Dr. Robert J. Gee, whose lavish spending and fiscal stewardship at the Falmouth-based National Graduate School of Quality Management have spawned three separate inquiries, has been removed as the college’s president by the board of trustees, the school informed its staff yesterday.
Thomas C. Kneaval, the chairman of the school’s board of trustees, said in an e-mail that Gee would return to teaching and “other activities related to” a hastily scheduled review by the New England Association of Schools and Colleges, which accredits institutions of higher education. The association’s next review had been scheduled for 2014, but was recently moved up to September because of revelations about the school.
Attorney General Martha Coakley launched a separate investigation after the Globe reported on April 26 that the tiny Falmouth school had paid Gee $732,891 in 2009, provided his wife with a $100,000 annual salary, given the couple two new Mercedes Benz automobiles, and paid nearly $200,000 for a two-week annual timeshare for the Gees in the US Virgin Islands.
Gee purchased the two automobiles at school expense, for $130,658, not long after the Massachusetts Development Finance Agency authorized $2.64 million in low-interest bonds in 2009 so the school could buy a $3.25 million waterfront compound overlooking Martha’s Vineyard. The compound’s most breathtaking views are from a six-bedroom house that was intended to be Gee’s residence.
Coakley, whose office oversees nonprofit groups, said in April that Gee’s compensation seemed excessive and raised questions about the school’s stewardship of charitable funds. She has ordered the school to turn over to her office numerous documents, including any that would illuminate whether the school’s trustees had adequately overseen Gee’s administration of the school.
Kneaval’s e-mail announced that John H. Bridges III, the board’s vice chairman, would serve as interim president. A school administrator inadvertently copied a Globe reporter on the e-mail.
Scott Adams, a former board member, told the Globe in April that the board had acted as a “puppet group’’ that seldom raised questions about Gee’s spending.
Yesterday, Adams said that Bridges had long been troubled that the board did not exercise its proper oversight role.
Diana Pisciotta, a spokeswoman for the board of trustees, said that Kneaval would not comment further and that the board “prefers to let the letter stand on its own.’’ She declined to say whether Gee’s compensation had been reduced.
The letter, Pisciotta said in an interview, “is a clear sign that the board is acting responsibly to fulfill its fiduciary duties and to assure that the school continues its accreditation.’’
Last night, Brad Puffer, a spokesman for Coakley, said the attorney general is conducting a comprehensive review of the school “in order to protect charitable funds and the public interest.”
“While we cannot comment on actions reportedly taken by the board regarding its president, the school’s board of directors has an ongoing fiduciary obligation to make decisions in the best interest of the organization,” he said.
Last night, attempts to reach Gee by phone and by e-mail were unsuccessful. Gee founded the school in 1994. It has fewer than 400 students, who take undergraduate and graduate courses around the country in total quality management, to more efficiently manage production and manufacturing processes.
According to the letter, Gee was being replaced in advance of the pending visit by officials of the accrediting agency, the New England Association of Schools and Colleges. Accreditation is critical to schools like the National Graduate School. If it were withdrawn, the school would probably not survive.
Barbara E. Brittingham, the president of the New England Association, said in an interview yesterday that Gee, after the April disclosures, asked her agency’s higher education commission to move up the review by two years. Speaking generally, Brittingham said that such a step is unusual and occurs when there are publicly expressed concerns that relate to accreditation.
The association, she said, “does not typically get into how money is spent.’’
Among the standards for accreditation listed on the association’s website, a school is required to devote “all, or substantially all, of its gross income to the support of its educational purposes and programs.’’
In addition to compensation that matched that of presidents of major universities, the Globe reported that Gee was given a new contract in 2006 that runs until 2023, when he will be 79. It guarantees him a base salary of $400,000 a year, an annual incentive bonus of at least 15 percent of his salary, an expense account that permits expenses “well above the norm,’’ travel costs for Gee and his spouse to the timeshare resort, renovations to his residence, and even reimbursement for wear and tear on his luggage and clothing.
What’s more, Gee was entitled to cash if he did not use his four weeks of vacation or 30 sick days each year.
There have also been some accusations that the school has been awarding some degrees without proper approval. For that reason, the Massachusetts Department of Higher Education has been conducting its own investigation.
Elizabeth K. Keating, a nonprofit finance expert who examined the school’s nonprofit tax filings at the Globe’s request and who concluded that school assets were being used for personal gain, said the board’s new aggressiveness is welcome and overdue.
Most such abuses, Keating said yesterday, can be addressed by diligent board members who provide true oversight.
“Perhaps it is time to talk about training nonprofit boards, amply funding and staffing nonprofit oversight agencies, and developing better research tools to help identify frauds before they become as egregious as the one at National Graduate School,” Keating said.
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