Author Mortenson buys books with charity cash

Missoula, Montana Author of Three Cups of Tea Greg Mortenson has agreed to pay $1 million (Dh3.67 million) to compensate his Montana-based charity for using the organisation to promote and buy copies of his books, a report from the state attorney-general said on Thursday.

The settlement between Mortenson, leaders of the Central Asia Institute charity he founded and Montana officials allows the organisation to continue providing education to impoverished communities in Pakistan and Afghanistan.

But it marks a setback for an author and philanthropist once widely celebrated for his work. The office of Montana Attorney-General Steve Bullock said its investigation, launched in April 2011 in the wake of a 60 Minutes report, found the Central Asia Institute had spent nearly $4 million since 2006 to buy copies of his books Three Cups of Tea and Stones Into Schools.

The purchases generated royalties for Mortenson, and although he had agreed to provide a contribution to the Central Asia Institute equal to the amount of royalty payments he received from book purchases, he had not done so as of April 2011, the attorney-general report found.

He also collected money from CAI for travel expenses related to his lucrative speaking engagements, and the charity spent about $4.9 million to promote the two books, the report said.

CAI's mission is to advance literacy and education in Central Asia, especially for girls, and it has funded the construction and operation of schools in the region.

"The humanitarian efforts of Greg Mortenson and CAI are impressive, and even the greatest detractors would admit that together they've accomplished a tremendous amount to further education in Pakistan and Afghanistan," Bullock said.

But Bullock, who has authority under Montana state law to oversee and regulate charities, said lapses in CAI oversight cannot be ignored. The investigation could have resulted in state officials dissolving the charity if a settlement had not been reached.

"When charities take money given for specific purposes, it's essential it's spent as intended, otherwise public trust is eroded and tough to restore," Bullock said.