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April 19th, 2008
Texas State severs ties with embattled philanthropist

By BRAD ROLLINS
Managing Editor

Texas State University is buzzing with news of President Denise M. Trauth’s declaration that she will sever ties with — and return a half-million dollars to — the troubled Austin-based Roy F. and Joann Cole Mitte Foundation.

Scott Mitte's mug shotIn an e-mail sent to faculty and staff, Trauth said she had resigned from the foundation’s board of directors and that the university would not accept further contributions from one of its largest all-time donors. In addition, she wrote, the university will return the $500,000 used to endow the Mitte Honors Program and rename the program.

“We are saddened by our decision to discontinue a relationship that was so valued both by two of our most outstanding alumni and by our entire University community; but, we have concluded that we cannot continue Texas State’s relationship with this Foundation,” Trauth wrote.

She said the decision was prompted by the March arrest in Travis County of the foundation’s director, Scott Mitte, on a charge of possessing 29 grams of cocaine. But the Mitte Foundation has been under increased scrutiny on other fronts recently as it scaled down its contributions to a number of universities, citing financial difficulties.

This year, the foundation announced that it would not be able to honor scholarship commitments at Indiana University, Ohio State and Penn State, according to a Chronicle of Higher Education report. Instead, the article said, the foundation would focus primarily on Texas State, where the organization’s founders and namesakes received undergraduate degrees. In 2003, the foundation withdrew $9.4 million from the University of Texas’ McCombs School of Business after its officials learned Scott Mitte had been sued four times for sexual harassment by female employees of the foundation and an insurance company founded by his father.

The foundation’s gifts to Texas State include $12.5 million to establish a scholarship program and $5 million to endow professorships. Trauth said the university will use other funds to maintain those programs “under different designations.” The e-mail did not say if she would seek to rename the massive Joanne Cole and Roy F. Mitte Complex, which houses the university’s physics and technology schools, or a lecture series that bears their name.

RELATED IN THE MERCURY

» Full text of Trauth’s e-mail on severing ties with Mitte Foundation

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7 thoughts on “Texas State severs ties with embattled philanthropist”

  1. There has to be more to this story than the coke. I’ll bet she knows more is coming because she was on the board.

  2. I just hope she knows what she’s doing. The Mittes were some of the university’s most generous supporters. That kind of relationship isn’t easy to replace.

  3. Financial Industries Corporation fired both Roy and Scott Mitte due to the theft of funds that were used for personal expenses and for start up capital for the Mitte Foundation. This matter was settled out of court. Scott Mitte has an ongoing lengthy history of sexual harrassment charges and cocaine abuse. Scott Mitte’s felony arrests for over 34.5 grams of cocaine was the last straw. Long term grants to other major universities were canceled by the foundation due to lack of funds at the Mitte Foundation i March of 2008. As early as 2003, the lavish expenses of Scott Mitte and the foundation were reported by numerous higher education newsletters and national newspapers. The Mitte Foundation’s corruption and Scott Mitte’s cocaine fueled delusions of grandeur could no longer be tolerated by the President of Texas State as the moral and ethical issues far outweighed the foundation’s contributions to Texas State University. Denise Trauth should be commended for her actions and not chastised.

  4. Rehabilitation at the Texas Department of Corrections is what Scott Mitte needs and is the fitting ending to a foundation that has been plagued with financial improprieties, sexual harassment lawsuits/settlements, lavish spending, double felony cocaine arrests(34.5 grams), Roy & Scott Mitte’s legal settlements to avoid SEC violations, corruption, misuse of public held corporate funds to start the foundation, canceled scholarship monies due to Scott Mitte’s cocaine fueled Mitte Foundation leadership,etc, etc, etc

  5. In severing the monetary support from the Mitte Foundation, the leadership of Texas State University should be commended and praised for such a heroic action.
    Controversy regarding the Mitte’s financial problems with FIC and Scott Mitte’s history of sexual harassment charges and cocaine abuse was widely witnessed during the duration of my employment with the Mitte empire. Roy Mitte even hired an off duty detective as a personal watchdog to keep Scott Mitte’s behavior and cocaine use away the press over fifteen years ago. Texas State should distance itself from the Mitte name as the guise of philanthropic actions were tainted with criminal actions and controversy from the beginning. Perhaps Texas State should rename a Criminal Justice Building, “The Mitte Criminal Justice Complex”

  6. Why is it taking the Travis County DA’s office over a year to bring Scott Mitte’s case to court? Big money has stalled the wheels of justice as other crackheads & cocaine dealers are now doing their rehab at TDC. We will have to continue to wait and see if the criminal justice system in Travis County actually prosecutes wealthy cokeheads. Perhaps big money wins and justice for the citizens of Travis County looses.

  7. Just because you have tons of money that you donate, does not make you a philanthropist. Roy Mitte destroyed a lot of people on his rise to the top. Scott Mitte just rode his coattails and his history of sexual harassment goes back at least to the 1980’s. Thanks to Ms. Trauth for standing up to them and their foundation.

    I worked for a great insurance company that Mitte bought and destroyed in the late 1980’s. A lot of people suffered for this man to make his millions.

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