Lawsuits filed by David Garafola and David Schwartz have been settled with the university.
Former administrator sues Webster University
By Carlos Restrepo
(Webster Groves, Feb. 3, 2011) David Garafola, former Vice President of Finance and Administration for Webster University, has sued the university for employment discrimination. The lawsuit was served to Webster President Elizabeth Stroble on Jan. 27.
Webster informed Garafola his contract would not be renewed on April 28, 2010. Garafola alleges his contract with the university was not renewed because of his repeated efforts to voice his discontent with several decisions made by the administration.
According to the lawsuit, Garafola alleges he “was wrongfully terminated and his contract was not renewed because of his efforts to inform Webster’s administration and governmental authorities of the fraud occurring as a result of Webster’s improper admissions and financial aid procedures, because of his efforts to stop and prevent the repeated conflicts of interest practices … and because he voiced his displeasure of the Board’s misrepresentations to the community and their lack of fair dealing in their business practices.”
The Journal was unable to reach Garafola for comment at the time of publication. Garafola’s lawyers declined to comment.
(Download the PDF of the Lawsuit: Garafola.David Report)
On Jan. 28, Stroble sent an email to the Webster community, labeled ‘Confidential messag,’ addressing the lawsuit.Stroble said in the email that since she became president, her and the executive committee of the board of trustees had been concerned about the need for greater transparency and openness in the administration. She said, based on the recommendations of key trustee committees, they decided not to renew Garafola’s contract once it expired.
“Mr. Garafola was treated fairly as a departing employee,” Stroble said in the email. “He received every payment and benefit due to him under his employment contract.”
Conflict of Interests
Garafola voiced concerns over two bidding processes in which he thought the board of trustees had acted unethically, according to the text of the lawsuit. The first occured when a contractor, whose president was a board member, submitted a bid for a new telephone system. Even though the bid was not the lowest bid, the contract was awarded to that company.
Garafola also complained about the contractor who was awarded with the construction of the new school of business and technology building. Paric, the contractor, whose president is Webster board member Joseph McKee III, submitted a bid with a letter announcing a $100,000 gift to Webster.
“Throughout his process Garafola repeatedly objected that this process was not ethical and not in the best interest of Webster to the board,” the lawsuit alleges.
Stroble said any media inquiries regarding the lawsuit would go through Susan Kerth, media relations officer for Webster. Kerth said all the contractors mentioned in the lawsuit were treated fairly.
“The construction contracts to which Mr. Garafola refers were arms-length transactions and the winning bidders were, in fact, the bidders recommended by Mr. Garafola,” Kerth said. “We will have no problem discussing the terms of these awards in court, should that become necessary. The companies that were awarded these bids are solid, reliable firms that submitted fully competitive bids representing best value to the University.”
Financial Aid Fraud
Garafola alleges in his lawsuit that the University did not take the necessary steps to report to the U.S. Department of Education the financial aid fraud in which Michelle Owens, an inmate in a South Carolina prison, enrolled 15 inmates on Webster’s online learning program and stole thousands in financial aid money.
Garafola said the U.S. Department of Education threatened to audit the university unless the university cooperated with the Department of Education in informing them of the fraud.
“Webster’s president told Garafola that the President’s Office would be responsible for reporting to the U.S. Department of Education and supervising changes to Webster’s procedures, but the President’s Office did not perform that activity as required,” the lawsuit alleges.
Kerth said the university took all the necessary steps to investigate the fraud.
“We have cooperated fully with the ongoing federal investigation, and an indictment has been issued against a person in South Carolina who is alleged to have filed a number of fraudulent loan applications,” Kerth said.
According to the lawsuit, as a direct result of his termination, Garafola has suffered loss of an annual compensation of $320,000 and damage to his reputation, resulting in Garafola’s inability to find a new job. Garafola has asked the university for a compensation for his injuries, which exceed $25,000.
“Bottom line, Mr. Garafola’s lawsuit appears to be about money,” Kerth said. “Mr. Garafola has received all of the payments due to him under his employment contract. However, as his lawsuit indicates, he seeks much more. Webster University believes it has treated Mr. Garafola fairly and that he does not deserve any of the additional compensation he is seeking.”
Stroble said she will keep the Webster community informed of any developments regarding the lawsuit.
“This is a very sad situation and it pains me to have to communicate with you about it,” Stroble said. “However, I believe strongly that it is important to keep you in the loop with regard to matters such as this, and I will continue to do that as developments in this lawsuit warrant.”