Regents Chairman John Mercer wants to know what UM's Northern Rockies Center for Space Privatization has to show for the $3 million it received from noncompetitive NASA grants intended to promote the commercialization of spaceflight technologies.
Regents never approved of the center, which was on their September 2003 board agenda, but was pulled by UM President George Dennison and never discussed.
Meanwhile, the space privatization center has yet to produce results for its original mission, which according to UM's top research administrators, was to “coordinate activities exploring scientific and commercial applications of spaceflight technologies, joint research and development projects, and related educational activities.”
A review of the center's annual reports shows UM hosted a few “space camps” for K-12 students, which were funded by money raised in a “Mission to Mars” golf tournament; set up a “Picture Yourself in Space” photo booth at several county fairs; gave low-tech microgravity demonstrations to middle schools and educators; and repackaged NASA educational materials into a fifth-grade lesson plan for studying organisms that live in extreme environments.
During the two-year period 2003-05, the space privatization center paid out $1.476 million in salaries and fringe benefits to approximately 12 staff and 18 part-time student workers. Another $404,575 went to UM's general budget to pay indirect costs such as heating bills.
When asked about the NASA-funded center, UM officials don't have clear answers and have given out contradictory information. They are not clear about the center's origins or work, or about its partnership with the Inland Northwest Space Alliance.
Some of the confusion stems from the fact that the two architects of the center are no longer employed by the University of Montana.
Lloyd Chesnut helped create the space privatization center when he was UM's vice president for research and development, but left Missoula in 2003 for a similar job at the University of North Texas. Wes Snyder, who was a UM assistant vice president and was in charge of the NASA-funded projects, abruptly resigned earlier this month.
Chesnut, who resigned from the University of North Texas last summer and is being investigated there for possible conflict-of-interest violations and manipulating federal documents, has not returned repeated Missoulian inquiries about the space privatization center.
Snyder, who had been working in the Republic of Georgia on behalf of UM, remains in that country. He, too, has not returned Missoulian inquiries.
In tape-recorded interviews and in written responses to Missoulian inquiries, Dennison and UM's top research administrators referred to the space privatization work as “a center,” and said the regents approved it in September 2003.
Dennison defended the center's work. UM may not have fulfilled its mission to commercialize space technologies, he said, but the center did succeed in stimulating and supporting space science among K-12 students.
Most of the work that was done, Dennison said, was “making certain young people would have some understanding of what people do if they are in science and technology as it relates to space.”
“That was the scope of work that was outlined in the contract, that was the work that was done and that was the report accepted by NASA,” Dennison said.
“I really don't know why other research projects didn't develop,” he said, “but (the center) was a vehicle, as most of these centers are, by which you can do multiple projects. Some work and some don't.”
According to the space privatization center's 2003-04 annual report, one of its crowning achievements was the creation of a computer game called “Mars: The Journey Begins” by UM computer science professor Joel Henry and his students.
When asked about the project, Henry said he received $60,000 to develop the game with his students, and was told by center staff that it would be promoted nationwide by NASA. There was even talk of putting the game on thousands of CDs that would be placed in cereal boxes.
Nine months later, when Henry and his students completed the project and shared the game with area elementary students, neither the Northern Rockies Center for Space Privatization nor NASA came through with the marketing campaign.
“The benefit my students got from the experience was tremendous,” Henry said. “But the NASA part just fell down. I haven't heard from anybody since I got that money in 2003, even though I've written and called my contacts.
“No one has responded.”
When Stearns, Montana's commissioner of higher education, asked about the space privatization center earlier this month, UM legal adviser David Aronofsky said the center was “never a center,” but was instead a series of grants, and therefore the work it funded didn't need regents' approval.
No one at UM knew when the center helped create the Inland Northwest Space Alliance, the spinoff company incorporated as a Montana nonprofit in February 2003. But when INSA filed federal taxes for that year, INSA identified itself and filed as a for-profit company.
Neither did UM officials know that George Bailey signed the incorporation papers, and was at the time a UM employee serving under Chesnut as assistant vice president for research-special projects. Today, Bailey is INSA's president.
