by Jon Krakauer
windfall CAI has received from his promotional efforts. He has been more reticent about acknowledging the millions of dollars that have flowed into his personal bank account along the way. It may surprise many people who have donated money to CAI, as it surprised me, to learn that CAI receives none of the proceeds from any of Mortenson’s books. All of the royalties from Three Cups of Tea are split equally by Mortenson and David Relin. All of the royalties from his other books are paid to Mortenson alone.
Although Mortenson concedes that CAI receives none
of the proceeds from his books, in a press release issued on April 16, 2011, the CAI board of directors asserted, “Greg has donated hundreds of thousands of dollars to the organization, which includes a percentage of his royalties from his books, and worked for the organization without compensation for a number of years.” But such claims appear to contradict financial statements posted on CAI’s website. Nothing in the j o n k r a k a u e r
36
foundation’s financial records indicates Mortenson has ever donated anything close to hundreds of thousands of dollars to CAI, and the financial records of both CAI and the American Himalayan Foundation show, without question, that
Mortenson has received a salary for his humanitarian work every year since 1995.
CAI supporters may be even more dismayed to learn, as
I was, that although CAI receives no royalties from Mortenson’s books, CAI has paid virtually all of the expenses incurred by Mortenson, Relin, and at least some of his uncred-ited ghostwriters while they were researching, writing, and promoting the books. These expenses have included cameras, computers, writers’ advances, and travel. When Mortenson has traveled domestically to promote his books in recent years, he has usually flown on chartered jets, and CAI has paid millions of dollars for these charters. CAI has also paid millions of dollars to run numerous ads to promote Mortenson’s books in upscale publications such as The New Yorker, The Atlantic, Harper's, and The New York Times.
Since the publication of Three Cups five years ago, Mortenson has made several hundred appearances to talk
about CAI and his books. Presently, demand for Mortenson as a speaker is stronger than it’s ever been, and he is booked solid through the end of 2011. As Mortenson writes in Stones into Schools,
each time I travel somewhere new, I am still shocked by the sheer number of people who flock to hear this tale. Last summer in Boston…the organizers of a talk I was giving at Northeastern University…booked me into a hockey stadium and
filled the place with 5,600 people. A week later at a basketball arena in Murfreesboro, Tennessee, 9,500 folks showed up and my speech had to be broadcast on a JumboTron.
Using CAI funds, Mortenson has purchased many tens
of thousands of copies of Three Cups of Tea and Stones into Schools, which he has subsequently handed out to attendees at his speaking engagements. A significant number of these t h r e e c u p s o f d e c e i t 37
books were charged to CAI’s Pennies for Peace program, contrary to Mortenson’s frequent assertions that CAI uses
“every penny” of every donation made to Pennies for Peace to support schools in Pakistan and Afghanistan. Rather than buy Mortenson's books at wholesale cost from his publisher, moreover, CAI has paid retail price from commercial outlets such as Borders, Barnes & Noble, and Amazon. Buying from retailers allows Mortenson to receive his author’s royalty for each book given away, and also allows these handouts to augment his ranking on national bestseller lists. (Had he ordered the books from his publisher, Mortenson would not have received a royalty, nor would bestseller lists reflect those purchases.) According to one of Mortenson’s friends, when he learned that Elizabeth Gilbert’s Eat, Pray, Love had bumped Three Cups of Tea from number one down to number two on the New York Times paperback nonfiction list, “Greg was furi-ous. He started buying books like crazy, with the CAI credit card, to try and put Three Cups back on top.”
