Some question judgment of FAU president in accepting free cruise

Florida Atlantic University President Frank Brogan accepted a $7,362 Caribbean cruise in late 2005from Barry Kaye, a major donor whose relationship with the university has faced scrutiny in recent months.

Kaye, a Boca Raton insurance magnate, has pledged a total of $17 million to FAU, but has also recently sought to do business with the school.
Observers differ on whether it was ethical for Brogan to accept the gift.

Brogan and his wife, Courtney, took the Dec. 14-22, 2005 trip on the Crystal Symphony, a luxury cruise ship.

Kaye said he had no business motives when he and his wife, Carole, invited about 30 couples on the eight-day excursion. The trip was to celebrate FAU awarding Kaye an honorary doctorate, he said.

“It was friends, and he was one of my friends. It’s as simple as that,” Kaye said of Brogan. “All I did was invite him. He could come or not come.”

FAU officials said Brogan took the trip to cultivate his relationship with Kaye, who at the time had donated $5 million and was considering increasing his commitment. In 2006, Kaye agreed to increase his donation to $16 million for the College of Business, named for him in January 2007.

FAU lawyer David Kian said the trip does not violate the university’s code of ethics, or state ethics law, which forbid public officials from accepting any gift that they know “or should have known ... was given to influence the judgment or official action of the employee.”

“In 2005, there was no expression from Barry Kaye to anyone at FAU about any interest in doing business with the university,” Kian said. “To the contrary, he had a history of very significant and unselfish dealings with the university. It was no-strings-attached philanthropy.”

In May 2007 Kaye, newly appointed to the FAU Foundation board, approached Brogan about a $100 million fundraising idea, FAU officials said. The idea involves FAU taking out life insurance policies on donors with the school collecting when the person dies or selling the policies to a third party. Kaye has expressed interest in brokering the deals.

FAU officials said they haven’t given the plan much study and are a long way from deciding to proceed. Kian said the university would use a public, competitive bidding process if it did go forward with the proposal.

While Brogan’s action appears to be legal, it shows questionable judgment, said Ben Wilcox, executive director of Common Cause Florida, a government watchdog group.
“If the president felt this was beneficial to the university, the university could have at least paid his way,” Wilcox said. “If they’re trying to cultivate [Kaye] for another large gift, you could argue that the university should be taking him on a cruise.”

Brogan, who was on vacation this week, could not be reached for comment, despite attempts by phone and through his spokeswoman. The university issued written responses to a list of questions submitted by the South Florida Sun-Sentinel.
Brogan did not take personal leave days for the trip because he was on official university business, according to the statement.

Kaye treated the Brogans to a first-class experience. Brogan and his wife stayed in Stateroom 1001, which according to the Crystal Cruises Web site is a 491-square-foot penthouse suite, complete with a private veranda, personal butler service, a Jacuzzi-brand bathtub, separate shower and bidet.

Bridge Holidays, the travel agency that booked the trip, paid $232 in gratuities. Bridge Holidays owner Roberta Salob said this is standard practice for travel agents. Bridge Holidays specializes in teaching the card game bridge to passengers. A financial form Brogan submitted to the state lists the trip as an “educational cruise.”

“The term ‘educational cruise’ ... refers to the fact that this was an opportunity to educate Barry and Carole Kaye on the future growth of the university, and, in particular, the College of Business. It was not meant to refer to the ‘bridge’ component of the cruise,” the statement said.

Brogan reported the cruise to the state Ethics Commission, as required by law, in June 2006. The commission does not judge whether a gift is appropriate unless someone files a complaint, spokeswoman Kerrie Stillman said.

Critics say the gift could give the appearance of favoritism to Kaye for any potential business ventures the university may want to undertake.
“You want your president to be free of encumbered influences,” said Mark Jackson, associate professor of chemistry at FAU. “You want him to make a decision based on what’s good for the university, not Barry Kaye.”

Earlier this year, some faculty members also questioned whether FAU was entering into a business relationship with Kaye when it co-sponsored two symposiums on life settlements, an area in which Kaye does business. With life settlements, private companies buy the life insurance policies of the elderly and collect when they die.

FAU officials said Kaye didn’t sell any policies at the symposiums, but they did give Kaye contact information for those who attended. Some critics have questioned whether the symposiums and the life insurance plan are attempts by Kaye to try to make back his donation to FAU.
“God no. Not in a million years,” Kaye said. “I’ve given $17 million. I’m not going to make that kind of money off them.”

Norman Tripp, chairman of the FAU board of trustees, said the university does not have a business relationship with Kaye. He said he does not think Kaye should be eligible for any university business as long as he remains a member of the Foundation Board.
But Tripp sees no problem with Brogan accepting the cruise.

“I’m not going to say the president shouldn’t socialize with someone who wants to donate millions of dollars to the university. Frank was not doing it for personal gain,” Tripp said. “The law requires he disclose it, and he did disclose it.”
Some FAU faculty also have no concerns about the gift.

“I don’t see any influence to the benefit of Mr. Kaye,” said Eric Shaw, a professor of marketing at FAU and president of the Faculty Senate. “In this instance, the university received the benefit. That’s why I don’t see a problem with it.”
Scott Travis can be reached at .(JavaScript must be enabled to view this email address) or 561-243-6637.