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Office of the Chancellor / Public Affairs
Tuesday, June 10, 2003
 

Daily Bulletin 6-10-03

Editorial: Records raise questions that need answering

 

The revelations about the financial practices of Western University of Health Sciences raise troubling questions about the school's management. University records released in a court filing show top executives giving themselves cash advances and zero-interest loans since 1981.

Allowing top officers to approve huge loans to themselves asks for trouble. Where are the checks and balances?

University President Philip Pumerantz approved more than $250,000 worth of salary advances for himself between 1981 and 1990. He repaid most of that amount by 1991, but received a further $74,000 in salary advances during the 1990s. Two other top executives, neither of whom work for Western any more, also received tens of thousands of dollars in salary advances.

These advances operated as interest-free loans. The executives could pay the money back over time, without the fuss of interest charges such as banks or other lenders would require. And the payments could be cheap: One recipient was allowed to repay the money at a rate of $5 a month.

The Attorney General's Office declined to comment specifically on the case, but pointed out that loans from a non-profit organization to its trustees, officers or directors violate state and federal law.

The university says its financial practices comply with the law and the highest standards, and adds that the documents released so far don't present the full picture.

If that's the case, it must make a fuller explanation of these events if it hopes to avoid damaging the credibility of its leadership.