Courier-Journal: U of L grant funds end up in local bank (updated story)
Three checks totaling $450,000 — money that former University of Louisville education dean Robert Felner said was intended to pay for research — instead ended up being deposited in a Louisville bank, records show.
The records, which The Courier-Journal obtained in an open-records request, don’t identify who deposited or endorsed the checks. But Felner’s lawyer, Scott C. Cox, said yesterday that his client is cooperating with federal investigators in “locating and reimbursing any funds that could be in question.”
Cox declined to say how much Felner is paying back. He has said that Felner is the focus of a federal investigation into the possible misappropriation of federal grant money that he controlled.
The records show that BB&T posted a check made out to “Natl Ctr on Public Education Prevention” for $200,000 on April 10, 2007, that had an endorsement stamp saying “credited to the account of the within named payee in accordance with the payee’s instructions.”
A second check for $50,000 on July 31, 2007, was endorsed with a stamp from the “National Center on Public Education and Prevention Inc.,” or NCPE.
A third check for $200,000 on Jan. 4 of this year had a hand-written endorsement of “NCPE. Deposit only.”
Wes Beckner, the regional president for BB&T, said the bank is cooperating with the investigation.
“We are giving them what they need,” he said, declining to elaborate.
The records show that U of L issued three checks totaling $450,000 to the National Center for Public Education and Prevention Inc. in Illinois, whose president is Thomas Schroeder, Felner’s colleague and friend.
Schroeder’s lawyer, Herbert Schultz, said yesterday that, at Felner’s request, Schroeder returned to Felner the only two checks he was sent, which totaled $250,000. Schroeder previously said he didn’t know about a third check for $200,000.
But university officials said none of the money was ever returned to U of L.
U.S. Attorney David Huber declined to comment on the checks or whether Felner is making reimbursements.
Checks came from grant
The money for the checks came from a $694,000 federal grant received by U of L’s Research Foundation. Felner — who headed the university’s College of Education and Human Development from 2003 until June — directed the grant, which was intended to create a center to help schools boost achievement under the No Child Left Behind law.
Schroeder’s Illinois center is a nonprofit corporation that Schroeder has said he set up in 2001 at Felner’s request. The state dissolved the Illinois center in 2006 after Schroeder failed to file the required paperwork with the secretary of state.
Schroeder told a newspaper in Rock Island that he was the fiscal agent for the grant project but wasn’t aware of any work the center produced.
The three checks for $450,000 were deposited in Louisville under an account bearing the same name as the Illinois center but listing a phone exchange at U of L. The number’s last four digits were not legible in the copy of the check provided the newspaper.
U of L spokesman John Drees declined to comment yesterday on the checks or anything related to the federal investigation.
Team since early ’90s
Felner and Schroeder worked together on projects dating to Felner’s employment as a psychology professor at the University of Illinois in the early 1990s.
Felner later worked as a professor and director of the School of Education at the University of Rhode Island, before being hired as U of L’s dean of education in 2003.
University of Rhode Island officials confirmed this week that Schroeder was paid about $53,500 from August 1997 to June 2001 to work as a consultant on various projects involving Rhode Island’s National Center on Public Education and Social Policy, which Felner directed until 2006.
Felner also hired Schroeder to work as a consultant at U of L in 2004, and he later hired Schroeder to work as his personal grant research assistant from 2005 until this past April, paying Schroeder $2,400 a month.
Schroeder is executive director at the Rock Island County Council on Addiction and president of the Riverdale Community Unit School District No. 100 Board of Education.
So far, no documents have suggested any grant-related research was conducted in Kentucky. The other subcontracts in the grant to come to light include two $60,000 contracts with the University of Rhode Island’s National Center on Public Education and Social Policy.
Officials there said that in the first, a 2006 contract, data on public schools were collected from schools in Rhode Island and Buffalo, N.Y. In a 2008 contract, data were collected from Rhode Island schools only, according to the university.
