A University of Toledo consultant whose $1,200-a-day contract netted him nearly $1 million in public funds over the three years he managed the school’s nonprofit economic development agency abruptly quit more than a year before his contract would have expired.
Rick Stansley, Jr., a former UT trustee chairman, was appointed to sit on the board of University of Toledo Innovation Enterprises shortly after his trusteeship expired. About a year after that, in June, 2010, he was hired by UT President Lloyd Jacobs to run the agency as a paid contract employee.
“I was offered to buy an operation out of Flint, Mich.,” Mr. Stansley told The Blade. “I decided to pursue this other opportunity, which is in the waste transportation business.”
University of Toledo Innovation Enterprises — often called UTIE — was formerly UT’s Science, Technology, and Innovation Enterprises. It was reinvigorated in 2008 with $10 million approved by the UT board of trustees. Since then, the name was changed and it has invested nearly all of the $10 million in mostly start-up technology companies.
Mr. Stansley this week said UTIE owns “16 portfolio companies” and has about $800,000 left to invest in “uncommitted money.” Dr. Jacobs, who also sits on the UTIE board of directors, said the figure is less than that, but he could not provide an exact amount. UT spokesman Jon Strunk later said UTIE has $725,000 remaining from the initial $10 million.
Among the UTIE investments was $3 million to solar-panel maker Xunlight and nearly $1.4 million to a firm named ST&I MWOE Holding Inc., according to a September, 2011, email obtained by The Blade. UTIE had to write off $1 million of the Xunlight investment as a loss.
Mr. Stansley’s departure on Tuesday from UTIE came less than a month after an independent “accountant’s report” of UTIE, which was prompted by an anonymous complaint to the Ohio Auditor of State. The review by Michigan-based accounting firm Rehmann Robson LLC reviewed relationships UTIE had with other companies, including Incenu, a for-profit company in UTIE’s portfolio, and firms called Isofoton and Nextronex.
Last year, UT officials said UTIE had invested $549,996 in Nextronex, which makes electrical inverters.
“Isofoton payments to Incenu … totaled $114,500,” the Rehmann Robson report states. “The services rendered were consistent with Incenu’s purpose and with the consulting agreements in place and appear reasonable.”
Incenu wrote business plans for companies, including some of the companies that were later funded by UTIE and operated out of the UT business incubator. Mr. Stansley was listed as Incenu’s director, although he told The Blade last year he never collected a paycheck from that company or any others associated with UTIE. UT professor Brandon Cohen is Incenu’s president and chief executive officer, according to the Rehmann Robson report.
The report said an additional $50,500 was received from the Ohio Department of Development on behalf of Isofoton.
Rehmann Robson’s Jan. 15 report acknowledged a complicated web of companies involved with UT and UTIE and noted that not all companies are independently audited.
“Although UTIE is a component unit of the university, it was not subject to a separate audit and was not subject to specific audit procedures due to materiality and the audit firm’s professional judgment,” the report said. “Incenu has not been subject to a separate audit.”
In a universitywide audit dated June 30, 2012, the private auditor Plante Moran included only three paragraphs about UTIE.
Mr. Stansley was appointed by former Ohio Gov. Bob Taft to the UT Board of Trustees in 1999 and was chairman when Dr. Jacobs was hired as president in 2006 after the UT-Medical University of Ohio merger. When Mr. Stansley’s final term as trustee expired in June, 2009, he was appointed chairman of the UTIE board.
He received $1,200 a day under the contract that started June 24, 2010, and would have run through June 20, 2015. He charged the university for working on some holidays, such as Memorial Day and Independence Day. The total for his services cost taxpayers $985,800.
Mr. Stansley said he was selected to run UTIE because he was integrally involved in creating UT’s “Tech Corridor,” which was a brainchild of former UT President Dan Johnson.
The Rehmann Robson report lists other titles afforded to Mr. Stansley, not previously disclosed by UT officials.
It identifies him as a board member of Nextronex, in which UTIE holds an equity investment.
“[Mr.] Stansley has also acted as director of strategic development, co-director of photovoltaics innovation and commercialization, and interim assistant dean of the school of solar and advanced renewable energy at UT.”
Since 2011, Mr. Stansley also has been board chairman of Rocket Ventures LLC, a $22.5 million venture-capital fund formerly run through the Toledo Regional Growth Partnership. That agency severed ties with UT last month in an effort to bolster business across the entire northwest Ohio region.
The move came a year after Rocket Ventures accepted a $2 million, two-year grant from Ohio’s Third Frontier Commission, which stipulated that the organization expand its scope beyond Toledo. It currently funds 19 start-up companies and consults with about 50 firms each year on how to improve their business plans.
UTIE and Rocket Ventures were separate, but operated under the same roof in UT’s Research and Technology building at 2600 Dorr St.
Both UTIE and the University of Toledo Foundation have helped fund Rocket Ventures LLC, which received $300,001 from UTIE that was put into a certificate of deposit at Huntington Bank.
Another entity called Rocket Ventures Fund received a separate investment of $830,878.
UT Trustee Chairman Joseph H. Zerbey IV, who also is president and general manager of The Blade, declined to comment on Mr. Stansley’s departure from UTIE.
“I know UTIE has been fully audited and reported to its board,” Mr. Zerbey said. “I know of no financial inconsistencies or irregularities.”
Dr. Jacobs said he is re-evaluating UTIE.
“We have had UTIE for three or four years now and it, to my mind, has been a tremendous success,” he said. “I would have invested, if I was clairvoyant, somewhat less in the solar industry. Our whole town is heavily invested in solar. I didn’t see the meltdown of the solar industry coming.”
Dr. Jacobs stressed that the $10 million came from revenue received through “auxiliary services,” such as vending-machine profits — not tuition dollars or student fees. The monetary sources include $2 million from parking fees, $1 million from food service, $2.12 million from the campus bookstore, $4.37 million in rent payments from the Veterans’ Administration building at 3333 Glendale Ave., and $500,000 from photocopiers.