N.H.-chartered college said to leave international trail of unpaid bills
N.H.-chartered college said to leave international trail of unpaid bills
St. John International University Inc., a New Hampshire-chartered institution whose campus is in an ancient castle in Italy, appears to be in serious financial trouble, casting a shadow on the future of the college's 65 enrolled students, including about 20 from the Granite State.The fledgling university is allegedly months behind on its bills, has lost most of its U.S. staff -- its U.S. phone is disconnected -- is reportedly fighting to hold on to its Italian castle and is the target of at least two lawsuits on both sides of the Atlantic, including one by its former CEO, George Hagerty, who previously was president of Franklin Pierce University in Rindge for 16 years.Because of that "contract labor dispute," the university has declined to respond to detailed questions, wrote high-powered Concord lobbyist James Bianco Jr. - the school's secretary, board member, agent and attorney - in an email after a St. John board meeting on March 19."The board has conducted its due diligence and has been assured that SJIU's financial situation is stable," Bianco wrote to NHBR.But Hagerty and three staff members have complained to the New Hampshire Higher Education Commission, the state agency that approved and regulates the university. They wrote a month earlier of the "the systemic unraveling of the university that is now occurring,"Their letter added: "Our belief that this unfolding matter is escalating in an unhealthy direction, and that the welfare and interests of students, faculty, and staff are approaching the point of compromise."That commission is chaired by Father Jonathan DeFelice, president of Saint Anselm College and a St. John board member.DeFelice did not return NHBR's phone calls, but the commission's vice chair, University System of New Hampshire Chancellor Edward MacKay, said a complaint has been filed, although the commission's board has not met on it."I presume that he [DeFelice] will recuse himself," said MacKay.The former Postsecondary Education Commission has not had an executive director due to budget cuts and its reorganization into the Department of Education, so MacKay referred all questions on the matter to Education Commissioner Virginia M. Barry, who was on vacation and could not be reached by deadline.Several of those who wrote the letter to the higher education commission said that there has been no response from either the commission or the board about their complaint.Attached accountThe commission was, however, actively looking into a proposal allowing the startup of another college to be chartered in New Hampshire but whose campus would be in Jordan, according to N.H. Sen. Lou D'Allesandro, D-Manchester, another St. John board member who recently returned from the Middle East country as part of the commission's "due diligence."D'Allesandro, who sponsored the legislation to grant St. John degree-making authority, said he was hoping that the state could become a center to promote such international education institutions."Why not?" he said. "We need the jobs."But thus far, jobs generated by St. John have not been paying, according to Hagerty in his lawsuit and other staffers in various interviews with NHBR.In his suit, Hagerty claims that he was only paid one month out of the five he worked on his $135,000-a-year contract, despite pleading for his back pay.Hagerty's suit -- filed in Merrimack County Superior Court Feb. 15 -- is accompanied by a $100,000 attachment to the university's bank account at TD Bank.In that filing, Hagerty -- who now lives outside Phoenix, Ariz. -- alleges that "other key employees of the university have also not been paid wages due and owing."Judge William McGraw approved the attachment on Feb. 23.Lorenzina Zampedri, chair of the university's board of directors and named personally in the suit, referred all questions about the status of the university to Bianco.Although Bianco said it would be "inappropriate" to comment in the press on the suit, in a legal response to Hagerty's attachment, he wrote that Hagerty -- who controlled the university's finances -- breached both his contract and his fiduciary duties, "causing great harm" to the university.Even if the claim were legitimate, wrote Bianco, $100,000 "is excessive and far exceeds any conceivable amount" of what Hagerty was owed.Hagerty, in a statement to NHBR, said that he was saddened by these "hurtful allegations" and "spurious charges.""SJIU's leadership is fully aware that I had no control over the University's financial books and records," Hagerty said.Zampedri replaced Hagerty with Piero Ceria, her husband, who is now acting president.Vendors unpaid tooHagerty's charges were echoed by other St. John staff members who signed the letter, except for one signatory, Mary Beth Benbenek, dean of academic affairs, who declined comment because of a wrongful termination suit she said she filed in Italy. Benbenek was terminated on Feb. 20, according to the letter."The more we stood up, the more we fell from grace," said Anne Blake, former dean of admissions and student life, who said she left a promising business in Burlington, Vt., to take a position with Hagerty. She was terminated the week after Hagerty left.Blake said she stood up not so much on her behalf but on the behalf of staffers and faculty who weren't