The Investigators

Report: UT Southwestern Spent $1000s On Wine

DALLAS (CBS 11 News) ― Top state officials at the University of Texas Southwestern Medical Center in Dallas spent tens of thousands of dollars in donations on luxury wines from prestigious New York wine merchants.

A CBS 11 News investigation of charges to the university's credit cards found that President, Dr. Kern Wildenthal, and his right hand assistant, Vice President, Cyndi Bassel, spent more than $125,000 on wine.

The spending is detailed in monthly statements obtained under the Public Information Act that partially cover spending for twenty months of purchases. The purpose listed beside each item on the statements indicates that the wine was bought for official university donor functions and donor gifts.

Dr. Wildenthal and Ms. Bassel made sixty-nine purchases alone for more than $100,000 worth of wine from Acker, Merrall, & Condit, a premier wine shop and auction house located in New York City.

According to Dallas wine steward, Darryl Beeson, it's the oldest wine shop in America dating to the 1820's. "They are very highly regarded internationally and they're great wines which are priced accordingly. It's the higher end and higher priced."  Beeson questioned why anyone in Dallas would seek wine at a New York establishment that caters to the eastern wine connoisseur.

A UT Southwestern spokesman says the state healthcare institution purchased the wine with money from unrestricted donations and not tax funds.  John Walls explained the wine expenses in a written statement, "The purchases from New York dealers were for hard-to-find wines not readily available in local retail shops, which were especially appropriate for individual commemorative gifts and special recognition events."

The New York Times described Dr. Wildenthal as an expert in fine wine in a 1999 profile on how he cultivated Dallas's wealthy to get huge donations.  He is the highest paid president in the UT Healthcare System, with an annual salary and benefits totaling more than $1 million.

The credit card statements also list purchases from the Burgundy Wine Company, a New York merchant, that takes pride in only selling wines from the finest vineyards.

Between March and mid-April of this year, Wildenthal and Bassel ordered wine almost every other day of the work week for a grand total of more than $30,000.

They ordered nearly $8,000 worth of luxury wine from the Dehlinger Winery in California.  It's a renowned vineyard among wine connoisseurs that's located in the highly prized Russian River Valley of Sonoma County.  Most of Dehlinger's wine sales are limited to members of its wine club and the company's website indicates that it sold out of its latest production in early 2007.

CBS 11 learned that the winery is owned by family members of Dr. Wildenthal's wife.  Margaret Dehlinger Wildenthal is an official special assistant to her husband and has been approved by the UT Board of Regents to also use the university's credit cards.

Dr. Wildenthal refused to do an on camera interview about his credit card purchases at his university office.  CBS 11 approached the president with questions about his wine purchases outside his home as he was leaving for work.  Wildenthal gunned the engine of his Lincoln Towncar sedan and sped away.

UT Southwestern's spokesman says Mrs. Wildenthal has no financial connection to the winery and described Dehlinger's wine as one of the most outstanding bargains among all wines.

Dallas attorney Charla Aldous says the wine purchases do not pass the smell test.  Aldous represents faculty physician Dr. Larry Gentilello in a civil rights legal action against the university. Gentilello alleges that he was demoted after complaining that underprivileged patients were being treated by residents without proper supervision by physicians.

Aldous says the wine purchases should be the subject of an independent audit. "It raises a lot of questions, especially when you look at the fact that the indigent patients are not being treated the way the rich, powerful, influential patients are being treated."

UT Southwestern's spokesman says internal audits and those by the UT System and State of Texas have found that all of Dr. Wildenthal's credit card expenses were appropriate.

But, the question remains as to how many bottles of luxury or vintage wine were bought with donor's funds for $125,000. Who received it? The university has not come up with any receipts or shipping invoices requested by CBS 11 under the Public Information Act in late September, and it has declined to disclose the names of donors who received the gifts of wine.

The following are statements from UT Southwestern in response to the investigation:

The UT Southwestern institutional credit card expenditures for travel, memberships, entertainment and donor-appreciation activities are audited by our internal auditor, by the UT System auditor, and by the state auditor. The auditors have found that the expenses are appropriate, and there have been no adverse findings against the institution regarding travel and entertainment expenses or our reporting methodology.  Nor have any changes in our practice and policies been suggested.

Furthermore, it is notable that our expenses related to fund-raising are among the lowest in the nation, both in terms of the absolute expenses and in terms of the ratio of our expenses to private donations received by UT Southwestern.  Regarding the philanthropic donation to UT Southwestern made by Dr. Wildenthal and his spouse, their gifts and pledges total more than $1 million, half of which has been requested to be used for development-related expenses.

Any implication that the expenditures or business practices of UT Southwestern constitute inappropriate conduct would be a serious misrepresentation of the truth.

<em>In a separate email, the university responded again:</em>

Wine purchases in the past two years were larger than in other years because of plans to recognize our many major campaign donors at the end of our campaign with many special events and special gifts, including wine. Efforts have been made to buy in bulk in order to take advantage of discounted prices.  UT Southwestern buys wine for its events directly from distributors in order to avoid mark-up costs that occur when caterers supply wine.

The purchases from New York dealers were for hard-to-find wines not readily available in local retail shops, which were especially appropriate for individual commemorative gifts and special recognition events.

The university's wine is kept in secure locked storage rooms until used.

The Dehlinger Winery (with which Mrs. Wildenthal has NO financial connection whatsoever) is well known as one of the most outstanding bargains among all wines.  For example, in a recent Robert Parker Wine Advocate review, he said, "Dehlinger gets my nod as one of California's most unassuming and modest wine producers.  A true friend of wine consumers, he keeps prices fair and quality high.  Kudos to Dehlinger, who seems to be content to stay under the radar and simply make an assortment of very fine wines as well as realistically priced wine."  In other words, this wine is purchased because of its exceptional quality-to-cost ratio. 

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