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NCLB Outrages

Former Louisville Dean Indicted on Charges Related to Diverting Funds

Keep reading. This fellow was also getting NCLB money.

By David Glenn

A federal grand jury issued an indictment on Wednesday alleging that a former dean of education at the University of Louisville and an associate diverted more than $2-million into their personal bank accounts from a federal research grant and from contracts with municipal school districts.

If convicted on all 10 counts—which include charges of mail fraud, money laundering, and tax evasion—the former dean, Robert D. Felner, could face at least 20 years in prison.

Mr. Felner came to Louisville in 2003 after seven years as director of the University of Rhode Island's School of Education. He resigned from Louisville in June, when he was hired as the chancellor of the University of Wisconsin's Parkside campus. But he withdrew from the Parkside position two weeks later, after he informed Wisconsin officials that he was the subject of a federal investigation (The Chronicle, July 4).

In an e-mail message last April that was obtained by a Louisville television station, Mr. Felner wrote that he needed "to relentlessly look for another job as this one I have been told is probably not long."

Mr. Felner's lawyer, Scott C. Cox, declined to comment on the indictment on Wednesday. But he said that previous news coverage about Mr. Felner "has been extraordinarily unfair and may prevent him from receiving a fair trial in Louisville."

Mr. Cox added that Mr. Felner planned to turn himself in at a U.S. marshal's office this morning.

Two Centers With Similar Names

Much of the indictment concerns the National Center on Public Education and Social Policy, a research unit that Mr. Felner established at the University of Rhode Island in 1997. The center draws most of its revenue from contracts with urban school districts for assessments of their classroom instruction, parental involvement, or curricular design.

In 2001, according to the indictment, Mr. Felner hatched a scheme to divert funds from the center to his personal use. Together with a friend, Thomas Schroeder, who is named in four of the indictment's 10 counts, he established a nonprofit corporation in Illinois with a name almost identical to the Rhode Island center's: the National Center on Public Education and Prevention.

Mr. Schroeder is chief executive of the Rock Island County Council on Addiction, in Rock Island, Ill. He did not return a request for comment on Wednesday. According to news reports, the two men first crossed paths when Mr. Felner was a professor of psychology at the University of Illinois at Urbana-Champaign during the 1990s.

Over a six-year period, according to the indictment, Mr. Felner and Mr. Schroeder fraudulently induced three of the center's clients—the school districts of Atlanta, Buffalo, and Santa Monica, Calif.—to send payments to the Illinois corporation instead of to the Rhode Island center. Mr. Felner then transferred much of the money into his personal bank accounts. News organizations in Louisville have reported that Mr. Felner owns four homes, collectively worth nearly $3-million.

A spokeswoman for the University of Rhode Island did not return a request for comment on Wednesday.

In 2003, Mr. Felner moved from Rhode Island to become dean of the University of Louisville's College of Education and Human Development, but he maintained a relationship with the Rhode Island center.

Suspected Misuse of Earmark

Mr. Felner successfully lobbied in 2005 for a Congressional earmark worth $694,000 to study how the No Child Left Behind Act was being carried out in Kentucky. In his proposal, Mr. Felner promised to hire at least four staff members and to work in collaboration with several school districts. But little if any of the work ever actually took place, according to the indictment. Instead, it said, the money was almost entirely diverted into hollow subcontracts with the Rhode Island center and the Illinois corporation.

The Courier-Journal, in Louisville, reported in July that several state officials named as potential collaborators in Mr. Felner's grant proposal had never heard of the project.

The grant was overseen by the U.S. Education Department's Office of Innovation and Improvement. A spokesman there declined to comment on Wednesday.

The indictment suggests that Mr. Felner's activities had the character of a Ponzi scheme. He allegedly diverted portions of the federal grant to the Rhode Island center to reimburse it for work it had performed on the Atlanta, Buffalo, and Santa Monica contracts.

In August, the Courier-Journal obtained e-mail messages in which Anne Seitsinger, the current director of the Rhode Island center, implored Mr. Felner to send money. "Our budget is pretty desperate," she wrote in 2005. "We are short about $90K."

It is not clear whether Ms. Seitsinger was aware of the diversions of money to the Illinois corporation. She did not reply to a request for comment on Wednesday.

In a written statement released Wednesday, the University of Louisville's president, James R. Ramsey, emphasized that the university itself had detected the apparent fraud and tipped off federal authorities earlier this year. The U.S. attorney's office in Louisville did not immediately return a request for comment, but a news release on the office's Web site acknowledges the work of the university's police department as "essential in discovering this conduct."

The university, in another written statement released this month, listed six continuing audits and reviews related to Mr. Felner's career there.

No-Confidence Vote

But a former faculty member at Louisville said in an interview on Wednesday that the university had dragged its feet in investigating Mr. Felner's conduct. Pedro R. Portes, who is now the chair of Latino teacher education at the University of Georgia, said that administrators should have paid more attention to a faculty vote of no confidence in Mr. Felner in 2006.

"This should be a lesson to people throughout academia," Mr. Portes said. "They have ignored faculty governance and tried to run the university like a corporation."

In a letter to Louisville's governing board in August, Mr. Portes and two other former faculty members wrote that "the president and provost failed to exercise their fiduciary responsibility to the people of Kentucky, and we believe the Board of Trustees should address this in a meaningful and substantive manner."

University officials did not immediately return a request for comment on Mr. Portes's remarks.

Mr. Felner earned a doctorate in clinical psychology at the University of Rochester in 1977. Before arriving at Rhode Island in 1996, he held faculty positions at Yale University, Auburn University, and the University of Illinois.

— David Glenn
Chronicle of Higher Education


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