MORGANTOWN, W.Va. — West Virginia Radio Corp. alleges that its competitor, West Virginia Media Holdings, netted $5 million in 2007 from a WVU Foundation loan that violated state and federal non-profit laws and has continued to benefit from cronyism by university officials.

WVRC’s wide-ranging lawsuit, filed Wednesday in Monongalia County Circuit Court, names 10 defendants in all, including WVU president Jim Clements, athletics director Oliver Luck, WVU Board of Governors chairman Drew Payne and WV Media president Bray Cary.

The suit claims unlawful dealings tainted the 2008 purchase of a scoreboard for Milan Puskar Stadium and, more recently, that Luck and Payne conspired to rig the bidding for the university’s third-tier media rights package.

“These blatant and unlawful actions are not the result of inadvertence or errors made in good faith, but instead are the purposeful result of a fraudulent scheme to benefit WV Media, a corporation certain defendants own, or to personally enrich themselves or friends,” the suit claims.

WVRC, the parent company of MetroNews, was among the firms unsuccessfully bidding for WVU’s third-tier rights last fall. WVRC did not enter the second round of bidding and has been critical of the university for failing to grant the company a hearing in light of missteps by Luck.

But Wednesday’s lawsuit touches on other matters involving WV Media that predate Luck’s arrival as athletics director in June 2010.

FOUNDATION LOAN

In 2001, the WVU Foundation loaned $7.75 million to Cary’s company, which was founded the same year. Cary was a member of the foundation’s board of directors at the juncture, and the lawsuit contends five additional board members were personal investors in WV Media.

In 2007, WV Media bought out the loan for only slightly more than $2.7 million. WVRC alleges the loan was illegal because it violated the foundation’s mission of bettering education.

The $5 million loss “constituted monies raised from individuals, corporations and other supporters of West Virginia University in hopes of bettering WVU,” reads the complaint. “These donations were not made to further the business ventures of Cary.”

MORE: Read the 50-page lawsuit, and another 155 pages of exhibits.

The lawsuit seeks “exemplary damages” from Payne, Clements, Luck and BOG member David Alvarez “for their outrageous and scandalous behavior and to deter other future such breaches of their fiduciary obligations.”

The lawsuit was filed on behalf of WVRC by Clarksburg attorney Frank Simmerman, Jr.

WVRC stipulated in the lawsuit that any damages collected, exceeding attorneys fees, will be donated to WVU Children’s Hospital.

MEDIA RIGHTS

MetroNews file photo

West Virginia AD Oliver Luck was listed among 10 defendants in a lawsuit WVRC filed Wednesday.

WVRC seeks an injunction delaying WVU from awarding its third-tier rights, the rebidding of which faced a Wednesday deadline for new proposals. The lawsuit restates WVRC’s request for the exclusion of IMG College and WV Media, which partnered on the original winning bid.

That bid was thrown out at the request of state Attorney General Patrick Morrisey after Luck was discovered to have shared confidential information with Payne, a stakeholder in WV Media. Morrisey’s report also questioned Luck’s autonomous decision last October to add three members to the evaluation team when the other original panelists — deputy athletics director Mike Parsons and associate AD for business operations Mike Szul — didn’t give immediate approval to the IMG College/West Virginia Media bid.

“I concur with the Attorney General’s findings that these communications were improper but agree they did not impact the evaluation or selection process,” Luck said in an April 17 statement. “The department looks forward to the rebid.”

The suit charges Luck with “improperly, incompetently, and unlawfully managing the media rights RFP process.” WVRC claims the university subsequently tailored the second media rights RFP “to render WV Media’s partner, IMG College, the only qualified bidder, thereby transforming the RFP process into a sham.”

Though Luck was barred from overseeing the second round of rights bidding, the suit cites Clements for failing to exercise reasonable control over Luck and other defendants, “exposing WVU and its Foundation to unnecessary expense, management and ridicule.”

SCOREBOARD ALLEGATIONS

Two other defendants in WVRC’s lawsuit — WV Media investor Ralph Ballard of Charleston and his brother, Panasonic salesman Richard Ballard of Alpharetta, Ga. — were figures in a football stadium scoreboard purchase that skirted WVU procurement policies.

Former WVU athletics director Ed Pastilong in 2008 objected to Richard Ballard encouraging administrators to buy a $5 million football scoreboard from Panasonic even as a university-hired consulting firm, Ellerbe Becket, was assembling bids from 12 other competing electronics companies.

The lawsuit alleges Richard Ballard pitched the notion of Panasonic gifting a basketball scoreboard for the WVU Coliseum in return for the athletics department agreeing to skip the RFP process and purchase the football scoreboard from Panasonic. The purchase, which the lawsuit claims received a behind-the-scenes push from Payne, ultimately was approved by Narvel Weese, WVU’s vice president of finance, and R.Wayne King, president of the WVU Foundation.

“My concern that WVU is not following proper purchasing practices regarding the scoreboards continues,” Pastilong wrote in a May 2008 memo to Weese. “This project has gone from one free board to buying two boards for $5,000,000 and now providing Panasonic the best advertising soon on the boards for free.”

Despite Pastilong’s concerns, the scoreboards were purchased and installed in 2009. WVU’s agreement with Panasonic subsequently included purchases of a scoreboard for the men’s basketball practice facility and the Milan Puskar Center.

