Aaron Rossi made $3 million pledge to ISU Athletics weeks before his indictment
Six weeks before he was indicted on federal tax-fraud charges, former Reditus CEO Aaron Rossi pledged a $3 million donation to Illinois State University Athletics to help build its new Indoor Practice Facility, WGLT has learned. The timing of the pledge raises questions about whether Rossi legally obtained the money he promised to Athletics.
Rossi’s $3 million pledge – to be paid in $1 million chunks in June 2022, 2023, and 2024 – was never announced publicly and has not been reported until now. It’s unclear if Rossi ever made his first $1 million payment. ISU Athletics says it won’t comment on individual donations.
Rossi faces mounting legal challenges, including civil lawsuits and a still very active federal investigation of Reditus. His company’s profits soared as it became a COVID-19 testing giant, including contracts with the state and ISU. Rossi is accused of looting Reditus to fund his own lavish lifestyle including luxury clothes, cars, and private planes. Reditus has since gone out of business. Rossi has pleaded not guilty to the criminal charges.
ISU Athletics Director Kyle Brennan, who helped secure the pledge from Rossi, declined an interview request from WGLT. Construction on the facility is underway.
“Donor funds are an important part of Illinois State University’s ongoing strategic improvements,” Athletics said in a statement. “While the University doesn’t comment on individual donations, fundraising efforts for the indoor practice facility project are ongoing and will continue. As with any building or renovation project on campus, the University builds in contingency plans to keep projects on track while being good stewards of University resources. The indoor practice facility will be a great asset for all Redbird student-athletes and will also be a valuable community resource. We look forward to its completion later this summer.”
How the project got approved
ISU Athletics has wanted to build an Indoor Practice Facility (IPF) since at least 2010, partly as a replacement for the aging Horton Fieldhouse. The goal was to fund it with private donations and other Athletics funds. Fundraising kicked into high gear in early 2021, when new Athletics Director Brennan announced an anonymous $2 million “lead gift” for the IPF.
ISU’s Board of Trustees in December 2021 approved spending up to $11.5 million on the IPF, but also said that construction could not begin until Athletics secured commitments to fund 70% (or $8 million) of the total cost. An ISU spokesperson said Tuesday that Athletics had already secured commitments totaling 70% by that time.
Rossi signed his Donor Gift Agreement for $3 million on Jan. 26, 2022. The next day, Athletics announced a separate $3 million gift commitment from entrepreneur Dee Miller, his wife Sheila Marshall-Miller, and former ISU student-athlete and NFL player BJ Bello. Around this time, then-ISU President Terri Goss Kinzy toured a Reditus facility and discussed how the university and lab could help each other, a spokesperson told WGLT last year. Rossi’s gift was never made public.
Rossi was indicted March 15, 2022. Three weeks later, the Millers and Bello donned hard hats and got to turn the shovel at the groundbreaking ceremony on April 9. Rossi did not.
“This building represents the potential for greatness at ISU, and is a huge momentum-builder for our Athletics department,” Brennan said at the groundbreaking. “While this may be our first project, it is certainly not going to be our last.”
In May 2022, ISU’s Board of Trustees approved a plan to borrow $11.5 million to pay for construction upfront, and to pay off that debt within 10 years. Funds raised through private donors along with future revenue generated from the use of the facility as well as other Athletics funds would be used to make the annual debt payments (less than $1.5 million per year), an ISU spokesperson said.
At that time, ISU administrators told trustees that they had raised $12 million for the project – $5 million in cash and another $7 million in “donor-signed commitment agreements.” It’s unclear if that $7 million still included Rossi, who had already been indicted by this time.
The borrowing happened, as planned, in June 2022.
It’s also unclear how the project’s financing will be impacted if Rossi’s $3 million (or 26% of the project’s cost) does not materialize. Rossi might not be allowed to make his annual $1 million payments to ISU even if he wanted to. The conditions of his release on bond in the criminal case says he needs a judge’s permission to “dissipate any assets,” including the “transferring or withdrawing any money from accounts held by” Rossi, court records show.
ISU Athletics told WGLT that fundraising for the project is “ongoing and will continue.” ISU officials did not respond to WGLT’s question about what percentage of the project was funded as of today.
Bigger role for donors in college sports
Private donors are playing an increasingly important role in college sports in the U.S. That’s especially true now in the Name, Image, and Likeness era, in which student-athletes at schools like ISU can make money from sponsors and endorsements in ways they never could before.
Brennan demonstrated his fundraising and revenue-generating prowess in his previous job, at Utah. He secured that school’s largest athletics donation ever ($15.6 million) for the school’s men’s lacrosse program, boosted annual giving revenue, and inked lucrative multimedia and apparel rights deals.
Just 18 months into his 3½-year contract at ISU, Brennan last summer was given a contract extension through 2027. Progress on the Indoor Practice Facility was cited in the university’s announcement.
Part of Brennan’s job is to cultivate potential major donors like Rossi. And as Rossi became wealthy during the pandemic, his charitable giving was not confined to ISU Athletics.
