“Three Cups of Tea” Author to Pay $1 Million to His Nonprofit, Lose Board Voice

Mortenson

April 5, 2012; Source: Bozeman Daily Chronicle

The bestselling author of Three Cups of Tea, Chris Mortenson, has agreed to return $1 million to the nonprofit he co-founded, the Bozeman, Mont.-based Central Asia Institute. You’ll recall that Three Cups of Tea retold the tale of Mortenson’s voyage through Pakistan, which the author claimed began when he got lost while trying to reach the peaks of K2 and then turned into an odyssey in which Mortenson built schools for local children (hence the book’s subtitle, “One Man’s Mission to Fight Terrorism and Build Nations…One School at a Time”). You may also recall that aspects of that tale have been disputed, most notably by author Jon Krakauer, who wrote a rebuttal book of sorts with a title that promptly announces its thesis, Three Cups of Deceit: How Greg Mortenson, Humanitarian Hero, Lost His Way.

Many people were inspired by Mortenson’s book, which was undoubtedly helpful in attracting tens of millions of dollars (including a $100,000 donation from President Obama) to the author’s nonprofit, but it appears that all was not well at the Central Asia Institute (CAI), as CBS’ “60 Minutes” first noted about one year ago. Among the violations that were alleged in the Montana attorney general’s report, released yesterday: failure to offset profits the author made from CAI’s purchasing many copies of his book, accepting travel reimbursements from groups while CAI was reimbursing those same travel costs, and using CAI donations on personal purchases like flights for non-CAI-related trips, clothes and online media downloads.

The report also takes CAI’s board to task for a general lack of oversight, which may not be completely surprising, considering that the board consisted of only three people, one of whom was Mortenson. Based on the terms of the settlement, Mortenson will be allowed to remain on the board, but not as a voting member, and the other two board members will have to leave within a year. A new board, consisting of at least seven members, and a new executive director, must also be put in place, according to the terms of the settlement.

In the report, Montana Attorney General Steve Bullock summed up the situation as follows: “The story of Central Asia Institute and Greg Mortenson evokes notions of the best of our aspirations to do good and the generosity of the American public. It involves the efforts of a complicated person who has worked tirelessly on behalf of a noble pursuit, even while acting in a way that jeopardized that pursuit. The story also demonstrates how things can go wrong when officers and directors of a charitable organization fail to abide by fundamental principles of management and oversight.”

We couldn’t have put it any better than that. –Mike Keefe-Feldman

  • Guy Montag

    Last year, Daniel Glick wrote: “I believe in the importance of journalism to ferret out charlatans, expose financial fraud, and hold people and institutions accountable. That said, it’s hard to believe why “60 Minutes” decided that Greg Mortenson and the Central Asia Institute qualified on any of those fronts – much less why Jon Krakauer joined in this recent barrage.”

    After his 2004 break with CAI, Jon Krakauer wrote: “I still believe in CAI’s mission … I don’t want to make any public statements that would have a negative impact on Greg’s work….” So then, seven years later, what prompted him to speak out?

    Well, Krakauer was not just a “crusading do-gooder” outraged by literary deceit. It appears his e-book was largely a publicity stunt timed with the “60 Minutes” broadcast (largely spoon-fed to them by Krakauer) to create the “buzz” to raise the investment capital needed to launch his old friend Mark Bryant’s start-up of Byliner.com.

    Mortenson still needs to answer questions about his literary and financial practices. However, Krakauer also needs to explain how he “got onto the Mortenson story.”

    Note: From “With Three Cups of Luck?” in the Jon Krakauer post at the feralfirefighter blog.

  • Julie Rodda

    I read the full article this morning in today’s Billings Gazette. Obviously hitting close to home for npo’s in Montana, this is a clear reminder to charitable organizations that Boards have a legally determined and established role which does not include making their Founder/Executive Director the main manager of both the board and the foundation. The rise to popularity and resultant land-fall of donations which this board claims was what cause their problems was not really the issue. The fact that this board did not know what it’s key function was is a sad yet common issue. As a consultant to nonprofits, I find that the typical reason boards are not educated is because they have no serious interest nor clear priority for being trained or educated. Word to the wise– You never want your educational opportunity to be delivered via the Attorney General’s office.

    Julie Rodda
    Rodda Consulting

  • Eyeneversayno

    Yes, CAI purchased ‘many copies’ of Mortenson’s books, $4 million worth according to the MT OAG’s office, and until he got caught Mortenson pocketed hundreds of thousands of dollars in royalties from these purchases, made with money donated by unsuspecting folks. Mortenson and CAI also spent $2 million of donor money on private jet travel for Mortenson on his speaking engagements. Mortenson was often reimbursed personally by sponsors of these events, meaning that he was double dipping, getting his travel expenses paid by both the charity and the sponsors. Of course Mortenson also millions if royalties from the purchase of his books by the public, while the charity footed the promotional costs. The guy is a fraud and a would be crook. Thank god Krakauer exposed him.

    It’s all in the MT OAG’s report here:
    https://files.doj.mt.gov/wp-content/uploads/2012_0405_FINAL-REPORT-FOR-DISTRIBUTION.pdf