FORT KENT, Maine — Board members of a nonprofit foundation designed to support the University of Maine at Fort Kent are rallying behind its executive director and university president, Wilson Hess, after the College of the Marshall Islands stripped him of the honorary title of president emeritus.
The 10-member board of regents at the small community college in the Central Pacific, where Hess was president from 2005 to 2009, voted unanimously on Dec. 12 to strip Hess of the honor amid allegations he mismanaged the funds of a similar nonprofit foundation formed to support that school.
In making its decision, the Marshall Islands board cited what it described as Hess’ troubling lack of transparency in his work leading a U.S.-based group dedicated to fundraising for the college, which Hess guided after departing as college president in 2009.
Hess, who became president of UMFK in July 2010, was named executive director of the UMFK Foundation at the same time. He also continued to serve as executive director of the nonprofit Friends of the College of the Marshall Islands through 2013. That organization lost its tax-exempt status in 2013 after failing to file necessary paperwork with the IRS during the prior three years while Hess was at the helm. It is in the process of dissolving.
UMFK Foundation President L. James Roy said Wednesday he has worked closely with Hess over the years and is not at all worried about his involvement in the local foundation in the wake of the Marshall Islands college allegations.
“There are no issues at all with [UMFK] President Hess,” Roy said. “We always want to dot the i’s and cross the t’s at board meetings, and our audits speak for themselves.”
Those audits, according to Roy, show a foundation that is financially sound and on solid footing.
In October, the auditor reported that the UMFK Foundation, which raises and administers funds in support of the university, had net assets of $2,888,333, an increase of more than $1 million from 2013.
“In our opinion, the financial statements present fairly in all material respects the financial position of the [UMFK] foundation as of June 30, 2014, [and] the changes in the net assets, and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America,” reported the Presque Isle-based certified public accounting firm of Chester M. Kearney.
The discovery of the lapse that caused the Friends of the College of the Marshall Islands to lose its nonprofit status sparked that college’s board of regents and administration to take action in December against Hess. They also alleged that his management of the college yielded short-term results that left the school on precarious financial footing.
The College of the Marshall Islands has not taken any legal action against Hess, and officials in the Marshall Islands have not alleged any criminal conduct.
On Wednesday, UMFK Foundation Vice President Stephen Gagne said that, while aware Hess was stripped of his president emeritus status by the Marshall Islands college, he was caught a bit off guard when he learned about all the allegations of financial wrongdoing.
“I was kind of surprised by that,” said Gagne, who also is a vice president at NorState Federal Credit Union. “Everything I have seen through my service with [Hess] in the [UMFK] foundation has been to the contrary, [and] I have found him to be very transparent and always keeping us abreast of what is going on with the foundation and its finances.”
Both Gagne and Roy said there is no danger of the UMFK foundation losing its 501(c)3 nonprofit status.
“That is nothing I am concerned about,” Gagne said. “We get the financial statement from Chester Kearney, and I’ve never seen any numbers that would scare me off, [and] the foundation certainly has nothing to hide.”
For his part, Roy believes Hess is being set up as a scapegoat by officials at the College of the Marshall Islands.
“I think what happened there was regulations were not scrutinized,” Roy said. “Our [501(c)3] status is safe, we have audited financial statements, [and] those audits speak for themselves.”
On Wednesday, Hess said there exist safeguards and controls in this country to ensure the UMFK Foundation would never lose its 501(c)3 status.
At the same time, he acknowledged that the news coming out of the Marshall Islands could affect the public’s perception of his position with regards to the UMFK Foundation.
“Perception is always reality,” Hess said. “It would be hubristic of me not to be on guard.”
But the UMFK president added he has no plans to step down as the foundation’s executive director.
“We’ve had just today lots of wonderful response from folks affiliated with the foundation and the university,” he said. “If the [UMFK Foundation] board wants me to step down, I would certainly do that.”
