Sources: Letter from Greenwood's lawyer prompted special regents' meeting

University of Hawaii President M.R.C. Greenwood prompted Friday's special meeting of the Board of Regents to discuss her future with the school because her lawyer sent a letter to the board, sources told Hawaii News Now.

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 held at UH's John A. Burns School of Medicine in Kakaako.

"She's playing offense," said one source who's been briefed on the lawyer's letter.

Hiatt 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. 

The regents most likely will have to hire their own lawyer to represent them in discussions with Greenwood's attorney, since UH lawyers would have a conflict of interest, a source said. UH General Counsel Darolyn Lendio, who heads a six-lawyer office at the university, reports to both the UH president and the regents. 

So even if the regents decide to keep her on as president, the process will likely cost taxpayers more money in lawyers' fees, a source said.  It could be difficult for UH to hire a Honolulu firm that doesn't already have a conflict, since more than 21 Oahu law firms, many of the state's largest, have done $6 million in legal work for the university between September 2006 and April 2011.

The regents met in a closed-door executive session for nearly an hour and a half Friday.  Neither Greenwood nor Hiatt, her attorney, attended the behind-closed-doors portion of the meeting.

Greenwood did not speak to reporters and neither did Eric Martinson, the Board of Regents chairman.

The board issued a two-sentence statement following the meeting that said, "The board considers the agenda item to be a personnel and legal matter and is treating it with the corresponding confidentiality required.  The matter will be further discussed at the October 19, 2012 Board of Regents' meeting."

During the half-hour public portion of the meeting that began at 2 p.m. Friday, Greenwood listened as a veteran UH professor asked the regents to fire her while another professor and three business leaders said she should be retained.

"Wherever you look, M.R.C. has improved the university," said Mark Fukunaga, a former UH regent and CEO of Servco Pacific, who testified in Greenwood's favor during a special regents meeting Friday afternoon at the UH medical school in Kakaako.

"If you allow political interference, you are going to condemn this institution to mediocrity," Fukunaga said, urging the regents to keep Greenwood on.  Fukunaga, who had been appointed to a former regents' panel by former Gov. Linda Lingle, was not chosen for a second regent's term by Gov. Neil Abercrombie, a source said.

UH Manoa Ethnic Studies Professor Noel Kent asked the regents to terminate Greenwood.

"It stinks from the top down. There is a credibility gap a mile wide. In short, we have become a laughing stock," Kent, a 40-year UH professor, said. "Yes, the current president should be given her walking papers: She has discredited herself."

"My students tell me they can't get the classes they need to graduate, or the counselors they need to advise them.  Of course, nobody asks them if Greenwood has been an exceptional president," Kent told the regents.

Kent was the only person to oppose Greenwood in public testimony.

UH Astronomy Professor Gunther Hasinger backed the embattled president. 

Hasinger said, "President Greenwood's understanding of the astronomy program and her support of it have contributed immensely to her recent accomplishments and her continued leadership is in this area equally important going forward."

Retired judge Walter Heen, who served with Greenwood on an advisory committee on Mauna Kea telescopes, told the regents, "If she is not retained as president of the university, I am convinced from my experience with Mauna Kea that we will lose that opportunity to become among the best institutions insofar as astronomical research is concerned."

Steve Colon, the president of Hunt Development Group, which owns land in West Hawaii next to where UH is building a new community college campus, testified in favor of Greenwood.

"While others helped move this along, I feel strongly that MRC's involvement, oversight and monitoring of the development agreement negotiations and subsequent procurement process has been critical to getting us to this point," Colon said. He said groundbreaking on the project will happen in the next few months.

About 24 people submitted written testimony to the regents.

Greenwood has recently come under fire for her handling of the Stevie Wonder concert fiasco and its aftermath. The UH Manoa Faculty Senate will take up a proposal for a "no confidence" vote about Greenwood next week.

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. For the past two years, Greenwood has voluntarily reduced her pay by 10 percent, while other UH executives voluntarily reduced their pay and unionized employees endured mandatory pay reductions.

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.

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