Money resulting from the sale of stock donated to MU by former Enron chairman Kenneth Lay, convicted Thursday of fraud, is worth about $1.8 million today, said Joe Moore, spokesman for the University of Missouri System.
The $1.1 million gained from selling the Enron stock, which MU received in 1999, was placed in a university account, where it has since been accruing interest, Moore said.
What happens now to the money — given to endow a chair in international economics at MU — is in the hands of the UM System Board of Curators, Moore said.
MU Chancellor Brady Deaton said the UM System has final authority in the matter.
Board President Angela Bennett directed questions about the Lay verdict and its implications to UM System President Elson Floyd. Moore said Floyd was on the road and not available for comment.
However, Moore said he was “unaware of any immediate plans to change the status of Mr. Lay’s donation to the University of Missouri.”
“The agreement with the donor still stands,” Deaton said.
Lay was indicted in 2004. In September 2005, Lay, an MU alumnus, asked Deaton to direct his donation to Hurricane Katrina relief funds, according to a release from the UM System. Deaton told Lay he would make that recommendation to Floyd, and later did so, the release said. MU kept the money.
In February, a trustee of Lay’s assets requested that the funds be used to pay Lay’s legal fees, the release said. Again, the university did not release the funds.
The decision on what to do with the donation is not solely focused on ethics.
“There are significant legal issues involved,” Deaton said.
At Lay’s request, the chair was renamed The Kenneth L. Lay Chair in 2002 and has remained vacant since its creation. The UM System released notes that said between March 2000 and March 2003, three scholars turned down the position.
The Associated Press reported this week that when “28 Missouri professors urged Deaton and other campus officials to reject the Lay donation soon after Enron filed for bankruptcy in December 2001, Deaton suggested the money should be returned if Lay is found guilty of ‘serious issues.’”
In an e-mail Thursday, the chancellor said, “I don’t recall ever using the term “serious issues.’ I would have intended to just use the term ‘felony.’”
All of Lay’s convictions are felonies.
MU’s Faculty Council, which makes recommendations to the administration on matters important to university faculty members, initially favored returning the donated money if Lay was convicted, said council chairman Bill Lamberson. He said the council has since learned that returning the money was not an option.
“It appears to me that we are held to filling the chair in economics,” said Lamberson, noting that he prefers the chair be related to business ethics.
Lay graduated from MU with a bachelor’s degree in economics in 1964 and received a master’s degree from the university the following year. He went on to receive a graduate degree in economics from the University of Houston in 1970.
In 1994 and 1995, Lay made donations to the University of Houston to create two academic chairs. A University of Houston spokesman replied to questions with a prepared statement expressing gratitude for the donations and saying it would be inappropriate for the university to comment on the legal proceedings.