Key financial deals engineered by OSU Chief Financial Officer Geoff Chatas:
Oct 2011: OSU issued a “century bond” for $500 million at 4.8 percent annual interest. The principal must be paid in 2111. The cash is earmarked for capital projects.
Feb 2012: Huntington Bank signed a 15-year $25 million contract with OSU to be the official bank on campus, giving Huntington the exclusive right to put branch offices and ATMs across campus and make pitches to students and faculty. Huntington promised to also loan out $100 million for economic development projects near campus.
June 2012: OSU signed a 50-year lease of its 35,000 parking spaces with QIC Global Infrastructure and LAZ Parking in exchange for $483 million in cash. OSU plans to use investment earnings off the cash for scholarships and hiring more faculty.
July 2013: OSU invested $50 million with Drive Capital, a venture capital fund co-founded by Gov. John Kasich’s close friend Mark Kvamme. OSU’s investment team raised a dozen concerns about the new, untested fund but Chatas moved ahead with the deal.
A top Ohio State University administrator who was once described as being responsible for creating “a new model of financing universities” will leave the school in May with a check for $1.08 million — deferred earnings he is entitled to under his contract because he stayed in the job for five years.
Chief Financial Officer Geoff Chatas doesn’t have the public profile of a football coach or a university president, but his compensation package points to his long-lasting influence on university policy. His base salary last year was $684,503 and he earned a $50,289 bonus on top of his base.
Chatas’ last day is May 10. He is leaving after a five-year tenure during which he engineered a number of financial deals — some controversial — that will impact the university for decades to come. And one of those deals has a new twist.
Chatas was the driving force behind an agreement in June 2012 to lease for 50 years the school’s 35,000 on-campus parking spaces in exchange for $483 million in cash upfront. The deal was controversial because of the length of the lease and the ceding of control of the parking operation to a private investment firm. Now, Chatas is leaving OSU to go to work for the investment firm.
Beginning next month, Chatas will be a manager for QIC Global Infrastructure, an Australia-based investment management firm that has the 50-year lease for parking spaces at OSU.
“I’m going to be leading a new fund that’s going to be investing in global infrastructure. So things like energy and transportation,” Chatas said in an interview. “And I’m going to be building a North American team out of Columbus and New York to invest new money into new projects. They could include things like renewable energy, globally things like transportation assets that come available — airports, toll roads, things like that.”
Chatas noted that he will not be involved in QIC’s parking deal with OSU as part of his new role.
Ohio University economics professor Richard Vedder, who leads the Center for College Affordability and Productivity, said Chatas’ deferred compensation plan — allowing him to walk away with more than $1 million — “strikes me as a misuse of public resources.”
But Vedder said Chatas’ new job may also raise ethical questions. Ohio ethics law prohibits former public officials from profiting from contracts that they arranged or had a hand in arranging while serving in a public position.
The Ohio Ethics Commission does not confirm whether it is investigating or planning to investigate an ethical issue.
Vedder said Chatas’ arrangement with QIC “deserves investigation.”
“At one moment he is engineering a valuable asset, moving it into QIC’s hands and then literally three years later he is going to work with them or receive money from them in some form,” Vedder said. “It raises eyebrows at a minimum and maybe more than that.”
Bill Bain, Communications Workers of America District 4 Representative, which represents 1,700 OSU workers, also called for an investigation.
“It appears to smell,” Bain said. “It needs to be investigated by the ethics commission or state auditor’s office — someone who will do some digging.”
$121,000 on travel
A Daily News investigation published by in August 2013 found that Chatas spent $121,000 on travel during a two-year period, making trips to Iceland, Paris, India, China and elsewhere and staying in five-star hotels. OSU internal auditors too raised questions about Chatas’ travel bills.
At the time, university officials defended Chatas’ stays at luxury hotels, occasional first class flights and the use of OSU’s private yet, saying he was in compliance with university policies. An OSU spokeswoman said Chatas was expected to travel extensively for his job.
“Geoff Chatas has been charged with creating a fundamentally new model of financing universities, which requires stronger relationship-building strategies and important face-to-face engagement of partners,” Assistant Vice President for Media Relations E. Gayle Saunders said then.
Publicly, Chatas has been heralded as a financial genius who has helped Ohio State carve out new revenue streams. Gov. John Kasich entrusted him to head up a statewide task force on college affordability.
“Geoff has challenged Ohio State to look at many of our resources in a new way, all for the benefit of our faculty, students and staff in support of our academic mission,” OSU President Michael Drake said in a written statement when announcing Chatas’ departure. “His forward-thinking approach to meet the changing dynamics faced by institutions of higher education leaves the university in a strong financial position.”
Some of Chatas’ financial deals, while innovative, are impossible to measure. In one such deal, OSU in October 2011 issued a “century bond” for $500 million at 4.8 percent annual interest and earmarked for capital projects.
The principal must be paid in 2111.
Chatas also negotiated a 15-year, $25 million contract with Huntington Bank to be the official bank on campus, giving Huntington the exclusive right to put branch offices and ATMs across campus and make pitches to students and faculty. Huntington promised to loan out $100 million for economic development projects near campus as part of the contract.
OSU’s investment team raised concerns about a July 2013 plan engineered by Chatas to invest $50 million with Drive Capital, a venture capital fund co-founded by Kasich’s close friend Mark Kvamme.
Chatas moved ahead with the deal despite the objections, which included putting so much money into an untested fund.
Strong resume
Former OSU president E. Gordon Gee hired Chatas in February 2010 to oversee the university’s $5 billion budget and a team of 350 employees.
The son-in-law of a former powerful OSU trustee, Jack W. Kessler, Chatas has a strong resume in finance and energy that includes infrastructure investments for JP Morgan Asset Management, adjunct professor at OSU’s Fisher College of Business, chief financial officer for Progress Energy Inc. and senior vice president for finance for AEP, Inc.
He has solid academic credentials as well: an MBA from an international business school in France, a master’s in history from Oxford University in England and a bachelor’s degree from Georgetown University in Washington, D.C.
During his tenure, Chatas received positive performance reviews from both Gee and interim president Joseph Alutto. But both cautioned Chatas to work on his communication and leadership skills.
In his 2013 annual review, Alutto wrote: “You are quick to point out the shortcomings of your peers as well as other individuals across campus, but this year I want to you totally focus on you.”
Alutto directed Chatas to work with an external coach.
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