Re: Investigation of Central Asia Institute and Greg Mortenson
The story of Central Asia Institute and Greg Mortenson evokes notions of the best of our aspirations to do good and the generosity of the American public. It involves the efforts of a complicated person who has worked tirelessly on behalf of a noble pursuit, even while acting in a way that jeopardized that pursuit. The story also demonstrates how things can go wrong when officers and directors of a charitable organization fail to abide by fundamental principles of management and oversight.
Over the past 17 years, Mortenson, an author and mountaineer, has made it his life’s mission to promote peace through education in remote alpine regions of central Asia. During that time, Mortenson and the charity he co-founded, the Central Asia Institute, set out to arm the remote regions of Pakistan and Afghanistan with knowledge.
In his two books, “Three Cups of Tea” and “Stones into Schools,” Mortenson paints a picture of the significant difference his and CAI’s charitable work has made. These stories galvanized a global audience and thrust Mortenson and the nonprofit organization into the limelight. Due to his work, Mortenson was even named a finalist for the 2009 Nobel Peace Prize – the humanitarian equivalent of summiting Mount Everest.
Mortenson’s pursuits are noble and his achievements are important. However, serious internal problems in the management of CAI surfaced. As Attorney General, I’m tasked with overseeing nonprofit charities operating in Montana. Through our investigation, the Montana Department of Justice sought to determine whether Mortenson and the leadership of his organization had violated the law governing nonprofit corporations.
Our investigation centered on whether CAI’s officers and directors satisfied their legal duties with regard to Mortenson’s books and speaking engagements, and in managing the financial and operational affairs of the organization. We concluded that the board of directors failed to fulfill some of its important responsibilities in governing the nonprofit charity. Further, Mortenson failed to fulfill his responsibilities as executive director and as a member of the board.
Despite policies that committed him to do so, Mortenson failed to make contributions to CAI equal to the royalties he earned on the books the organization purchased. Nor did he and CAI devise an equitable way to split the costs to advertise and promote the book, which was required by his 2008 employment agreement. Mortenson also accepted travel fees from event sponsors at the same time that CAI was paying his travel costs. Moreover, he had significant lapses in judgment resulting in money donated to CAI being spent on personal items such as charter flights for family vacations, clothing and internet downloads.
Despite consistent and repeated warnings about a lack of financial controls for the money CAI spent abroad and here at home, the board of directors failed to close those gaps over a period of nearly ten years.
