Hi 60 / Lo 47
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Volume 71, Issue 68,
Tuesday, December 6, 2005
News Money fraud suit now in court Filed in 2001, HRM prof seeks charges against ex-dean By Ken Fountain
The trial for a four-year old whistleblower lawsuit filed by a professor against the University is set to begin today in a Harris County court. Stephen Barth, a professor in the Conrad N. Hilton College of Hotel and Restaurant Management, filed suit in July 2001 alleging that when he reported possible criminal actions by then-Dean Alan Stutts to University officials, Stutts retaliated against him. Barth further alleges that when he reported the retaliation, the University failed to stop it. Barth, who is also a hospitality industry attorney, alleges that a former business manager at the college, David Gilkeson, told Barth in April 1999 that Stutts was asking him to participate in "inappropriate and illicit financial transactions and expenditures." The lawsuit states that Gilkeson told Barth that Stutts was "falsifying government documents to justify inappropriate transfers of funds from positive account balances to negative account balances in order for Stutts to avoid explaining the negative balances" to the UH administration. The transfers of funds, totaling $506,900, were to and from an account of $5 million donated by the private Hilton Foundation for renovations to the University Hilton. The lawsuit further alleges that Gilkeson told Barth that Stutts was using a "money laundering scheme" to enter into an agreement with a New York public relations firm that bypassed UH procurement policies to comply with state law. The lawsuit also claims that Stutts used the same "money laundering scheme" to pay "hush money" to Jacques Fox, the former executive chef at the University Hilton. According to a UH Internal Audit Division report, while there had been violations of UH internal policies and contracting requirements, the Stutts administration had not violated any laws. Barth alleges in the complaint that when he reported the "suspected violations of law" to University administrators, in compliance with UH personnel regulations, Stutts systematically retaliated against him in violation of the Texas Whisteblower Act. According to the lawsuit, the retaliation took the form of arbitrary and capricious merit evaluations; denial of travel funds; excluding Barth from participation in the college's online graduate program; and defaming him in a letter to other HRM faculty members, among other things. Barth is seeking unspecified damages, including economic and punitive damages and attorney's fees. In the University's official answer to the lawsuit, officials gave a "general denial" of Barth's allegations and also argued that Barth failed to comply with the prerequisites under the Texas Whistleblower Act before filing suit. Stutts resigned from the deanship of the college in December 2001 as part of a mediated divorce settlement from his ex-wife, College of Education professor Yali Zou. Shortly afterward, he took over as president of Art Institutes International Minnesota, a for-profit education institute in Minneapolis. A spokeswoman for the institute said Monday that Stutts resigned in 2003. During the discovery period of the lawsuit, Barth's attorneys tried to obtain a copy of Stutts' videotaped deposition in his divorce action, arguing that it might contain evidence relating to Stutts' alleged illegal activities. Judge Patricia Hancock of the 113th District Court ultimately denied Barth's motion. In July 2004, Hancock ruled against the University in its contention that Barth could not sue because he had not exhausted remedies available through the UH grievance process. The University appealed to the Texas First Court of Appeals. In June, a three-judge panel upheld Hancock's ruling, setting the stage for this week's trial. The trial is expected to end this week. Full coverage
will appear in the first edition of Breaking News, the online winter break
edition of The Daily Cougar.
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