Donor faces scrutiny

Last April, the University named the new baseball field and the head coach’s position after the family of the donor who gave more than $1 million: John Mazzuto ’70, former CEO of International Enterprises of America.

But, unbeknownst to University officials at the time, Mazzuto and other high-ranking members of the firm — which manufactures charcoal fluids, antifreeze and motor oil — were sued in 2007 for insider trading and fraudulent book-keeping.

As the case progresses, Yale is investigating whether or not it should have known about the allegations against Mazzuto — a former shortstop for the Yale baseball team and a member of the Delta Kappa Epsilon fraternity — before accepting his donation, University President Richard Levin said. Once that investigation is complete, he said, “Yale will do whatever is the right thing.”

“We’re trying to understand the circumstances under which we received the money, and whether we had any reason to be concerned,” Levin said.

Mazzuto and other executives of IEAM are being charged for misrepresenting the company’s financial situation to the public. Plaintiffs allege that the company, which had an apparent market value of $93 million in spring 2007, knowingly overstated its stock prices, and when disclosures of dishonest bookkeeping broke in November 2007, the stock’s value plummeted.

According to the lawsuit, Mazzuto illegally pocketed over $1 million as a result of insider trading on IEAM stock. The plaintiffs allege that some of the money was routed through a bank account in the name of Mazzuto’s girlfriend at the time, in order to buy a Porsche.

Mazzuto has also come under fire for omitting his 2002 personal bankruptcy from Securities and Exchange Commission filings.

IEAM has moved to dismiss the suit, calling the allegations “nonsensical” and claiming any bookkeeping errors were unintentional, according to a Dec. 2 article in Forbes Magazine. But the company’s finances during Mazzuto’s tenure as CEO are still under investigation by the SEC and the New York District Attorney’s office.

Levin said the University does not investigate donors before accepting gifts but that in his 16-year presidency he has never encountered allegations of this nature against a donor.

Yale has given back gifts in the past. Lee Bass ’79 donated $20 million to the University in 1991 for programs in Western Civilization but became unhappy with the implementation of the program. The University, for its part, believed Bass wanted too much power over hiring within the program, and the disagreement caused the Yale Corporation to vote to return the money in 1995.

Yale Director of Athletics Tom Beckett said he did not know about the allegations brought against Mazzuto and that the athletics department does not handle such matters, deferring comment to the General Counsel’s office. University General Counsel Dorothy Robinson did not respond to an e-mail Thursday.

Timothy Ford, the athletics department senior associate director of development and community, declined to comment, and Vice President for Development Inge Reichenbach could not be reached Thursday. Mazzutto and his lawyer did not respond to multiple phone and e-mail requests for comment.

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