Book sales aside, Mortenson’s speaking engagements—
which are arranged by the Penguin Speakers Bureau, a
division of the corporation that publishes his books, Penguin Group USA—are extremely lucrative for him. When Mortenson travels to speak, he typically does two or three events per city. He appears at many of them pro bono, but for some sixty events each year he charges upwards of $30,000 per event, plus $3,000 in travel expenses. According to former CAI staffers, the Institute has received none of the millions of dollars Mortenson has received for such events. In fact, CAI has never received the $3,000 per booking Mortenson gets reimbursed for travel expenses, despite the fact that CAI, not Mortenson, has paid for all of his travel costs (including chartered jets and deluxe hotel suites), as well as expenses incurred by family members and personal assistants who often travel with him. “Greg is of the attitude that CAI exists because of him,” says an ex-staffer who held a senior position in the organization’s Montana office. “Any money he raises for CAI, according to Greg’s logic, is therefore his money, and he can spend it however he wants.”
j o n k r a k a u e r
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According to the CAI website, “Central Asia Institute is a non-profit 501(c)3 organization dedicated to use every dollar contributed as efficiently as possible. It is our goal to spend no more than 15% of your donation on overhead (administrative and fundraising costs), and to spend 85% of your contribution on our programs.” What this statement fails to disclose is that for accounting purposes, CAI reports the millions of dollars it spends on book advertising and chartered jets as “program expenses,” rather than as fundraising or other overhead. Were they reported honestly, CAI’s fundraising and administrative expenses would actually exceed 50
percent of its annual budget. In 2009, according to an audited financial report, CAI spent just under $4 million building and operating schools in Pakistan and Afghanistan, a sum that includes construction costs, school supplies, teachers’
salaries, student scholarships, and travel expenses for program managers. In the same year, CAI spent more than $4.6
million on “Domestic outreach and education, lectures and guest appearances across the United States”—an amount that included $1.7 million to promote Mortenson’s books. CAI reported all of this $4.6 million on its tax return as expenses for “programs.”
In a confidential memo dated January 3, 2011, an at-
torney who examined CAI’s most recent federal tax return advised Mortenson and the board of directors that CAI’s outlays for book advertising and travel expenses for Mortenson’s speaking engagements appeared to be in violation of Section 4859 of the Internal Revenue Service Code, which prohibits board members and executive officers of a public charity from receiving an excessive economic benefit from the charity. (Since 1998, Mortenson has served as both CAI’s executive director and as a board member; presently, the board of directors consists solely of Mortenson and two other members.) The memo, written by a lawyer at the firm Copi-levitz & Canter, warned:
Assume that in auditing the Central Asia Institute, the IRS
finds that in fiscal year 2009, Mr. Mortenson received an t h r e e c u p s o f d e c e i t 39
excess benefit from his charity in the amount of $2,421,152.71
(assuming that CAI’s advertising expenses related to Mr.
Mortenson’s books were $1,022,319.71 and travel expenses related to Mr. Mortenson’s speaking engagements were
$1,398,831 as reported on the organization’s 990 for…2009; and further, the charity received none of the revenue that Mr.
Mortenson received from said book sales or speaking events)….
Further, assuming Mr. Mortenson received the same or similar excess benefit for the previous two years, and the IRS looked back to these years in its audit (as is often the case), Mr.
Mortenson could owe CAI up to $7,263,458.13 for excessive benefits received during fiscal years 2007, 2008, and 2009….
[I]f Mr. Mortenson fails to timely pay the correctio
n amount, he could face a total liability ranging from $7,868,746.31…to $23,606,238.62.
An example of the “excessive benefits” provided to
Mortenson were several full-page color advertisements in The New Yorker to promote Mortenson’s books; CAI paid for all of these ads, each of which, according to the magazine’s published ad rates, cost more than $100,000. Another example: CAI has routinely paid for extravagances such as a four-day excursion by Mortenson to the Telluride Mountain Film Festival in May 2010, where he was a featured speaker.
A Learjet was chartered to fly Mortenson, his wife and children, and four other individuals from Montana to Colorado and back. CAI rented multiple residences in Telluride to house the entourage. Lavish meals were billed to the foundation. The jet charter alone cost CAI more than $15,000.
