Recently, as part of my endeavour to read all the unread books on my shelf, I tackled the soporific Three Cups of Tea (2006, paperback 2007) by Greg Mortenson and David Oliver Relin. While leaving my review on Goodreads I stumbled across the scandal that plagued the book and its authors in 2011, complete with a 60 Minutes investigation that triggered another investigation by Montana’s Attorney General. That investigation would ultimately see Mortenson ordered to pay restitution to the charity he founded, the Central Asia Institute (CAI). Despite not having been a party to the deceit perpetrated by Mortenson and CAI, Relin committed suicide in November 2012, just months after the attorney general released his April report.
For the most part, the scandal focused on fabrications found in the non-fiction book and first reported by donor-turned-critic Jon Krakauer in his short ebook Three Cups of Deceit. Although first billing went to Mortenson, Three Cups of Tea was obviously written solely by Relin, whose “hagiographic” (to quote Krakauer) depiction of Mortenson was, for many including me, off-putting. I could not help but think throughout my read that the book had been written solely to raise awareness and funds for CAI. This, it turned out, was in fact what transpired. And it was in the details of the Montana AG’s report that I found what for me was far more interesting than the authors’ fabrications: the buying of a bestseller.
The book was published by Viking Penguin, but Three Cups more closely resembled a vanity publishing venture: CAI paid $367,000 to produce the book, with Viking providing the veneer of legitimacy. CAI then spent $4.9M advertising the book even though advertising is rightly the responsibility of the publisher, further suggesting this was very much a case of vanity publishing masquerading as a traditional publishing deal. CAI also spent $3.96M buying books to give away for free, and it was here that the bestseller story was hatched.
CAI was buying books to give away to the various schools, churches, and community groups where Mortenson was lecturing to raise funds for the charity. As the author of the book, Mortenson had the right to buy copies directly from Viking at wholesale, but such direct sales are not counted by the various bestseller lists such as that of The New York Times. So, in a plan reminiscent of The Discipline of Market Leaders, Mortenson convinced the CAI that buying from retailers would be better because they could fulfill orders faster and drop-ship at a lower cost. The charity, for reasons that baffle me, believed this. By bulk-buying from various retailers, CAI bought Three Cups a place in the retailers’ bestseller lists and then the established print bestseller lists.
It has been proven that once you get onto the bestseller lists, the status becomes self-perpetuating: people buy books they see on the lists. Three Cups went on to spend 220 weeks* on the The New York Times Bestseller List (and others), sold over four million copies in the U.S., became required reading in many U.S. schools’ curriculum, and was translated into 47 languages.
By buying from the retailers, Mortenson also bought himself a paycheque: publisher-direct copies pay no royalties but retailer copies do. Despite the book being a work-for-hire, the copyright of Three Cups was held by Mortenson and Relin; the writers’ royalties for Three Cups therefore went to Mortenson and Relin instead of to the charity that commissioned the book. The authors thus earned millions in personal income from purchases made with donor funds and by the duped public.
The authors of The Discipline of Market Leaders considered the $200K they spent buying their own books to be a sound investment because landing on bestseller lists often leads to speaking engagements, more book deals, and consulting work.
Mortenson indeed landed another, traditional, book deal (and sizable advance) from Viking for Stones Into Schools, and demand for speaking engagements soared. In 2008 Mortenson made 120 speaking appearances, 160 appearances in 2009, sometimes two in one day in different states. In 2010 he made 142 speeches, with as many as four in one day. His schedule became so hectic that he began hiring private planes, also at the charity’s expense. Mortenson didn’t start paying for his own travel expenses, which were often paid by both CAI and the groups who engaged him to speak (so he was also double-dipping), until 2011 when the scandal broke.
In 2008 Mortenson was charging a speaker’s fee of $15,000 plus expenses, which rose over the years to a high of $30,000, out of which $7500 (25%) was paid to Penguin’s marketing department who organized the events. Nothing of the fees was shared with the charity. (I estimate that Mortenson grossed almost $7M in speaker’s income).
So what was in this for CAI? The book’s success resulted in a huge and steady year-over-year increase in donations to CAI, from around $900,000 per annum in the three years before the book came out to a high of $23M in 2010.
When investigated by the Montana AG, CAI’s board admitted they justified the publishing costs and related expenses by telling themselves so much good would come of the work done with the donated funds. It was a classic case of the end justifies the means.
This justification became even more dubious when the Montana AG ordered an independent audit of the charity’s expenditures in Central Asia. As it turned out, many of the “selfless heroes” of the book had their hands in the pot. The worst offender was Lt. Col. Ilyas Ahmed Mirza, who siphoned out hundreds of thousands. According to Krakauer, CAI has so far refused to make the damning audit public on their website, and the man who blew the whistle on Mirza was thrown under the bus.
When the report was released in April 2012, the Montana AG ordered Mortenson to pay back just under $1M in restitution to the charity, with further restitution due upon a full audit, and he was forbidden from ever again holding a voting position on CAI’s board or to hold any position that gave him financial oversight. Despite the malfeasance, Mortenson remained the face of the organization, earning $194,000 in salary and benefits last year. Donations to CAI have dropped from a high of $23+ million in 2010 to $2M last year.
Last month Mortenson announced his resignation from CAI, effective January 2016.
*the AG report says 57 weeks but that is clearly a typo: it should read 57 months.