July 29, 1999 'No king was appointed over there' By MATT CHITTUM THE ROANOKE TIMES If he wanted an electronic invisible fence to contain his dogs, Daisy, Tori and Jill, he would have to pay for it himself, the new Virginia Military Institute superintendent was told. But in August 1995, on his third day of work at his $200,000-a-year job, Josiah Bunting began to grumble about having to spend his own money. He decided it was reasonable for VMI to pay for the dog fence at his temporary residence, Bunting wrote in a letter to the VMI business manager. "It seems unfair to bill me for this work in a house to which I have been assigned temporarily." He didn't mean to complain about it, he said, but he didn't think he should be penalized financially. In the end, he wasn't. It's unclear if Bunting ever knew, but a member of the VMI Board of Visitors paid for the fence out of his own pocket. Bunting paid for the fence to be reinstalled at his permanent quarters. Still, some in the VMI family say the situation illustrates how, from the very beginning, Bunting expected - and got - a pampered lifestyle from the board that hired him, one that has gone unchecked for four years and is now the subject of a probe by state auditors. Correspondence and other documents on file in the VMI business office show Bunting frequently complained about the handling of his pay, the renovation of his office and other financial matters. Bunting's spending practices are being investigated by the state auditor of public accounts. All told, the record "reflects a very self-serving attitude that he is owed something," said VMI alumnus David Parker of Lexington. "No king was appointed over there." Bunting's life as superintendent of VMI is far from the Spartan life he led as a cadet, and which cadets still live, with mess hall meals, no personal phones, no air conditioning and no time for leisure. Bunting, who is about to take the helm of a massive VMI fund-raising campaign, does his spending from a $100,000 discretionary account made up mostly of alumni donations. He has used that account to fund a $35,000 renovation of his office, a review of business records by The Roanoke Times revealed. He has bought thousands of dollars in books for his own reading and gift giving. He held a $6,800 book release party for a VMI picture book at one of New York City's most exclusive clubs. He chartered a plane for more than $5,000 to take him, his family and a faculty and a staff members and their wives to a VMI football game. Bunting's spending practices have some staunch supporters. "I firmly believe that these funds have been used for the purposes intended by the VMI Board of Visitors," board President Bruce Gottwald said. He credited Bunting's leadership in part with bolstering alumni donations to record levels. "The notion that he [Bunting] is somehow using VMI's money to live a particularly lavish lifestyle is unfounded," said Gil Minor, president of the foundation. "All we ask is that these funds be used for the advancement of the institute. The foundation is satisfied that this is the case." Others are not convinced. Bunting's expenditures "are certainly not consonant with VMI's image as a Spartan institution, nor are they in accord with what I believe were the spending practices of past superintendents," said departing VMI board member Thomas Hudson of Richmond. At best, they show "a frightening lack of judgment." A standard of living Bunting came to VMI from a job as headmaster at the Lawrenceville School in New Jersey, a school a lot like the exclusive prep schools he attended before enrolling at VMI in 1959. His wife, Diana, is heiress to a Peruvian mining fortune. Bunting's predecessor at VMI, John Knapp, made $128,000 a year and had a $250-a-month car allowance. Bunting now makes $258,000 a year, but his initial contract was for $192,000 -- $94,814 from the state, and $97,186 from the private foundation. It also included all his uniforms right down to his socks, memberships at three private clubs, including the super-elite Brook Club in New York City, and a $400-a-month car allowance. Though VMI is among the smallest of Virginia's state schools, Bunting's is among the top five presidential pay packages. Just days after Bunting started the job, however, the private VMI foundation tried to rework Bunting's pay to make it appear he was getting only $150,000, according to a memo from business manager John Rowe to then-board chairman William Berry that is on file in the VMI business office. Rowe outlined the plan in the memo as it was described to him by then-head of the foundation, Skip Roberts. The plan was for the foundation to give Bunting a $600,000 interest-free loan. If deposited in an account yielding 7 percent interest, the sum would have allowed Bunting to draw about $42,000 a year in income. Roberts didn't think that income would have to be disclosed. Rowe said the plan was a bad idea for several reasons. It seemed clear