Mount Ida trustee tells Senate, ‘We had a perfect storm of failures’

Carmin Reiss, chairman of the Mount Ida trustees, was questioned by state senators Wednesday about UMass’s plan to buy defunct Mount Ida’s Newton campus.David L. Ryan/Globe Staff

The head of a state Senate committee said she will push to subpoena top Mount Ida College officials after they did not appear at a heated hearing Wednesday, deepening questions about the degree to which the school hid its crumbling finances before it closed abruptly.

Lawmakers spent hours on Wednesday questioning Carmin C. Reiss, the chair of Mount Ida's Board of Trustees, and University of Massachusetts Amherst leaders ahead of their planned $75 million agreement for UMass to buy the defunct school's Newton campus.

The hearing — intended to address what senators say were unanswered questions about the planned sale — only left some more baffled. Reiss was the only Mount Ida official to appear, at times giving answers that left senators visibly unsatisfied. President Barry Brown and chief financial officer Jason Potts were invited but did not attend.

Reiss told lawmakers the school made "100 percent of the required public disclosures" about its finances before announcing in April that it would be shuttered. She called it "a self-fulfilling prophecy of demise" for schools to advertise their financial issues.

"We had a perfect storm of failures," Reiss said. "Did we go out and announce, 'Hello interested students: We're teetering on the brink of insolvency. But come on in.' We didn't do that. We believed we had a plan."

At another point, Senator Michael O. Moore, a member of the Senate Committee on Post Audit and Oversight, which held the hearing, asked Reiss when school officials realized it had hit the financial "point of no return."

"It was sometime in 2017," she said, after a financing deal faltered that would have netted the school more than $6 million.

The answer drew audible gasps from the audience, which included Mount Ida students and parents.

"I learned enough to be even more concerned than I was before," said Kathleen O'Connor Ives, the chair of the committee. She said the committee should wield its subpoena power to compel testimony from Brown or Potts, though the seven-member panel has yet to decide on its next step.

"It's hugely critical . . . that we get answers from the CFO about the extent of the financial challenges and when they knew," O'Connor Ives said.

The hearing came a day after Attorney General Maura T. Healey announced she was allowing the $75 million sale to move forward, because Mount Ida says it would have been forced to file for bankruptcy protection on Wednesday if the sale did not proceed.

The president of the University of Massachusetts system, Martin T. Meehan, said Wednesday afternoon that the two sides were still negotiating closing the sale, which was announced April 6.

But in a pointed letter, Healey said she was still reviewing whether top Mount Ida officials had violated their fiduciary duties. Her office said it also secured help for some of the students to complete their degrees, on time and without added expense.

The assurances didn't quell the frustration. John Driscoll, a rising junior who testified before the Senate panel, criticized Mount Ida and UMass leadership for not doing more with students in mind. He also questioned why Healey's office had not moved quicker in its investigation of Mount Ida officials.

"I am disgusted, disappointed, and ashamed about the way this situation has been handled," Driscoll said.

Senator Dean A. Tran, a Fitchburg Republican, said it "baffles my mind . . . that neither the leadership of Mount Ida nor the trustees disclosed the financial problems to the students."

"I hope that you know you are as much at fault as the leadership of Mount Ida," he told Reiss.

Speaking briefly to reporters afterward, Reiss called Healey's ongoing review standard procedure and said she doesn't believe officials violated their responsibilities.

"We're confident that we'll do just fine in that review," she said before declining to take further questions.

UMass Amherst and Mount Ida said in April that they had come to an agreement in principle for UMass to acquire Mount Ida's 74-acre Newton campus and for students to have a path to finish their degrees. That followed an earlier effort by Mount Ida to merge with Lasell College that fell through.

Meehan defended UMass's role in acquisition. The school does not intend to admit undergraduates directly to its planned campus in Newton, but instead will allow juniors and seniors to spend an academic semester there to be closer to internship opportunities in Greater Boston.

"The fact of the matter is that if UMass were not engaged in this transaction, Mount Ida would still be closing," Meehan said. "In fact, they would be filing financial bankruptcy papers in federal court today."

But that did not shield UMass from criticism. Senator Anne M. Gobi, a Spencer Democrat, said that students "were an afterthought in all of this" and that the school played a role in leaving some in the lurch.

"There are kids here, they don't get a second chance," she said. "This is what they wanted to do, and the door has been closed on them. And you are part of closing that door."