“For a charity that exists to help the poor in the develop-ing world,” says Daniel Borochoff, president of the charity watchdog the American Institute of Philanthropy, “this is pretty outrageous behavior. Mortenson is acting as if CAI was his own private business. It’s not. He’s using the public’s money. CAI is a tax-exempt organization subsidized by our tax dollars. It sounds like he’s violating every financial practice that nonprofits are supposed to follow. It’s very important that any nonprofit separate personal and private business j o n k r a k a u e r
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interests from its charitable interests. CAI should not be paying for all these expenses that serve to benefit Mortenson personally. The fact that the charity might also benefit doesn’t make it OK.”
Mortenson’s Pennies for Peace program (P4P) is a com-
mendable cultural studies course that also happens to function as a phenomenally effective marketing-and-fundraising scheme for CAI. By pitching P4P directly to kids, their teachers, and school administrators, Mortenson has induced nearly three thousand schools in the United States and
Canada to make P4P part of their standard K–12 curriculum.
Hundreds of thousands of children have contributed their lunch money in response to P4P fundraising appeals. “The Pennies for Peace money, every single penny, we put it very quickly to use over in Pakistan and Afghanistan,” Mortenson has assured these students and their parents. “All of the money is used for supplies, for books…. Everything is used to help the kids out.”6 In 2009, schoolchildren donated $1.7
million to Pennies for Peace. But CAI’s total 2009 outlay for the things P4P is supposed to pay for—teachers’ salaries, student scholarships, school supplies, basic operating expenses—amounted to a paltry $612,000. By comparison, in 2009
CAI spent more than $1 million to promote sales of Three Cups of Tea and Stones into Schools, and another $1.4 million to fly Mortenson around in chartered jets. Donors unknowingly picked up the tab for all of it.
t h r e e c u p s o f d e c e i t 41
Part III
ghost
sChools
“But education is a sacred thing,
and the pledge to build a school is a commitment
that cannot be surrendered or broken….
— g r e g M o r t e n s o n ,
”
S t o n e S i n t o S c h o o l S
“taking great personal risks to seed the region that gave birth to the Taliban with schools, Mortenson goes to war with the root causes of terror every time he offers a student a chance to receive a balanced education, rather than attend an extremist madrassa.” This trope, from the introduction to Three Cups of Tea, is brandished by Mortenson as a central theme in all of his books and in most of his public utterances.
The message he seeks to convey is that CAI schools are
typically built in areas where fundamentalist madrassas are ubiquitous, and that his schools prevent the nearby madrassas from transforming kids into suicide bombers.
This simply is not true, and Mortenson knows it isn’t
true. Only a small fraction of his schools are found in locales that might be characterized as breeding grounds for terrorists. In Afghanistan, the majority of schools CAI has established are in areas where the Taliban has little influence or is simply nonexistent, such as the Panjshir Valley and the Wakhan Corridor. In Pakistan, most of the CAI schools are situated in a region the size of West Virginia that used to be known as the Northern Areas but in 2009 was officially designated Gilgit-Baltistan. North of Gilgit-Baltistan lies Afghanistan’s Wakhan Corridor; to the northeast, across the towering peaks of the Karakoram, is China; to the southeast is the fiercely disputed border with India—the so-called Line of Control.
Despite its proximity to contested areas of Kashmir
administered by India, Gilgit-Baltistan is a tranquil land that has thus far escaped most of the violence afflicting so many other parts of the region. Ethnically diverse, the inhabit-ants of Gilgit-Baltistan are followers of Shia, Sunni, Ismaili, and Nurbakhshi interpretations of Islam, and “have histori-cally lived in relative harmony,” according to Nosheen Ali, a sociologist with a doctorate from Cornell who has conducted extensive research in Gilgit-Baltistan. In an article titled
“Books vs. Bombs? Humanitarian Development and the
Narrative of Terror in Northern Pakistan,” published in the academic journal Third World Quarterly, Dr. Ali writes, “The most troubling irony is that the focal region of Mortenson’s j o n k r a k a u e r
44
work—the Shia region of Baltistan with its Tibetan-Buddhist heritage—has nothing to do with the war on terror, yet is primarily viewed through this lens in [ Three Cups of Tea].”