getting paid, and especially because of her concern for the students.St. John students have been working toward degrees in a range of subjects, from environmental architecture to international arts administration, and others have been studying abroad at the university for the semester.Several of the students attend the New Hampshire Institute of Art, Plymouth State University and Keene State College, Blake said.It wasn't just staff that wasn't getting paid, Blake said, but vendors as well.Perhaps the most publicized dispute is with the city of Vinova, Italy, over a contract allowing the university to operate in Della Rovere, a 16th century castle.The dispute, according to a university employee, arises from an agreement calling for the university to renovate the upper floors of the castle as a condition for the grant to use it, and it has spilled onto the pages of the Italian press."We believe that St. John failed to fulfill contractual obligations," said Vinova Mayor Maria Teresa Mairo in an article published Feb. 8 in the newspaper L'Eco del Chisone. "Unfortunately we must acknowledge that their project did not work, and we cannot have all the developments that we wanted."Blake told NHBR some students were also worried about their more humble abodes. The school sponsored rental housing located in the nearby city of Torino, a picturesque gateway to the Alps that was the site of the 2006 Winter Olympics.Students pay for housing as part of their tuition, room and board package (which is about $20,000 a year), Blake said, but the school was late in paying the landlords."One student let us know that he was basically going to be evicted because the school wasn't paying rent," Blake said. "They shouldn't have to be in that position, with landlords coming to the school demanding to be paid."Those running a nearby café also complained to Blake about late payments, she said, "so now we weren't sure about being able to continue providing meals. This is traumatic to daily be putting out these fires, not knowing day to day whether they get a meal, have to leave their apartments."And, Blake said, as teachers left over pay disputes, students were uncertain about their courses, both because some faculty left and others canceled classes in protest.Giuliano Pairone, former chair of the college's Architecture Department, was one of the professors who left, though he said he is still collaborating with the university.Pairone said he began teaching in September 2010 and stayed until February, even though his salary was paid sporadically and salaries had been cut in half in September 2011. He said he kept his ties to the school because things were starting "to get better, much better" after Hagerty came with his "American team".He continued to collaborate because "I did not want to act against my students," he said, adding that he was finally paid in full on March 16.Zampedri filled the vacated positions with qualified Italians, but -- the letter to the New Hampshire commission complained -- "none had experience in American higher education" and that expertise was needed in an American educational institution.There was also a rental dispute involving St. John's Concord headquarters, according to Andrea Brody, dean of international programs, who was dismissed along with Blake.Brody worked out of that office, located behind Coldwell Banker J. Hampe Associates of Concord at 35 Pleasant St. She said she was contacted by the landlord for rent due in July, and had not been paid when she turned in her keys in February.This is important, she said, because the state charter requires that the school keep a physical location in New Hampshire. The Concord office phone is disconnected, but the St. John sign still hangs above the office door, which was locked when NHBR visited on March 16.The landlord, Judith Hampe, did not return phone calls to verify if the office was still being rented by St. John.The letter to the higher education commission claimed that the board was notified about the various financial difficulties as far back as December, but it is unclear exactly what information was passed along.D'Allesandro said Zampedri briefed the board that key staff had left, but was not aware that they had not been paid."We were assured that everything was under control," D'Allesandro said.Other board members were N.H. Sen. Sylvia Larsen, D-Concord, Lisa DeStefano of DeStefano Architects in Portsmouth and David Li, vice president of Elliot Hospital in Manchester.In May 2010, Zampedri listed herself as the "sole incorporator" in amended articles of incorporation that increased the number of shares from 2,000 to 1 million.The letter also alluded to an attempt to obtain financing from the university's minority shareholder, University Advisors International.Both Blake and Brody lauded Hagerty for that initiative and blamed Zampedri for not going through with the deal.According to the New Hampshire Secretary of State's records, UAI was incorporated by John Forman, owner and CEO of O'Brien Energy in Portsmouth, and W. Donald Gough, president of Gough Management Co. Inc. in New Castle. Messages left with both at were not returned by NHBR deadline.CORRECTION: Patricia Parpajola has never been a member of the board of trustees of St. John International University, as a previous version of this story incorrectly reported.
This article appears in the March 23 2012 issue of New Hampshire Business Review