Investigating Kannam: CT Attorney General Probes Case

, by Rob Wohl, Editor-in-Chief

Connecticut Attorney General Richard Blumenthal, a recently-announced candidate for U.S. Senate known nationally for his involvement in high-profile suits against the tobacco industry, polluters, and subprime mortgage lenders, has opened an investigation into the alleged misconduct of the University’s former Vice President for Investments, Thomas Kannam. The Attorney General’s office is attempting to determine whether Kannam misused any donated funds.

“My office is responsible for protecting charitable dollars and taking action when necessary to ensure that donated dollars are not diverted or misused,” Blumenthal wrote in a statement that his office provided to The Argus.

Jack Chin ’85, a law professor at the University of Arizona and a former white-collar crime prosecutor, explained why the misuse of charitable funds is of particular interest to the state.

“Because charitable funds are tax-deductible, and they are supposed to be used for particular charitable purposes, Attorney Generals often have a role in monitoring charities,” Chin wrote in an e-mail to The Argus. “It also is the case that criminal prosecutors are more interested in crimes involving public and charitable funds than they are with private businesses which can take care of themselves.”

The involvement of the state does not necessarily mean that any criminal proceedings are underway. Rather, the state may be the only party with the standing to bring a civil suit.

“In contrast to a business corporation, where shareholders can bring lawsuits against the university and its officers and directors if they misbehave, virtually nobody but the state attorney general has standing to bring suit against a charitable nonprofit corporation and/or its officers and directors for violation of their duties,” wrote Henry Hansmann, a Professor of Corporate Law at Yale in an e-mail to The Argus.

According to Blumenthal, his office is working in cooperation with the University’s administration. David Winakor, Wesleyan’s General Counsel, could offer no comment on the substance or extent of the investigation, although he did say that he was unaware of any investigation into whether the University failed in its oversight responsibilities.

“If the Attorney General’s office chooses to use its resources to look into this claim, they will find no evidence of misappropriation of donations to Wesleyan,” said Stephen J. Fitzgerald, Kannam’s attorney.

According to the University’s Vice President for Finance and Administration John Meerts, the University is not claiming that Kannam abused Wesleyan’s endowment. Meanwhile, the state’s investigation is in an early stage.

“If any charitable funds intended to benefit the university and its students were maliciously misused for personal gain, my office will work with Wesleyan University officials to take whatever additional action may be appropriate,” Blumenthal wrote.

42 Comments

  1. Question

    KEY QUESTION – Were Kannam’s compensation and travel expenses paid out of endowment funds?

    I suspect they were as any charitable organization has overhead and administrative costs. Running the endowment (salaries, T&E, etc.) would be one of those expenses.

  2. Look at the tax filings

    The endowment files with the IRS and the State of Connecticut. The answer to whether endowment funds were misappropriated may lay there. As part of the filing, administrative overhead costs would have to be documented in order to determine the cost of fundraising and administration, or, how much of charitable giving goes to cover administrative expenses versus how much of a dollar contributed goes for the intended purpose of the giving. If endowment operating costs are included on these forms, then any funds that went for travel, entertainment, salaries, etc would be subject to scrutiny.

  3. alum2

    Those filings are called a Form 990, which is what every charity/foundation has to file. I believe they are easily available online. I, too, wonder if those are worth a close look. There may be unintended consequences for the university, with issues such as oversight and conflict of interest that go way beyond Kannam.

  4. Waiting To See

    There are a lot of defendants in this case.

    If one or more of the allegations are true, it is likely that one or more of the defendants will “come clean” at some point.

    Why go down with the ship if you know your involvement is incidental? It would make no sense.

    Likewise, if your involvement is somewhat more than incidental, why not come clean and try to minimize damage to yourself or your company? Spending 10’s of thousands, if not 100’s of thousands, of dollars on a defense makes no sense. The only ones who win are the lawyers.

    If the allegations are true, the question is, “Who will be the first to flip?”

    These are likely very anxious days for Mr. Kamman if there is a shred of truth in the allegations.

    If the the Connecticut State Attorney General Blumenthal enters the fray, the stakes could be multiplied 1000 fold.

    And its also possible that Mr. Kannam could be the first to come clean if the allegations are true. That would make following this case incredibly interesting. What would the other defendants do? Would it become a free for all? Could there be suits filed by one defendant against another defendant?

    This case is far from over.

  5. Argus Reader

    Alum 2

    If the Form 990 contains overhead costs such as salaries, travel, expenses, etc, isn’t that a defacto representation that Kannam’s salary and travel expenses came directly from endowment charitable contributions? Is there a net number on the form? charitable endowment proceeds (-) overhead costs (=) net endowment roceeds? If so, that would imply that Mr. Kannam’s “costs” came directly from contributions. So any misappropriated overhead funds would imply misappropriated charitable contributions – which would justify Blumenthal’s involvement.

