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Stanford Bookstore's vacation home goes on market
STANFORD -- The Twain Harte vacation home that gave Stanford Bookstore managers and board members serious headaches last year has been put up for sale for $425,000.
The large home, with sunken living room, two master bedroom suites and a redwood deck and spa, was at the center of a controversy last year when the Stanford Daily reported that the bookstore leased the house from its top two managers, general manager Eldon Speed and assistant general manager Philip Chiaramonte.
The house, and the lease of eight vehicles for managers, raised questions about inappropriate perquisites for employees of the store, which is classified as a nonprofit public-benefit corporation.
Over the years, the bookstore paid more than $283,000 in lease payments and costs of other items at the Sierra foothills property, including utilities, cleaning, furnishings and improvements.
Law Professor Robert Weisberg, interim president of the bookstore board, said that proceeds from a sale would be properly distributed between the bookstore and Colleagues Management Services Inc., the consulting company set up by Speed and Chiaramonte to purchase the land and construct the house.
It is impossible to say if the bookstore, which is independent of the university, will make a profit on a sale, Weisberg said, noting that the house may be difficult to sell because of an unfavorable market. He emphasized that the purpose of the sale is to "compensate the bookstore to the greatest extent possible for all the money it paid toward the house."
The two-story, four-bedroom home was viewed as a fringe benefit for employees and way of providing Speed and Chiaramonte a form of deferred compensation or retirement benefit resulting from the home's appreciated value, according to a report commissioned by the board after the controversy broke.
In other bookstore news, the civil investigation of the bookstore's finances launched by California Deputy Attorney General James Schwartz last year is continuing, Weisberg said.
"Although we can't predict what actions he'll take," Weisberg said, "we hope he will view the steps we've taken as insuring that the bookstore will comply above and beyond the requirements of California law."
Asked about the total legal and auditing costs associated with the controversy, Weisberg declined to cite specific figures, but said that costs "unfortunately continue to mount because Mr. Schwartz has not seen fit to complete the investigation and to allow us to concentrate on improving the governance and operation of the bookstore.
"How high the costs go essentially turns out to be his decision, not ours," Weisberg said.
Last October, Schwartz told Campus Report he was investigating "whether there was a misuse of funds" and if so, who was responsible and what needs to be done to recover the money.
Among steps taken to tighten up the bookstore operation is a sweeping revision in its governance structure.
In late November, a majority of the 36 faculty, staff and students who made up the "membership" of the nonprofit corporation approved new bylaws that called for elimination of their body.
The bylaws also provided for expansion of the board to as many as 15 individuals.
The process of expanding the board now is under way, Weisberg said. Two new members already have been added:
In addition to Weisberg, other current board members are Agnes Peterson, curator of Central and Western European collections at the Hoover Institution; Nancy Padgett, director of finance for the School of Humanities and Sciences; Morton Winston, a Los Angeles businessman and lawyer who also served on the external audit committee; and William Lazier, a lecturer at the Graduate School of Business who also teaches courses at the Law School, with particular emphasis on business ethics.
In the next several weeks, the board will solicit applications to fill as many as eight more slots, Weisberg said. Announcements will be placed in Campus Report and the Stanford Daily seeking interested parties, and nominations will be sought from the Associated Students, the Alumni Association, the Provost's Office and the Faculty Senate.
Some interim members may be appointed in the coming months, Weisberg said, but elections for full, three-year-term members will not be held until next fall. Some individuals will be elected for one or two years to stagger the terms, Weisberg said.
"We expect to have a balanced board representing diverse views and types of expertise," Weisberg said, explaining that the nominating committee consisting of himself, Augsburger and Hastorf would look for interested students and faculty, while also searching for "alumni or other outsiders who have an interest in nonprofits."
"I feel more comfortable now that in Lazier, Winston and Augsburger we have some very renowned business experts who come with a fresh perspective. We're also grateful to have an unquestioned faculty statesman like Al Hastorf serving as well," he said.
The board also is going to ask the Faculty Senate and the Associated Students to create either two separate advisory committees or one combined committee.
The new group(s) would not be part of the bookstore's formal governance structure, but would be invited to at least one board meeting each year to convey faculty and student views on the bookstore operation.
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