‘Three Cups of Tea’ author ordered to pay $1m

Greg Mortenson will step down from board of his charity for 'financial transgressions'.

WASHINGTON: A US author, nominated for a Nobel Peace Prize for his work building schools in Afghanistan and Pakistan, has agreed to pay $1 million to his charity after a probe into financial misdealings.

Greg Mortenson, who wrote the best-selling book "Three Cups of Tea" about his work, will also step down from the board of his charity for "financial transgressions" in a settlement reached with the Montana attorney general.

A year-long investigation by the attorney general's office found Mortenson had "failed to fulfill his responsibilities" to his Central Asia Institute (CAI), but that the charity was worth saving.

The probe by Montana Attorney General Steve Bullock followed a CBS television expose last year alleging that some of the most dramatic episodes in Mortenson's best-selling memoir and its popular sequel "Stones into Schools" were fabricated and largely served as a conduit to self-enrichment.

In "Three Cups of Tea" which has sold more than four million copies, Mortenson tells the stirring story of how he was rescued and nursed to health in the remote Pakistani village of Korphe after a failed climb in 1993 of the mountain K2.

He writes it was then, as he recovered, that he first promised villagers to come back and build a school – a decision that gave birth to his now famous campaign across the region.

But Mortenson "had significant lapses in judgment" that caused donations to CAI to be spent on family flights, clothing and Internet downloads, Bullock said in a statement.

He said Mortenson would be removed "from any position of financial oversight" and as a voting member of CAI's board of directors, though the author "will be allowed to continue in a role that best complements his goals as they pertain to CAI's mission."

"Despite the severity of their errors, CAI is worth saving. Its pursuit remains admirable, and it still has significant assets to advance its cause and fulfill the donors' intent," Bullock added, noting that his office had set out monitoring provisions in the settlement agreement.

Mortenson, who has resigned, has agreed to repay "in excess of $1 million" to the charity for financial issues related to his books and travel on CAI's accounts, the attorney general's office said in a report.

The "60 Minutes" report had questioned both the veracity of the story of how Mortenson became involved with Pakistan and Afghanistan and the accomplishments of the CAI since then.

In 2009, the Central Asia Institute said it ran 54 schools in Afghanistan, with 28,475 pupils, most of them girls.

However, CBS program "60 Minutes" said it went to about half of those schools and that of these half were deserted, or operating without links to Mortenson.