. An author, another author, and "60 Minutes" accused Mortenson of mismanaging hundreds of thousands of dollars worth of funds, donated to help build schools in Afghanistan and Pakistan.

Well, a yearlong probe found serious internal problems in the charity's management, the state attorney general says the settlement allows Central Asia Institute to continue with what he describes as a worthwhile mission.

NPR's Allison Keyes reports.

ALLISON KEYES, BYLINE: People donated millions of dollars to Greg Mortenson's charity after reading his book about his work building schools for girls in Afghanistan and Pakistan. But last year, a "60 Minutes" investigation charged that the charismatic humanitarian and ex-mountain climber was using the charity's money for himself.

Montana's Attorney General, Steve Bullock, said yesterday CAI's work is impressive but...

STEVE BULLOCK: The failures cannot be ignored.

KEYES: Bullock says not only did Mortenson use charity money for personal items, including family vacations and charter flights, the board of directors didn't challenge him.

BULLOCK: Board members were too close to Mr. Mortensen. They did not operate at arm's length, and they failed to exercise the degree of oversight required.

KEYES: Under the settlement Mortenson will have to pay more than a million dollars in restitution within three years. He's resigned as executive director, but he can stay with the charity as long as he no longer oversees its finances. Two board members who supported him must step down within a year, and a new board of no less than seven will be appointed.

KARIN RONNOW: We're pleased. We're relieved this has come to a conclusion.

KEYES: Karin Ronnow is CAI's communication director. And while she stresses that the attorney general found no evidence of criminal activity, she notes that dealing with money is not Mortenson's expertise.

RONNOW: He admits mistakes were made. He's on the record, also, as not being a financially-oriented or management - those aren't his strengths.

DANIEL BOROCHOFF: Unless I see a true independent board of responsible people that are not directly connected and aren't sycophants of Greg Mortenson, I'm not convinced.

KEYES: Daniel Borochoff is president of Charity Watch, and was among the first to raise red flags about the charity's financial dealings.

Harvard business school Professor, Alnoor Ebrahim, agrees with his assessment.

ALNOOR EBRAHIM: You really want a board, ideally, to serve a public purpose, a board that is going to be willing to challenge the leadership on the organization instead of acquiescing.

KEYES: But Central Asia Institute spokeswoman Karin Ronnow says not only will existing board members help chose the new ones, anyone who thinks that's a problem doesn't understand the outgoing board member's commitment to the charity's mission.

The attorney general's office says it will monitor the charity for three years to ensure compliance.

Allison Keyes, NPR News.

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