  9. Outraged Taxpayer

    Look, let’s cut the crap… there is so much evidence against Kannam and his “friends” that he is obviously at least guilty of screwing off on personal interests on “company” time. He is also likely guilty of double billing expenses and going on junkets while telling people he was on “Wesleyan business.” He is a liar, a crimminal and a thief. All this lawyer bullshit is just a smokescreen. I’m sick and tired of the hard earning taxpayers and other honest people getting screwed and being taken advantage of…. it is too much… first it was Boesky, then Skilling, then Kozlowski and Madoff… now it is Kannam, Gill and other morons. Enough is enough…. convict and cane the bastards for God’s sake. Enough liberal dues diligence. Let common sense rule.

  12. Political pablum

    Political theater. Blumenthal’s statement on this case are just populist rhetoric in an election campaign. Doubtful that he’ll have the time or the justification to build a case against Mr Kannam.

  13. Everybody Loses

    Current students, alumni – the Kannam family destroyed. The matter could have just ended quietly and discretely with less loss of face to everyone. Its likely Kannam felt little rapport with the current Administration and perhaps was just working at ways to get on with his life and phase out of Wesleyan. It could and should have ended on a note of mutual understanding.

  14. Jumping for Joy

    Everybody Loses, you are right. The problem is that Kannam, Gill and everyone involved is greedy, selfish and dishonest. Shameful.

  15. Monopoly Board

    Kannam, Gill go straight to jail. Do not stop at Go. Do not collect $200. Go straight to jail where both of you and your ridiculously guilty spouses belong. Let Jeffrey Skilling look after your kids while all of you are incarcerated.

  16. Butters

    Everybody loses,

    Are you frickin serious?

    Why don’t you write a check out of your persoanl account to cover all the misappropriated travel funds and the $3 million. Then we can talk about it going away.

    He did not get along with the current Admin because they were on his case fool.

    I’ll show you a note of personal understanding. ITS CALLED A $3 MILLION JUDGMENT NOTE AGAINST THE “THE TAJ” KANNAM AND HIS COMIC BOOK AUTHOR WIFE

    Get in the real world

  17. Eric Cartman

    Monopoly Board,

    I think its more like, Go directly to Canada or India. Do not pass go. Do not collect $200. Get out of town. (Ooops, can’t go to India, Ratan Tata will have a border hold in force now that you have brought his name into this scam. Say goodbye to Bollywood).

    I gotta get me some of that Cross Border Capital. Seems like EZ street once you score a sucker. Oooo Baby. I be talkin’ Cross Border CAP-EEE-TAL.

    Get a little Super Bowl Boooo-TAY

    Chase a little tail with my man Tiger at Torrrrr-RAY

    Spank that Minnie Mouse at the Disney World. I be talking mouse tail… you dig?

    You know what I be talkin’ ’bout!!!

    Whoooo Whoooooo What a life baby!

  18. Kannam's Golf Bag

    What up Tommy Boy? I’m sitting in your garage full of dead spiders and dust. What happened?

    First we are playing Torrey Pines one week, and then Doral the next week. Then all of a sudden I’m sentenced to the garage. What happened?

    C’mon dude, you promised me Pebble. You said that we would do Dubai and that new course outside of Mumbai that you fell in love with during you last trip to India. What’s up?

    My balls are getting restless. The putter is still strong, but showing signs of going limp. The drivers can still ram it home, but their heads are starting to dry out and crack.

    What happened Tommy Boy?

  19. Chloe O'Brian

    Dear Mr. Kannam,

    Due to a stop payment order on the last check from the Taj, I am afraid CTU will no longer be able to provide you with research and investigative services. Your account is seriously overdue.

    Should you like us to reinstate your account, please remit a check to cover the balance of monies owed. We can no longer accept future earnings from your wife’s book as collateral. They are simply insufficient now that this book is ranked #614,477 at Amazon.com.

    Sincerely

    Chloe O’Brian
    Asst to Jack Bauer
    CTU Headquarters
    Brooklyn, New York

  20. Tiger Woods

    Hey Thomas, you free this weekend? I figure we can sneak out this weekend and get laid.

    Our wives will never know it. Hell, I even arranged a “look-a-like” walk around that Sex Addicts clinic so that the National Enquirer would think I am rehabilitating. Hahaha!

    I know you are great a lying and you love to deceive people, so telling your wife you are out with your buddies sewing up another deal is a piece of cake for you, right?

    Heck she is probably off banging the milkman anyway, so what the heck… get your putter ready and let’s have a blast!

  21. Scrabble

    Hey Monopoly Board, I think Kannam and his buddies have also had a chance to dip into Scrabble a bit. They are horrible at making up words.

    For example: Sorry, but “Oucherooooo” is not a proper word. BUT “hats” is a word!!!

    Good for Thomas to be able to spell and use such a ubiquitous term.

    I mean hats is used for many things, especially when you are trying to deceive other people or if you have a CONFLICT OF INTEREST, as in “I wear two hats” and therefore can reap personal gains by using one hat for TWO CONFLICTING PURPOSES!!!

    Brilliant, eh Monopoly Board? Kannam score 21 points with “hats” on the triple word score box!

  22. Holy Cross Border Collie

    Hey, has anyone dug up any more dirt on Cross Border Capital Advisors? I know that Gill said it was nothing, but that Canada website made it look like a real money maker.

