The University announced Wednesday it will consider returning $800,000 donated by Jeffrey Grayson, the former president of the bankrupt Portland investment firm Capital Consultants.
General Counsel Melinda Grier will begin talks in coming weeks with court-appointed receiver Thomas Lennon, who in June asked the University to return the money.
Grier is currently on vacation and unavailable for comment.
Still, administrators have stated they haven’t decided whether to hand over the dough.
“The University cannot simply give away money without a clear legal reason to do so,” President Dave Frohnmayer said in a written statement. “Similarly, the foundation has a fiduciary responsibility to the many donors who have entrusted their funds to them on behalf of the UO.”
In 1997, the University named the former law school after Grayson, who promised to donate $1.5 million to the University. Since then, the University has received about $800,000 and remodeled Grayson Hall, while the federal government has shut down Capital Consultants for bilking investors and making bad loans.
The U.S. Department of Labor and the Securities and Exchange Commission seized Capital Consultants in September and ordered Lennon to liquidate the company.
Lennon, who reported the business had bilked $355 million from investors and union pension funds, alleges that Grayson’s many high-profile philanthropic donations over the past five years were made with money that the company didn’t legally have. He has stated in court records that Capital Consultants was already insolvent when Grayson pledged his donation to the University.
The University administration, the University of Oregon Foundation and the foundation’s board of trustees did not return the Emerald’s phone calls before press time. But in Wednesday’s written statement, Allan Price, the vice president for university advancement, and foundation president Vinton “Slim” Sommerville echoed Frohnmayer’s statement that the University will do what’s right once it’s clear what that is.
After Grayson Hall’s renovation was completed in September 2000 at a cost of $4.25 million, the University’s history department was moved into the building from the department’s former Prince Lucien Campbell Hall location.
Daniel Pope, the history department head, said while he is appreciative of the new office, he is doubtful the building should bear Grayson’s name.
“I’m increasingly uncertain as more and more information comes out that seems to indicate [Grayson] has done things that might not be criminal but certainly seem dubious,” he said. “Giving the money back is something the University should take very seriously, and if they do give the money back, I think they should probably change the building’s name.”