UH regents hire lawyer to help determine Greenwood's fate
UH regents hire lawyer to help determine Greenwood's fate
October 18, 2012 at 11:32 AM HST - Updated June 28 at 5:11 AM
The University of Hawaii Board of Regents has hired well-known Honolulu attorney Bill McCorriston to represent them in discussions about whether UH President M.R.C. Greenwood should remain in charge of the university or be fired.
The regents met behind closed doors in executive session for two and a half hours Thursday afternoon, and they discussed Greenwood's future for part of that time with McCorriston, sources said, once Greenwood had left the room. Their discussions occurred following the regents' day-long regular monthly board meeting held at UH's John A. Burns School of Medicine.
Greenwood has come under fire for her handling of the failed Stevie Wonder concert and its aftermath.
McCorriston is considered to be one of the best litigators in the state and was hired by a previous regents panel in 2004 to represent the university when it fired then-UH president Evan Dobelle.
McCorriston's hiring should not been seen as a strong signal that the regents plan to terminate Greenwood, only that they want the best legal advice from someone who's represented the UH in several high-profile cases, sources said.
UH paid McCorriston's law firm, McCorriston Miller Mukai, $589,375 to defend the university in a lawsuit by Townsend Capital, a Maryland company, which charged UH replaced the firm as developer of the $120 million Cancer Research Center of Hawaii for reasons of cronyism. The lawsuit said the UH instead hired Kobayashi Group, a Honolulu company which had "close personal ties to university administrators and regents." UH settled the case for $2.5 million in 2010.
UH records show the university also paid McCorriston's firm $8,484 to handle a bid protest in a project involving the school's Cooke Field, and UH paid the firm another $59,086 to handle a case involving UH Manoa housing.
UH General Counsel Darolyn Lendio, who heads a six-lawyer office at the university, reports to both the UH president and the regents, creating a conflict of interest which requires the regents to hire an outside lawyer to advise them in this case, sources said. She is a former partner in McCorriston's law firm.
On another issue, sources said the regents did not reach a conclusion Thursday about whether the settlement that reassigned Jim Donovan from athletics director to a communications job was properly approved. During State Senate briefings earlier this month, senators said regents violated their own policies by not taking a proposal to settle a potential lawsuit by Donovan to a full vote of all 15 regents. Instead, the settlement, which guaranteed Donovan a $211,000-a-year job for three years and paid $30,000 in his attorney's fees, was approved by Greenwood.
Sources said Greenwood took part in the executive session discussion about the Donovan settlement issue Thursday. Regents plan to take up the issue again, sources said, at a future meeting.
A regents task force was supposed to release the first phase of a report Thursday on how to avoid future failures like the Wonder blunder.
The group has not completed its work yet. The task group is getting help from consultant KMH which the UH is paying $50,000.
"KMH will be meeting with the senior management of the University of Hawaii to see what policy and procedural modifications they have implemented since the incident and also what other policy and procedural modifications they plant to implement," said UH Regents Vice Chair James Lee.
The regents task force expects to release its report to the public at the next regents' meeting Nov. 15 at UH Maui.
Thursday was the second time regents went behind closed doors to talk about Greenwood's future. The first discussion, held during Friday's special meeting of the regents to ponder whether to retain her as president, was prompted after her lawyer sent a letter to the board, sources told Hawaii News Now. Friday's closed-door meeting executive session lasted nearly an hour and a half.
Sources said Greenwood's lawyer, Jerry Hiatt, sent the regents a letter on Greenwood's behalf telling the regents they either need to stand by her in public or negotiate some sort of settlement package for her to leave the university.
Hiatt sat in the front row during Friday's regents meeting. He declined comment to Hawaii News Now.
Terminating Greenwood without cause would cost taxpayers one year's worth of the $475,000 annual salary in her contract. Since she was hired in 2009, she has taken a 10 percent salary reduction, similar to the salary cuts endured by all other university employees.
Sources said there is no firm consensus among the 15-member Board of Regents about whether they should fire Greenwood. About four or five regents firmly support Greenwood, including Martinson, who is the chair, and the regents' two vice chairs, James Lee and Carl Carlson, sources said. Another faction of four or five regents opposes Greenwood and feels she should be terminated, sources said. It's unclear how the remaining regents stand on whether she should remain or be let go.
Regents will have to weigh Greenwood's last three years as president and decide whether her handling of the concert debacle and its aftermath, which has been widely criticized, is reason enough to fire her. Regents must also decide whether Greenwood will be able to be effective in dealing with Gov. Neil Abercrombie, state lawmakers and other key constituencies that have been upset with her handling of the matter and the senate hearings that were held this fall.
It could be both difficult and expensive to try to terminate Greenwood or other top UH executives, according to a Hawaii News Now review of university procedures, policies and employment agreements.
Greenwood's contract pays her an annual salary of $475,008 as well as a $5,000-a-month housing allowance and the use of an automobile or a car allowance of $326 a month.
Greenwood's employment agreement also gives her a free parking space and use of an annual protocol fund of $150,000. Greenwood was also granted tenure as a UH professor, allowing her to land in a faculty job if she's terminated without cause.
The regents hired Greenwood in August 2009 and extended her initial three-year contract for another three years in Jan. 2011, without any increase in pay. But her contract allows the regents to "adjust Dr. Greenwood's compensation" for the fourth, fifth and sixth years, "to be determined by mutual agreement of the Board and Greenwood." Theoretically, the board could increase or decrease her pay in those years. But so far, her salary has remained the same. Greenwood's contract expires July 31, 2015.
The agreement allows for termination of Greenwood for cause, including negligence or willful misconduct, conviction of a crime, prolonged absence, failure to comply with board directives or policies or with applicable laws.
Greenwood's contract also says she can be fired for cause for damage to the university's reputation, which is described as "any act or failure to act by or attributable to Dr. Greenwood that in the board's reasonable determination subjects the university to undue criticism and embarrassment, damages the university's credibility and reputation, or otherwise portrays the university in an unfavorable light."
No one from the Board of Regents has publicly called for Greenwood's ouster.
Greenwood's contract, like those of UH Manoa Chancellor Tom Apple and former Athletics Director Jim Donovan, said the university can terminate her for no reason or "without cause." To do that, the school would have to give her two months written notice and then pay her for the remainder of her contract or 12 months base pay, whichever is lower.
If she is terminated without cause, the UH is obligated to offer her a tenured faculty position, according to her employment agreement, along with 60 days of housing allowance and reimbursement for moving expenses.
The bottom line: terminating a UH executive without cause could be very expensive and firing them with cause can be difficult to prove, possibly leading to a lawsuit and a costly fight in court. Even the threat of a lawsuit can prompt costly and lengthy mediation, as UH learned when it terminated a previous president eight years ago.
In June 2004, the UH Board of Regents fired then-UH President Evan Dobelle from his $442,000-a-year position for cause, meaning that he stood to lose $2.26 million in severance pay. After he threatened to sue, his lawyer and the university reached a settlement in which he agreed to resign, but received $1.05 million in severance pay and other benefits, the Honolulu Star-Bulletin reported at the time. In exchange, the regents rescinded their "fired for cause" decision.
The episode was costly for taxpayers and took nearly two months to resolve. The regents fired Dobelle June 15, 2004, and after the UH hired lawyers to represent its case and agreed to Dobelle's million-dollar payout, both sides settled the dispute in early August, when he agreed to step down on Aug. 14 of that year.