“Baltistan is the most peaceful part of Pakistan,”
Ghulam Parvi confirms. Mortenson hired Parvi in 1996 to be CAI’s Pakistan program manager—the organization’s first overseas employee. According to Three Cups, Parvi is “known and respected throughout Skardu as a devout Shiite scholar….
‘Without Ghulam Parvi, I never would have accomplished
anything in Pakistan,’ Mortenson says.”
Last summer, Mortenson, the CAI staff, and the CAI
board of directors received a surprising email from Parvi announcing that “he is retired from CAI USA from 30th of June, 2010, due to Greg’s unhealthy attitude.” Parvi’s split with CAI can be attributed to several factors, but at the top of the list is the pervasive dishonesty of Three Cups. “In his book,” Parvi explained in a letter to me,
Greg describes false stories to make the book interesting and sensitive, so that he would become very famous and fund raising make easy. Greg did so and he is really successful in his interior motives. But on the other hand, innocent people working with him in Pakistan, especially in Baltistan, had to face disgrace, loathsome from the society, religiously bashful-ness and financial losses. Times and again Greg Mortenson was requested not to perform such acts, which bring bad name and defame to us, but he always very politely and smilingly neglected our requests.
Parvi was extremely disturbed that Mortenson de-
voted five pages of Three Cups (pages 241-245) to an alarmist disquisition on Wahhabism after he purportedly drove past a Wahhabi madrassa in the Balti village of Gulapor shortly before 9/11:
. .Pakistan’s most virulent incubator of religious extremism—
Wahhabi madrassas….
In December 2000, the Saudi publication Ain-Al-Yaqueen t h r e e c u p s o f d e c e i t 45
reported that one of the four major Wahhabi proselytizing organizations, the Al Haramain Foundation, had built “1,100
mosques, schools, and Islamic centers,” in Pakistan and other Muslim countries, and employed three thousand paid prosely-tizers in the previous year….
“In 2001, CAI operations were scattered all the way across northern Pakistan…,” Mortenson says. “But our resources were peanuts compared to the Wahhabi. Every time I visited to check one of our projects, it seemed ten Wahhabi madrassas had popped up nearby overnight.”
From someone who presents himself as a steadfast op-
ponent of anti-Muslim bigotry, suc
h fear-mongering is hard to square. According to Nosheen Ali, madrassas are hardly a new phenomenon in Gilgit-Baltistan, nor are they cause for alarm. Such schools have been providing religious education to a variety of Muslim sects for a very long time. But this region, she emphasizes, “is not a terrain teeming with fundamentalist madrassas and Taliban on the loose—the definitive image of the region in [ Three Cups of Tea].” The subtext of Mortenson’s book, she rebukes, is “rooted in a narrative of fear and danger” that’s deliberately misleading.
On June 13, 2010, Parvi convened a meeting in Skardu
to discuss Three Cups of Tea. Some thirty community leaders from throughout Baltistan participated, and most of them were outraged by the excerpts Parvi translated for them.
Sheikh Muhammad Raza—chairman of the education com-
mittee at a refugee camp in Gultori village, where CAI has built a primary school for girls—angrily proposed charging Mortenson with the crime of fomenting sectarian unrest, and urged the District Administration to ban Mortenson and his books from Baltistan.
Three months after Parvi held this forum, Morten-
son received another email warning that he was no longer welcome in Baltistan. It arrived out of the blue from Tanya Rosen, an international lawyer and wildlife researcher with degrees from Bard College, the Università Statale of Milano, Harvard Law School, and the Yale School of Forestry and j o n k r a k a u e r
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Environmental Studies. “Dear Greg,” it began, I wrote you a couple of years ago back when I was planning on going to do some work in the Wakhan. I am primarily
a scientist working on wildlife and conservation issues but obviously in places like the Wakhan such issues go hands in hands with development, livelihoods and education. Anyway the plan to go to the Wakhan has been postponed for a bit because instead friends and colleagues in Gilgit-Baltistan asked me to come help with snow leopard conservation work….