    Anything on that guy in California who works for Wells Fargo (if its the same guy)?

    I also dug through the SEC looking for Vietnam Capital and found nothing. Will keep digging.

    It seems a lot of these firms are not registered with the SEC which could explain the statutory forgery.

    Keep digging on St James too. They have scrubbed their website of Kannam, so they must be trying to hide something.

  24. The Whole Truth, Nothing But the Truth

    Holy Cross Boarder, I have not been able to come up with any info yet on Cross Boarder Capital.

    Maybe it is just what it seems to be – a lousy, defunct entity with zero revenues. Just a piece of junk, hollow, special purpose vehicle for illegal funding.

    Seems like we should be calling Ralph Gill, Ralph Skilling? or is it Skillet?

  25. Anthony Retardo

    Did Blumenthal get Kannam yet? I’m looking forward to seeing Kannam being led out of his home in handcuffs.

  26. Anonymous

    Dear Chloe O’Brian,

    I’m sorry about our last check. Seems we are fresh out of cash. But give me a few days. I have a trip coming up to L.A. and I can double book expenses.

    It is so easy to do. The silly president is asleep at the wheel and no one looks at my expense accounts because they assume I must be honest, having gone to a prestigious school and everything.

    Total losers here, Chloe. I can run circles around their auditing systems. See you in Vegas!

    Dinner and drinks on me [and Wesleyan! hahaha!!!]

    Tom

  27. Bond, James Bond

    Here is a conference in Monte Carlo, Monaco that the non-entity Cross Border Capital Advisors, co-founded and owned by Messrs Kannam and Gill, attended October 23-25, 2006. The title was European and Alternative Investment Summit. See page 9.

    Since Mr. Gill said that Cross Border had no assets or revenues, I wonder how Cross Border was able to attend? Who paid their registration fee? Who paid transportation, hotel and meals? Did they charm their way in? Were they comped on everything? We need to know.

    What a wonderful time of the year to be in Monaco! No Oucheroo here. In fact you don’t need to wear two hats. Not too hot, not too cold. And you are right next to Nice. In fact you fly into Nice. And Italy. Ah.. Italy. Italy’s a stones throw away. Everything is beautiful here. No need to cherry pick or poach anything. Everything is key!

    http://www.iiwealthmanagement.com/pdf/PAM082806.pdf

  30. Dr. No

    JAMES BOND, I’m sure that Kannam and Gill went to Monte Carlo to score with some hookers, drink a ton of booze and buy tons of gifts all COURTESY OF WESLEYAN UNIVERSITY. Yes, this concept of double billing expenses is as clever as wearing two hats! Just think of it. Monies that could have gone to buying books, funding scholorships, or paying for operating expenses, all squandered by two low lifes: GILL AND KANNAM on a junket of vile pleasure. And now Kannam want out? I say get our money back first. People who use money for debauchery and hedonistic pleasure, that should have been put to better use do not deserve to life in the U.S. They deserve to live in the SLUMS OF CALCUTTA!

  31. Gold Finger

    I can see these two clowns in Monte Carlo putting on their black tie, saying “Bond, James Bond” and laughing like a bunch of giddy 14 year old girls. I can see their wives plastered with make-up thinking that they are as hot as Grace Kelly.

  32. Going Viral

    This whole story is going viral. Do a Google search. Its in the Moscow Times, Times of India, all the UK papers, and plastered all over Asia. Wow.

  33. High Roller

    I saw the Cross Border twins when the were in Monte Carlo. One of them puked on a roulette wheel and got thrown out of the casino. The other was fumbling with a number of credit cards, trying to figure out which one to use.

  34. Cross Border Twins

    We were there with Dr. Apu Nahasapeemapetilon, Jr. PhD. We were investigating hedge fund performance based on Monte Carlo simulations. We figured, why not go to Monte Carlo and test our theories. It was work related.

  35. Cross Border Wives Club

    Our husbands were hard at work in Monte Carlo. We were fortunate to be able to join them. We had never been to a Principality before. It made us so happy.

    We also had a Wives Club Summit. Our husbands had scheduled a “dough update” which we were required to attend.

  36. High Roller

    Overheard Conversation in Monte Carlo Casino

    Kannam: Should we gamble?

    Gill: Might be the fastest way to make some real dough

    Kannam: Have you seen the Korean dignitary yet?

    Gill: No, I think he is still drafting the letter

    Kannam: We need to go back to the hotel and give the wives a dough update

    Gill: If possible, I’d like to cherry-pick the update. No need to tell them everything.

    Kannam: I’m so happy! I’m Bond, James Bond. Whooooo whoooooo whooooooo

  37. Toilet Humor

    Hey, I hope you are all enjoying my toilet humor – you can tell by my ‘shitty’ writing style that 90% of these posts are authored by yours truly – may as well enjoy them Wesleyans reputation is heading straight down the toilet thanks to my stewardship. -mikey

  40. Justice League

    What happened to Blumenthal? Isn’t he an elected official? Oh well, if he wants my vote, he better get his unicycle out and start pedeling. I want those crooks Kannam and his gay lover Gill put in prison with some gorillas.

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