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Comments

  • Fred

    If WVU fires Mike Parsons, it would be the biggest mistake they have made so far. It would also go a long way to prove that they are guilty of the accusations. Parsons is as honest as the day is long and when under oath, he will tell the truth and the whole truth. That is what they are afraid of. Mike Parsons has been the one guy that has always looked after the athletic department from the inside, both with his head and his heart. Better keep the one guy who stands for honesty and integrity out of the whole bunch.

  • Luke

    By the way, you misspelled judgment as well. I don't know, nor do i care, what Mike Parsons did or didn't do, but I do know as a result of the filing of this Complaint that Mr. Pastilong had the good sense to question some of the actions of the Good Old Boys on the WVUF and the WVU BOG and for that I am grateful.

    .

  • OKANYDAY

    Also, cutty77 is the ONLY guy on these threads that constantly PATRONIZES the people involved in these issues by using their first names; like long lost friends ! Anyway WVU faithful, cutty77 NEVER corrects himself when caught in a lie.

  • Big John

    Is it possible to rescind JR degree from WVU-When did he receive it and what category?

  • Big John

    You are absolutely correct in your assement-you say nothing and see nothing when you are on the gravy train, if not there you scream bloody murder.

  • cutty77

    @wilson,
    WVRC owns MSN. Just give or find me a NUMBER. Did WVRC or MSN do it for free all these years. No they did this 3 for me,and 1 for WVU,and i maybe light. Its very simple the Person That Screams The Loudest is Hurt The Most. Mike Parsons is a Great Man,just House Mouse for MSN which is owned by WVRC,and WVU pays all the Bills for. Like i said nice Deal,if you can get it. Wilson just get me a Number,and Number.

    • Wilson

      Once again you show your complete ignorance. MSN is wholly owned, operated and trademarked by West Virginia University. WVRC does not and had never owned any part of it.

  • Tom F

    Why the hell would Luck look to make favorable decisions for his partners at WVU...unless they are the ones putting this guy on the spot. Some might question his decision making, but its not the Athletic Director that makes every decision. This guys resume speaks for itself, he knows how to handle running a successful company, successful business, and successful program. His body of work in Houston is very impressive, all his accolades prior to taking the job at WVU clearly show he is in position to handle this type of issue. sounds to me like this is a jilted ex girlfriend looking to get even with her ex boyfriend.

  • Luke

    I would urge everyone to read the Complaint before dismissing it as sour grapes from a sore loser.

    • Luke

      "Looser?" I hope that was a typo and not indicative of your failure to pay attention in grade school. But that is the level of the comments about this subject.. "No he didn't. Yes, he did. Nya, nya nya." And so it goes. I guess I missed the part where WVU was converted from an institution of higher learning into a sports franchise. An inept sports franchise at that, which goes 7-6 and 13-19 in an also ran conference of sports wantabes.

  • OKANYDAY

    cutty77.....like always, you evade answering the question when challenged for the truth. You stated in a thread above that in 2015 WVU would receive close to $ 45 mill from the BIG12 and 3rd. Tier rights; which is not true whatsoever. First, WVU, is not fully vested from the BIG12 until 2016. Secondly, 3rd Tier rights WILL NOT be enough to push the the income to WVU in 2016 anywhere near $ 45 Million. Don't sugarcoat the facts. We need to be very frugal in our spending; that is all I'm saying. I'm proud to have WVU in the BIG12; but we have to watch very closely our income in relation to our expenses for the future.

  • RamblingMan

    OK, wait a minute. Lets have a no holds-barred cage match between Bray Cary and John Raese. The one who walks out is declared the winner and gets the contract. The loser goes home and pays for this mess.

  • JoeB

    Same sort of shenanigans we're seeing at WLU.

  • Slim

    Good riddance. Think about it; who is really hurting WVU in the long run? And yes you will be listening to Tony and crew on the radio...what drama, geesh.

  • Slim

    Speak for yourself. And in the end the precious athletic department will not lose out on any money. Although, why should we really care how much money they are making. They are fighting an arms race they can never win. Say WVU takes in $10 million more a year in revenue; the real football powers will take in multiple times more than that. See Alabama, OSU, Texas, etc. budgets.

  • What needs to be said

    What needs to be said is that no other businessman in the state could challenge WVU the way John Raese can. His business is not dependent on West Virginia, not matter what we all think. His honey hole is limestone and he is shipping that all over. Weather we agree with his politics or not there are way to many questions that need to be answered. From what I have read WVU could have avoided this entire lawsuit if they would have just granted WVRC a meeting which the university's own procurement rules state they must do. Where was the oversight? Some have questioned why Oliver Luck and Clements are being in the lawsuit? It's not just about a scoreboard in 2007. It is not about losing the media rights. It is about checks and balances and following the rules. At some point President Clements should have seen everything that was going on and shut the entire operation down. All of this will play out of court. But before you all attack John Raese just think if you really love the university as so many of us do, don't we want them to follow their own rules. Shouldn't we demand ethical behavior from the leaders and board members? My last point is that Martha Stewart went to jail for less. This is a clear cut case of insider trading. If the SEC (not the football conference) was in charge there would be at least 3 people going jail. Let's just keep it fair. The courts will decide this out.

    • Big John

      Do you mean JR and past members of the Athletic Department are going to jail?

  • Slim

    Sounds like you may be wrong. Sounds to me like a lot of people are afraid that he may be right. Are you afraid that this will hurt your precious mediocre football program.