LOW FINANCE

AN ECONOMICS MAGAZINE FOLDS AFTER AMASSING A HUGE DEBT.

Stone was asked to resign in December 1990. He agreed. As they cleaned out his office, the Tregarthens uncovered--literally--more evidence of why the magazine was stumbling. "We discovered invoices in his desk drawer, behind filing cabinets, that had not been entered into the magazine's ledger, giving a rosier picture of The Margin's health than what really was," Suzanne recalls. "Literally, things were hidden; we were afraid to lift up the carpet for fear of what we'd find."

The final tab was sobering. When all the invoices and genuine receivables were figured, the Tregarthens calculated that, instead of running a surplus, The Margin was now suddenly $250,000 in debt.

The university launched what was to be the first of two internal investigations in early 1991. Suzanne recalls one early meeting with Stone and James Null, dean of UCCS's School of Letters, Arts and Sciences. Stone told Null the advertisers were lying about being promised free ads. "All of the advertisers?" Null asked. "Yes," Stone replied. (Null did not return phone calls from Westword.)

According to Beeton, the university's spokesman, the investigation found "absolutely no grounds whatsoever for criminal proceedings." Still, the probe was less than revealing. Even now, says Beeton, nobody is entirely clear how The Margin nose-dived into a quarter-million-dollar hole in a little over a year. "Why that happened, or how that happened--your guess is as good as mine," he says.

The Tregarthens also began checking up on Stone on their own. They discovered that, although Stone apparently had taken courses at Cal-Davis, the school had no record of his having received a degree. (UCCS had not required Stone to submit transcripts with his job application.) Stone also claimed that he had taught at Davis. Untrue, according to the university's registrar.

Although the massive debt left the magazine's future murky, one thing was clear: Because the university had absorbed The Margin five years earlier, it was now responsible for its bills. In October 1991 the University of Colorado treasury extended a $250,000 loan to UCCS to wipe off the red ink. The Margin, in turn, was to repay UCCS $35,000 a year over seven years; UCCS supplemented that with an additional $11,000.

The Margin managed to meet the payments for a short time. After cutting costs drastically--several positions were eliminated, and the magazine was scaled back to a twice-yearly publication--The Margin stayed afloat for nearly two years. This January, however, Suzanne Tregarthen, who had been brought back as editor, recommended the university cease publication because The Margin couldn't pay its debts in 1994. The final edition was dated Spring 1994.

On May 2 the University of Colorado system released the results of its own investigation into The Margin's finances. It blamed no single person for the fiasco and praised UCCS for moving quickly to correct the deficit. The report concluded that the magazine had run up a huge debt because its accounts receivable were overstated, its production costs had risen and it was suffering from unreliable financial information. Yet its authors also acknowledged that their analysis was hampered by incomplete financial records.

Unfortunately for UCCS, there was still the matter of the $200,000 it owed the University of Colorado treasury. In an attempt to recoup some of that, this April UCCS mailed letters to 200 companies that might be interested in purchasing what remained of The Margin. Seventeen responded and were asked to submit formal bids. By the bid cutoff date last month, however, none had been received.

Meanwhile, this December UCCS will cut the first $46,232 annual check out of its general fund to repay the University of Colorado's treasury for the bail-out loan. According to Financial Services Director Paris, UCCS will make the final payment on The Margin's debt in 1998.

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