Austin News

The Roy F. and JoAnn Cole Mitte Foundation once again finds itself at the center of legal controversy in litigation brought against it by two real estate partnerships, continuing nearly 20 years of legal difficulties for the nonprofit organization.

Gregory Milligan, the Mitte Foundation and three attorneys were named as defendants by 1st and Trinity Super Majority and 3rd and Congress Super Majority, the Southeast Texas Record reported.

The plaintiffs alleged in their amended petition in in Travis County District Court on July 13 that the Mitte Foundation has limited minority partnership interest in both real estate partnerships, but repeatedly breached its obligations, colluding with other defendants by sharing confidential information and soliciting offers to buy assets of the partnership, which had grown in value, the Southeast Texas Record said.

Milligan was put forth by the Mitte Foundation as a neutral receiver in arbitration. The plaintiffs’ complaint said Mitte had a relationship with Milligan going back to August 2019 when he was given documents under a district court protective order.

In 2019 the Mitte Foundation’s leadership was also in the courts, with President Dilum Chandrasoma charged with allegedly causing bodily harm to a family member, the website TheyArrestedMe.com reported.

Back in 2008, his predecessor and the son of a Mitte Foundation founder, Scott Mitte, were caught up in his own legal troubles with an arrest on cocaine charges that led to Texas State University at San Macros to cut all ties with the nonprofit organization, The Chronicle of Philanthropy reported.

Denise M. Trauth, who remains president of Texas State, told San Marcos campus sports fans that she returned gifts in support of a scholarship program using the Mitte name and that she quit the foundation’s board.

Mitte allegedly used foundation funds to buy doors for his home and concert tickets and to deal with sexual harassment lawsuits filed against him. Since then the Mitte Foundation has pulled out of scholarship support at several colleges because it was running out of money, The Chronicle reported. The foundation reported assets of $26 million in 2006 and said it suffered with the downturn in the stock market.

A university spokesperson said the decision to cut ties went beyond Mitte’s arrest, saying it was linked to the foundation’s steady degradation.

The Mitte Foundation’s assets had steadily declined since 2003, when the Boston Globe reported it had $43 million.

Concert tickets, a custom tuxedo and new doors were among purchases allegedly delivered to Mitte’s home. Travel and meeting expenses ballooned from $50 a year in the late 1990s to $183,000 in 2001, the Globe reported. This was at the same time his compensation jumped to $220,000 from $31,000 in 1999 when he was named president.

Legal fees rose as well, jumping more than 550% in 2002 to $368,000

Once the sexual harassment charge against Mitte became public, Mitte left the executive director position in August 2002.

While his son was having problems, foundation founder Roy Mitte was caught in a legal dispute with Austin-based Financial Industries Corp. He was fired as chairman, president and CEO. FIC alleged he charged the life insurance company $540,000 in unauthorized personal expenses, the Austin Business Journal reported in January 2004.

Mitte denied that accusation, and another claim in the lawsuit filed against him in U.S. District Court in Austin that he moved $1 million from FIC to the Mitte Foundation.

As this dispute continued, the Mitte Foundation filed with the U.S. Securities and Exchange Commission to hold a special shareholders meeting to replace the FIC board entirely, including Roy Mitte and his son, Scott, the Austin Business Journal reported.