Eastern Gateway Officials Raised Concerns about Former Leader
YOUNGSTOWN, Ohio – Eighteen months before Eastern Gateway Community College trustees paused enrollment, members of the administration warned about the college’s capacity to continue under the leadership of then President/CEO Michael J. Geoghegan.
Geoghegan also served as chief financial officer at the college while president.
The administrators titled an Aug. 2, 2022, letter to college trustees “Notification of No Confidence” in Geoghegan and urged his dismissal.
The letter came from members of Geoghegan’s own cabinet, including John Crooks, then senior vice president of academic affairs (now interim president); Karla Martin, senior vice president and chief diversity officer; Arthur Daly, senior vice president and chief development officer; Christopher Bird, vice president of institutional research and reporting; Stephanie Severin, compliance officer; Joshua Martin, senior vice president of human resources and organizational effectiveness; Christina Wanat, senior vice president and chief student affairs officer; and Vanessa Birney, vice president, institutional effectiveness.
Bird, Martin and Severin are no longer at Eastern Gateway.
The letter from administrators cited concerns including Geoghegan’s competence in academic accreditation and financial aid requirements and pointed to what they called his failure to plan to serve students in response to growth; his disparagement and disregard for the opinions, experience and knowledge of his leadership team; the potential for legal liability; his consistent suppression and hiding of information; and his lack of temperament, objectivity and empathy to successfully negotiate.
According to the letter, the state auditor, attorney general, Ohio Department of Higher Education, Higher Learning Commission and U.S. Department of Education were copied on it.
Geoghegan replied via email to The Business Journal: “Now it is not the appropriate time for me to discuss any matters relating to Eastern Gateway. Let’s see what the future holds for the College.”
James Gasior, chairman of the college trustees, didn’t respond to several telephone messages from The Business Journal.
Administrators’ Concerns
The administrators in their letter requested Geoghegan’s dismissal and a meeting with trustees to discuss a path forward for Eastern Gateway.
“If dramatic changes are not made, EGCC is at risk of imminently losing its accreditation, ability to accept federal financial aid, and its capacity to exist remains an ongoing concern,” the cabinet members’ letter reads. “We want to be a part of the solution and work with the faculty and staff to restore trust, ensure stability, and move the college forward.”
Their concerns went unheeded. Minutes of trustees meetings the month after the letter was sent don’t indicate any resulting action.
Geoghegan continued to serve as president and chief financial officer until August 2023, earning $240,000 annually.
At that time, Geoghegan and trustees signed an amended agreement whereby Geoghegan would no longer serve as president or CFO but become a college transition team member from Aug. 4 to Dec. 31, 2023. He was to be paid $20,000 per month, “contingent on the college having sufficient funds.”
Last week, Eastern Gateway trustees voted to “pause” enrollment and registration after this semester because of ongoing financial difficulties. Students were urged to enroll at Youngstown State University or one of the community colleges in the region to continue their studies. YSU is working with the Ohio Department of Higher Education to allow the university to offer in-person classes in Jefferson County.
Choffin Career & Technical Center sent a news release this week saying its adult education program will welcome Eastern Gateway students into its dental assisting, practical nursing and surgical technology programs. The program will waive fees and review transcripts with students to work with them to determine an appropriate track, the news release said.
The Eastern Gateway administrators’ letter said problems had persisted at the college under Geoghegan’s leadership.
“We collectively believe that these problems directly stem from an inability and/or unwillingness to provide effective, competent, and ethical organizational leadership,” it reads. “President Geoghegan’s leadership has had a negative impact on staff morale and has fostered a climate of fear, anxiety, and uncertainty over the past 2 1⁄2 years.”
It says previous efforts to bring the problems to Geoghegan’s or trustees’ attention have been met by resistance from Geoghegan or his designees.
The letter says the cabinet members have “NO CONFIDENCE that Michael Geoghegan has the capacity to provide Eastern Gateway Community College with quality leadership and oversight essential to the health, effectiveness, and success of the institution.”
It points to what its authors call Geoghegan’s unwillingness to accept findings of either the Higher Learning Commission or the U.S. Department of Education, and it suggests a lack of competence to run an Ohio community college.
Higher Learning Commission Report
In November 2021, the Higher Learning Commission placed Eastern Gateway on probation. The commission visited the college last spring, and in November 2023 determined the probationary status should remain.
In a July 2023 report, HLC listed concerns about the college’s rapid enrollment growth and that Eastern Gateway’s size outpaced its ability to adapt and expand data and technical infrastructure accordingly.
“EGCC stands at a serious crossroads given increased expenses, dwindling reserves, federal regulatory sanctions, mounting litigation and continued quality assurance accreditation challenges,” the reviewers wrote.
The HLC review team also pointed to Geoghegan’s dual duties as president and CFO at the college.
“The budget modeling document, cash flow data, and interviews with fiscal officers of the college demonstrated to the team that the college’s financial affairs rest with the CEO who serves as the CEO as well, an unconventional arrangement when compared to what generally exists which reduced checks and balances in a public institution,” the report reads.
It said the deputy CFO couldn’t provide “verbal insights” regarding college finances but offered to provide financial information following the interview. The review team scheduled an interview with Geoghegan to gain more insight into the college finances.