that a public college was attempting to circumvent the Freedom of Information Act by hiding the salary. And if it got out, VMI would have to defend not only the large salary but also the attempt to cover it up. Plus, "it smells bad," Rowe wrote. "It is not the honorable thing to do." The deal apparently never went through. It's unknown if Bunting knew about it, as he declined to answer questions for this story. No matter how the salary came to him, Bunting soon became concerned about how much he was really being paid. After two months of work, Bunting sent a letter to Rowe, the business manager, with questions about why his paychecks were not as large as he thought they should be, compared to his checks at his last job. "I must tell you that all this is saddening and puzzling to Diana and me. It has cast a real cloud over our first months here; and no one really seems willing to help out." It turned out, Rowe explained in a memo, that the sources of Bunting's consternation were differences in retirement contributions and the number of dependents he claimed for tax purposes. Travel expenses In that same letter, Bunting said he had decided to have the handling of his travel expenses shifted from the VMI business office to the private foundation. The foundation holds an endowment of more than $264 million, built from investments of alumni donations. "I have neither the time, nor frankly the secretarial time, for all of the forms, etc., that seem to be required," Bunting wrote to Rowe, the business manager. Those forms were required to ensure that travel spending was done within state guidelines. Spending by the nonprofit, tax-exempt foundation, however, would not have to conform to the state rules. Bunting made no secret of his plans to travel extensively. He has championed a global perspective on education through the development of relationships with colleges around the world. He has established exchange programs with colleges in Mongolia, Jordan, Hungary and Morocco. Typically, at least 120 cadets are abroad at any one time, according to VMI spokesman Mike Strickler. Bunting also travels to visit alumni to raise money for the college. In his first year, Bunting's travel costs totaled more than $60,000 and would become a point of concern for the auditor who reviewed the foundation's books. Office renovations By February 1996, the renovation of the four rooms in Bunting's office was under way, and it would eventually cost more than $35,000. A now-departed building and grounds manager, in a letter, compared the plan for the office to "a set from 'Ben Hur' (the 1926 version)." A Lexington interior design firm, Hamilton Robbins, received $3,000 in consulting fees and installed window shades and blinds that cost over $3,800. The bill for carpeting the 443 square yards in the four-room office area was more than $14,000. The carpet itself was not especially pricey, but the labor of "carving" together different colors of carpet to make a pattern created by the designer drove up the total price to about $34 a square yard. The VMI library was carpeted by the same firm about the same time for $15 per square yard. On Feb. 16, Bunting wrote to Rowe, the business manager, that nearly all of the furniture in the office would have to go, on orders from his wife. But the proposed $12,000 for replacing it was too much. Diana Bunting said $1,000 would be enough. Six days later, though, Bunting had his executive assistant, Ed Dooley, call Rowe about the money. Rowe wasn't in, but the business office answering machine picked up the call and recorded a conversation between Dooley and Bunting. Bunting was confused about how much was available for the furniture, according to a transcript of the conversation now on file in the VMI business office. "We are really getting some shabby treatment from VMI, Diana and I," Bunting is heard telling Dooley. "Just seems like everything is not properly funded and not properly laid on." "Uh, this is a school with an endowment of $180 or $190 million bucks," Bunting continued later in the conversation. "You have a new president who is vigorous and who has really done a lot to turn the ship around. And they can't get him stuff in the office." In the end, Bunting wound up with furniture that includes a $1,400 desk chair, a $1,333 table and the desk he used at his last job, for which VMI had offered $900. "Can you believe it, old Lawrenceville refused our check, so I got my new desk - VMI got my new desk - free," Bunting wrote to Rowe. "Anyway, saved some dough." Gifts and entertainment Bunting has been generous with VMI resources, to be sure. He spends more than $4,000 on flowers each year, about half of which are sent as gifts or to funerals. An $88 bouquet was sent to the Jordanian embassy in memory of King Hussein. Bunting has been working to establish a relationship with a school in Jordan. Board members' wives get flowers and books, purchase logs show. Bunting used his discretionary