The Ohio Inspector General today (Tuesday) issued an investigation report finding an “appearance of impropriety” relating to a real-estate lease Ohio University signed for a home for former OU President Roderick McDavis in spring 2015.
The report – the result of an investigation spanning three-plus years – also found that roughly $20,000 in payments wrongfully went to OU donor and local landlord John Wharton for work on the South Side Athens home while it was listed for sale by Wharton. This was at the same time that McDavis and his wife were living in the home, with OU paying the rent.
The report lists seven recommendations for changes to university processes to prevent a situation like this from happening again. OU issued a media release today (Tuesday) after issuance of the report noting that the university has planned a press conference for this (Tuesday) afternoon.
“We have been cooperating with the Inspector General’s office regarding its review of Ohio University’s business practices for over three years, so we were anticipating the release of this report,” the release reads. “When we initially learned there were issues surrounding some of our practices in 2015, Ohio University immediately initiated its own internal review. We have implemented many positive process changes since then and continue to strive to employ best practices. Having only received the report today, we intend to give it our full attention in the coming weeks as we prepare a formal response.”
The OIG’s Office, according to the report, did not find wrongdoing by the university in a number of other areas related to this controversy outside of the areas listed above. Additionally, while the report does state that the case has been forwarded to the Ohio Auditor of State’s Office for “review and consideration,” it has not likewise been forwarded to the Ohio Attorney General’s Office or the local prosecutor’s office for consideration of criminal charges (that only happens on rare occasions after OIG reports).
The OIG’s office has been requesting records from OU since April 2015, just a month after the university entered into a lease-to-purchase agreement with Wharton for a home he owned at 31 Coventry Lane in Athens to house former President McDavis and his wife, Deborah. Wharton at the time was a frequent OU donor. The university almost bought the home from Wharton for about $1.15 million, but stepped away from the deal after news broke about Wharton apparently seeking to donate approximately $100,000 to Ohio Athletics in connection with the housing deal (which he never acted upon), while making good on a previous $100,000 pledge to OU Athletics.
The OIG found that it had “reasonable cause” to believe the appearance of impropriety occurred in the situation outlined above.
“The (OIG) determined Wharton had discussions with the Athletic Department about a conditional $100,000 donation contemporaneously to negotiations with the Real Estate Department about a lease agreement with a purchase option for a property owned by Wharton,” the report reads. “The (OIG) further determined that Wharton’s various relationships with university staff in conjunction with his history of donating to both Ohio University and the Ohio University Foundation provides the appearance that Wharton received preferential treatment by the university when they selected a property owned by him as a temporary residence for the McDavises.”
The OIG’s office found that because OU did not own 31 Coventry Lane and its lease of the home ended on June 30, 2017, roughly $20,000 in repairs the university funded for the “appearance” of Wharton’s property while the property was listed for sale should not have been made by the university.
“The OIG determined the university should not have paid Wharton totaling $20,449.84 for: Duplicate receipts and work orders ($249.19); landlord expenses ($369.53); replacement of the composite decking ($5,019.18); and the replacement of sod ($14,811.94).”
In total, the OIG found that “wrongful acts or omissions” occurred in the two situations listed above. However, the OIG did not find that “wrongful acts or omissions” occurred in other instances where the office investigated the university, including: Realtor referrals to Wharton by OU administration to new OU staffers; and a university lease for another property at 4 University Terrace negotiated by Wharton.
The OIG also found “no evidence” that McDavis, OU Athletics Director Jim Schaus or OU Athletics donor-relations staffer Ryan White had shared Wharton’s conversations regarding his potential $100,000 gift with any “members of the negotiating team” during negotiation of the lease for 31 Coventry Lane.