“The team found determinations differed from the college’s response during the fact check of the team review,” the report said. “Issues that remain unclear to the team include: cash reserves, cash flow and audit comparisons. … Additionally, the locus of control of finance creates concerns for informed decision-making in light of checks and balances for a public institution.”
In August 2022, the same month the administrators sent the letter to college trustees, the U.S. Department of Education placed the college on Heightened Cash Monitoring 2 and ordered it to stop its Free College Benefit Program. The Heightened Cash Monitoring 2 means the college had to use its own resources to credit student accounts and wait for federal student aid reimbursements from the federal department.
Free College Benefit Program
The free college program enabled Eastern Gateway’s enrollment to balloon to more than 40,000 students, up from an average of about 4,000. Students in that program – union members and their family members from all over the country and some from Canada – attended mostly online for free.
Eastern Gateway offered it through a contract with a for-profit company, Student Resource Center.
In its directive to Eastern Gateway to end the free college program in July 2022, the U.S. Department of Education said students who received Pell grants were paying more than those who didn’t. It prohibited Eastern Gateway from dispersing Pell Grant funds, which accounts for approximately 74.5% of the college’s overall revenue.
The college sued the federal agency, saying the U.S. Department of Education’s actions threatened Eastern Gateway’s continued operation as a community college.
The two sides reached a settlement in August 2023, and the free college program ended.
Enrollment plummeted. This semester, it’s down more than 63% compared with spring 2023.
Regarding the administrators’ concerns about Geoghegan hiding and suppressing information, they cite: “The college community was not made aware of the impending probationary sanction even though President Geoghegan had a year of advance notice. President Geoghegan has also not discussed or confided in key decisions regarding the Student Resource Center, the Free College Benefit, and the Higher Learning Commission with cabinet. Instead, unduly influenced by a personal relationship, President Geoghegan makes these decisions in consultation with Michael Perik and his counsel.”
SRC and Lawsuits
SRC, the company Eastern Gateway partnered with in its free college program, was led by Perik.
Sterling Small Market Education Fund bought the company in 2021. The new company fired Perik, and in May 2022 the college terminated the collaboration agreement.
SRC sued the college in federal court that same year. According to that lawsuit, the college ended the collaboration agreement, saying Perik’s firing was a breach of the agreement. It contends Perik and others at the company knew about the impending probation status of Eastern Gateway before the sale of the company to Sterling but didn’t disclose it to the buyer.
SRC said in the lawsuit that Perik and others at the company were “replaced because they engaged in fraudulent conduct, including making several false representations regarding EGCC’s accreditation status.”
According to the suit, Geoghegan announced at an Eastern Gateway employee meeting that the college planned to pursue a collaboration with SRC’s union partners without the support of the company.
In its 2023 report, Higher Learning Commission reviewers questioned how a profit-generating model “for a private entity has, such as SRC, shifted to the college that is a non-profit.”
It continues: “The evolving relationship with the SRC shifts the SRC profits as a business to EGCC as it has assumed operations, and thus, the ‘profit’ from SRC would be expected to go somewhere.”
It also notes that Eastern Gateway officials didn’t permit HLC reviewers to see a preliminary report from the U.S. Department of Education regarding the college.
The SRC lawsuit against Eastern Gateway also alleges that the relationship between Perik and Geoghegan goes back to when the latter was the CFO at Cincinnati State Technical College.
After that, he moved on to Eastern Gateway. “Perik knew he needed support from within EGCC and so he offered to help Geoghegan receive a job offer from EGCC as its chief financial officer,” the lawsuit says, without explaining how that job offer came about.
It alleges Geoghegan provided favors to Perik.
“Whenever anyone at EGCC questioned Geoghegan’s financial decisions and Perik’s involvement with EGCC’s affairs, Geoghegan sought to terminate those EGCC employees to continue to provide favors to Perik,” the lawsuit says.
It also says that through Perik’s efforts, “EGCC’s prior president was terminated, and Perik put the pieces in place to elevate Geoghegan to become EGCC’s president …”
The lawsuit claims that by retaining the CFO role, “Geoghegan could keep control of auditing, all to return the favor to Perik, who helped elevate Geoghegan to his new position of power with EGCC.”
It also contends that Perik “caused Geoghegan to be elevated to President despite what Geoghegan’s colleagues felt were a lack of qualifications on Geoghegan’s part since he had no prior suitable experience in college administration.”
Sterling filed a separate federal lawsuit against Perik and other former SRC leaders.
Geoghegan, who was hired as CFO in 2017, became president in 2020 after trustees fired Jimmie Bruce from the role. Bruce, along with another administrator who was also fired, had been charged with several criminal offenses, including misusing a college credit card. The charges against both men were dismissed without prejudice in January, but a criminal investigation is ongoing. Without prejudice means the charges may be refiled. The same month the charges were dismissed, state and federal officers and agents searched college offices at the Steubenville campus.
In May 2022, Geoghegan entered a contract to serve as the college president and CFO through June 30, 2024.
But in June 2023, the college announced that Geoghegan would retire in June 2024, and Crooks would serve as interim president.
Pictured at top: Michael J. Geoghegan, former president and CEO of Eastern Gateway Community College.
Copyright 2024 The Business Journal, Youngstown, Ohio.