account to pay off the class rings for at least two cadets. Bunting said from the start of his tenure that he wanted to open the superintendent's quarters to the VMI family, and he has. The house was renovated at a cost of $401,000 to the institute to make it a nice place to entertain. Diana Bunting ordered over $400 in wine goblets from Bloomingdale's in New York. In the last fiscal year alone, the Buntings spent nearly $6,500 from his discretionary account on groceries and alcohol for entertaining. Guests have ranged from cadets to the dean of Canterbury Cathedral in England. In December 1997, VMI was host of a $6,800 book-signing party for 75 alumni and friends at The Brook Club in New York for release of "The Institute," a coffee-table book on the college. Bunting has continued to travel, spending $60,000 again in 1998. He took a trip to the Philippines to see a single alumnus, but that graduate endowed a faculty chair at VMI, which takes a donation of at least $1 million. But in 1997, the handling of Bunting's travel expenses by the foundation came into question by a company auditing the foundation. The foundation had only minimal guidelines for Bunting's travel expenses, the auditor pointed out in a management letter to the foundation. "Without a formal understanding or policy, some VMI donors (or possibly the press) could take issue with this type of reimbursement." In response, then-VMI board chairman Berry sent Bunting a letter detailing when he could travel first class and when he needed Berry's approval before he traveled. "Your travel so far has resulted in tangible monetary benefits to VMI - far, far in excess of the cost," Berry added. Board puts its foot down "This spending thing is a surprise to me," said VMI board member Charles Lindsey. "It's really taken me off guard." Lindsey and two other board members admitted they've been in the dark about Bunting's spending. Bunting routinely overspends his discretionary account - in one year by more than $60,000. Lindsey attributes board ignorance to a focus on larger budget concerns. Whatever the members knew about Bunting's personal spending, the board had taken notice of other issues in the budget. At its last meeting in May, the board unanimously passed a resolution requiring prior board approval before any money not included in the annual budget can be spent. Audit and finance committee chairman Bob Copty of Roanoke made the motion, citing a "precipitous drop" in the school's fund balances. The auxiliary fund balance has dropped from $1.8 million in 1995 to a $570,000 deficit. It currently stands at about $870,000. Education and general reserves amount to about $1 million. The auxiliary fund has dropped in part because of large expenditures, including repairs to the barracks roof, ROTC scholarships and National Guard scholarships. But other blows to the balance have been the result of Bunting's firing two football coaches with contracts that had to be paid off. Bill Stewart received more than $95,000 after being fired for allegedly making a racist remark to a player. Ted Cain received $291,000 when he was fired after one dismal season as coach. VMI, however, didn't have the money to pay Cain in one check. He ultimately agreed to take the money in installments, according to Rowe, the business manager. Athletic Director Davis Babb also was fired last year and received a $192,000 payoff. At the May board meeting, Bunting presented each member with a $20 book on Robert E. Lee bought with college money. It featured a blurb from Bunting on the book jacket. Then Bunting proposed that for the next 18 months he be freed to take the helm of the $150 million to $200 million fund-raising campaign VMI is preparing to launch. He wanted to leave the day-to-day operations to Dean Alan Farrell. In a comment he attributed to an old colleague, Bunting told the board it was time to "go out and get the money." BUNTING'S CONTRACT Josiah Bunting III's employment contract has been amended several times since he took over as superintendent of Virginia Military Institute August 16, 1995. Here are the terms as it currently stands: Annual salary: $258,367, including fund from VMI, the private VMI Foundation and a bonus. Car allowance: $700 per month. Paid vacation: 30 days per year Housing: Bunting and his family live in the superintendent's quarters on the VMI campus. The $1,555 monthly rent, all utilities and maintenance are paid by VMI. Private club memberships: Annual dues totalling $4,363.16 are paid for Bunting's memberships to the Lexington Golf and Country Club; the Commonwealth Club in Richmond; and The Brook Club in New York City. Uniforms: VMI supplies Bunting with a mix of tailored and off the rack military uniforms, including hats, ties, socks, shoes, patches, pins, ribbons and a scarf. Retirement: VMI pays 100 percent of Bunting's contribution to one of six plans Bunting may choose from. Insurance: Includes health, group life and disability.