Financial problems cue job change

by Kristin Gustafson

Following a six-week review, the University reassigned the fiscal responsibilities of its treasurer, who is also the associate vice president of treasury operations, and will not renew her contract.
Effective today, key areas of Georgina Stephens’ University responsibilities — finances and real estate — will be reassigned. Stephens was put on paid leave in October as the University reviewed her personal bankruptcy, foreclosure and other legal matters.
“Her entire portfolio that she had at the time she went on administrative leave is being reassigned,” said Tonya Moten Brown, University President Mark Yudof’s chief of staff. “She will have her title, but she will have new duties.”
The University will allow Stephens $124,000-a-year contract, which covers both aspects of her work, to expire June 30, Brown added.
Stephens’ personal legal issues raised questions about integrity and sparked the investigation in October.
While University officials found nothing amiss within the treasurers’ office, the University decided Stephens should continue her employment at the University, but in a different role, Brown said.
“This is not disciplinary,” Brown said. “We are not trying to say she did anything wrong about how she goes about her job.
“But this is a high-level position that I think requires the utmost in public confidence,” Brown said. “The issues … were of a very serious nature.”
Moving the money
Board of Regents chairwoman Patricia Spence said she decided to reassign Stephen’s treasurer responsibilities to Terrence O’Connor, the University’s controller. Stephens will keep her board-elected position in title only.
As treasurer, Stephens was responsible for $1.3 billion in cash and assets and for managing the University’s $533 million debt load. She managed about a dozen people in this capacity.
“I was very disappointed to learn of the problems, but relieved to learn there was no involvement in the financial responsibilities of the University,” Spence said.
“I think a lot of Georgina as a person,” Spence added, noting that the board praised her after her last board presentation in October. “We were shocked.”
University officials also decided to transfer Stephens’ associate vice presidential duties to nonfinancial organizational and planning work, Brown said.
As associate vice president of treasury operations, Stephens had 70 employees who reported directly to her. She managed the University’s bursar, risk management and U Card transactions. As she did before her administrative leave, Stephens will continue to report to Richard Pfutzenreuter, the University’s chief financial officer.
Legal battles
Stephens has been involved in a decade-long court battle over a loan on a St. Paul property. Within the past two years, she filed for protection from 32 creditors through Chapter 7 bankruptcy. Last summer, she filed for Chapter 13 bankruptcy, which set up a court-approved debt repayment schedule.
In 1996, a Ramsey County judge found one of the documents Stephens allegedly used in a 1989 real-estate transaction to be “a fake and a sham.”
This final court ruling, along with other rulings and litigation, concerned University officials, Brown said.
Stephens’ attorney, Karl Oliver of Roseville, said his client is “considering her options.” He said Stephens will use accrued vacation time rather than report to work this week.
“She’s very concerned this has harmed her reputation, and she’s been treated in a shabby and inappropriate manner,” Oliver said.
Oliver added that the case is an example of the University’s problems in retaining minority administrators. Stephens is black. McKinley Boston, one of the University’s top black administrators, resigned Nov. 19 after learning his contract would not be renewed because of academic misconduct occurring under his watch.
Stephens could not be reached for comment Sunday.
But in recent e-mail correspondence, Stephens voiced concerns about race and employment discrimination.
“I do believe race is an issue and that I was unfairly targeted,” Stephens wrote Nov. 20. “The University has a history of being hostile to black administrators and faculty.
“I raised the issue of a hostile work environment with (Yudof) this past winter, and I believe my administrative leave is related to this matter,” Stephens wrote then, saying the leave placed “a cloud of criminality” over her and injured her professional reputation.
When asked about Stephens’ concerns, Brown said the issues were completely independent.
“It came up in a completely different nature,” Brown said. “Those issues (Stephens) is referring to happened a long time ago, and there is no correlation and no nexus between those two events.”
Spence said race was not an issue for her as she reviewed external litigation. “The documents kind of speak for themselves,” she said.
Stephens has also questioned the leave as a form of employment discrimination.
According to federal law, employers may not discriminate against employees based solely on bankruptcy.
“It is in the law and rarely comes up because it is a much more difficult burden for a person to show,” said Dave Light, senior managing editor of Consumer Bankruptcy News.
“This is one of those cases where it may happen if actions that were took were solely because of her bankruptcy then that would run afoul of bankruptcy law,” Light said. “The difficult thing is the person has to show that the action was solely because of … the bankruptcy.”
If there are other issues involved, such as fraudulent transfers or other bad faith actions, the federal law might not apply, Light said.
But Brown said bankruptcy was not the sole issue.
“For a person in a public institution of high profile in charge of significant resources for the University, I do think it would be natural for someone to be concerned,” she said.
— The Associated Press contributed to this report.
Kristin Gustafson covers University administration and welcomes comments at [email protected] She can also be reached at (612) 627-4070 x3211.