Stearns and Regents Chairman Mercer are disturbed by the recent revelations and the confusing information flowing from UM.
“To me, this goes to the very credibility of the university system and the leadership of the University of Montana,” Mercer said.
It is not uncommon for campuses to withdraw proposals between the time the regents' agenda is published and the board convenes, Stearns said.
“What is puzzling is why the NRCSP or INSA were never resubmitted, or submitted the previous spring to the board for approval,” Stearns said. “From what I have recently learned, INSA appears to rise to the level of university involvement that should have been reviewed by the Board of Regents.
“It is not unusual for universities to incubate corporations so they can fly on their own, profit or nonprofit,” she said. “That can be very good for Montana. But if connections to the university are close, the process should not fly under the regents' radar.”
Mercer said he is stunned that UM has been conducting business in this manner.
“It's shocking to me that UM represents to the public that this was approved by the Board of Regents, and it's amazing to me this kind of thing occurs,” he said.
“When the regents meet (this week in Dillon), I am going to ask that they approve an independent audit of this center - or whatever it is - just as we did when we learned of UM's athletic budget deficit,” he said. “I would like to bring in members of the legislative branch of government and members of the public to be part of this and make sure there was value received for federal dollars expended.”
Mercer said he will also ask regents to approve an independent audit and conduct a review of Chesnut, who was UM's vice president for research from 1997 to 2003.
When regents heard last fall about the Texas investigation surrounding Chesnut, UM officials were asked to review his conduct on the Missoula campus.
In January, a UM task force concluded that Chesnut did not violate any state or university misconduct or conflict-of-interest standards.
The task force, however, failed to fully look into Chesnut's involvement with the Northern Rockies Center for Space Privatization - in particular, his involvement with the for-profit INSA.
The Inland Northwest Space Alliance was created in 2003 with nearly $1 million of the NASA funding UM received for the Northern Rockies Center for Space Privatization.
Employees at INSA started drawing their first paychecks in August 2003; among those receiving payment were Chesnut and his wife, Lucy - a month after Chesnut began his job in Denton, Texas.
According to paperwork on file at INSA, Chesnut received $15,000 during his five months as chairman of INSA's board of directors, from August through December 2003.
It's unclear what Lucy Chesnut earned during that time period. INSA isn't forthcoming with the information and UM doesn't know. But when INSA changed its status from a for-profit to a nonprofit in 2004, records show Lucy Chesnut earned $104,100 as the Missoula company's business manager - which she performed from Texas until September 2005.
In 2004, Lloyd Chesnut was listed as president on INSA's Montana corporation annual report.
While it is unknown and unclear if Chesnut's involvement and his wife's employment with INSA violated any campus, regents or state conflict-of-interest policy, Mercer wants a deeper, more detailed investigation into the accounts and activities involving Chesnut while he was at the University of Montana.
The report UM issued drew conclusions, but “did not give a detailed analysis of who did what. All that it said is ‘we can't find any wrongdoing,' ” Mercer said. “Based on that report and the addition of new information, I have serious concerns that there may be problems with regard to the accountability and effective expenditure of federal dollars in regards to this grant.”
“It seems when it comes to matters regarding this center, there are far more questions than answers,” he said. “UM needs to provide the answers and explain all of this. I want to see the accounting, I want to understand where did the money go, who was it spent on and see if this grant provided or produced any value.”
Late last week, a top UM research administrator agreed.
“There's enough new evidence, I think we need to take some time and go over this situation very, very carefully and make sure we know what fully happened with the whole creation of the Northern Rockies Center for Space Privatization and what has spun out of it,” said Dan Dwyer, the university's current vice president for research.
Meanwhile, Stearns said the Legislative Audit Division has started a long-scheduled performance review of research and development in the Montana University System, and she plans to call UM's space center to the division's attention.
“With the guidance of the board and with the assistance of individuals independent of INSA and UM, I will undertake an inquiry as to why the regents were bypassed in the creation and oversight of INSA,” Stearns said. “I will not jump to any conclusions as to what occurred, or in regard to what possible steps might be taken, until all the facts are known.”
Reporter Betsy Cohen can be reached at 523-5253 or at bcohen@missoulian.com
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