Rossi reportedly gave $300,000 to his alma mater, Elmhurst University, for a new video scoreboard and to benefit the men’s soccer team. Rossi donated $75,000 to Bradley University in Peoria to support its Turner Center for Entrepreneurship. And here in McLean County, Reditus provided several hundred thousand dollars in donated COVID tests to Unit 5 schools, which were “crucial in helping our students and staff return to in-person learning,” said a district spokesperson.
Rossi’s philanthropy has faced criticism from James Davie, one of the former business partners who’s now suing him in Tazewell County court.
“Rossi donated misappropriated money to local institutions for his own aggrandizement and public recognition,” Davie’s lawyers wrote in an amendment complaint filed in December. “Most of these donations were simply to aggrandize Rossi and to win more COVID testing contracts.”
Attorneys for Rossi did not respond to a request for comment from WGLT.
Doing your due diligence
Higher education institutions and athletics departments have limited resources to investigate a potential major donor’s background before accepting a gift, said Lisa Delpy Neirotti, an associate professor with the sports philanthropy certificate program at George Washington University. Fundraising staff can run internet searches and try to nail down what a person is worth, she said.
“But they’re not the FBI,” Delpy Neirotti said. “You can’t expect the Athletics department to know if the police didn’t know.”
One way to mitigate the unknown is build a relationship over time. Usually, major-gift donors have given smaller amounts of money previously, said Bill Stanczykiewicz, senior assistant dean for external relations and clinical associate professor at Indiana University’s Lilly Family School of Philanthropy.
“The standard practice is to really take time to cultivate a long-term relationship with the donor, before a high-dollar amount contribution is made,” said Stanczykiewicz. “Therefore, when the donation is made, a level of trust has been established. The institution knows the donor well.”
Fundraisers are not beggars, he said.
“Sometimes, if a gift is coming from an unknown donor, and it creates some skepticism with the fundraiser, the fundraiser needs to do their due diligence to make sure the gift is legitimate, that the donor’s reasons for giving are sincere and are correct,” Stanczykiewicz said.
That’s especially true for building projects funded by multiyear major-gift pledges, he said. It’s common for institutions to manage cashflow by taking out construction loans to get their contractors paid upfront, then pay off that debt over time using donor money, as ISU did here, he said.
“That’s yet another reason why we need to trust that the donor is gonna pay their pledges,” Stanczykiewicz said. “Because if they don’t, now the nonprofit – the university that’s built this new building – is gonna have a loan, and the dollars haven’t come in to pay off that loan. It doesn’t happen often. When it makes the news, it’s in the news because it’s rare.”
Unfulfilled pledges on major gifts are not common, but they do happen, said Delpy Neirotti. Institutions have limited options when they do, she said.
If there’s an understandable reason why the pledge was broken, the institution might try to renegotiate the gift agreement with new terms, Stanczykiewicz said. Legal action is always the last resort, he said.
“Universities and athletic departments – or any nonprofit – is not going to want to be in the news building a reputation that they like to sue their donors,” Stanczykiewicz said.
Miller: ‘Our commitment is the same’
Another major gift commitment to the Indoor Practice Facility was the $3 million pledge from Dee Miller, Sheila Marshall-Miller, BJ Bello.
Dee Miller told WGLT on Monday that they stand by that gift and plan to fulfill their pledge. He said he recently spent time with ISU officials at the Missouri Valley Conference men’s basketball tournament in St. Louis. “Our commitment is the same,” said Miller.
“We love Illinois State University. I met my wife there. My son actually plays in the program. That’s one of my main motivations: Illinois State has given a lot to my family,” Miller said. “I’m very energized by Kyle Brennan and the energy that he brought when he came in. That’s kind of when everything got solidified with us, after he and I had a conversation. Our support is just about being proud of being a part of the university, and wanting to help and pay our blessings forward however we can.”
WGLT is part of ISU’s School of Communication and receives financial support from the university. ISU administrators do not have any role in WGLT’s news coverage.
Timeline: Rossi and ISU Athletics
Here’s a look at former Reditus CEO Aaron Rossi’s relationship to Illinois State University.
8/12/20 – ISU’s Board of Trustees approves a contract with Reditus Labs for up to $3.3 million in COVID-19 tests for the fall 2020 semester.
1/15/21 – Kyle Brennan starts as ISU’s new athletics director, succeeding Larry Lyons.
3/19/21 – ISU Athletics announces $2 million “lead gift” for the Indoor Practice Facility from anonymous donors.
12/11/21 – ISU’s Board of Trustees approves spending up to $11.5 million the Indoor Practice Facility. They say construction can start once Athletics secured commitments to fund 70%, or $8 million, of the cost.
1/26/22 – Aaron Rossi signs his donor gift agreement with ISU for a $3 million donation in support of the Indoor Practice Facility. Payments of $1 million each are due in June 2022, 2023, and 2024.
1/27/22 – ISU Athletics announces a $3 million gift commitment from Dee Miller, Sheila Marshall-Miller, and BJ Bello for the Indoor Practice Facility. Athletics says that gift puts them past the 70% funding threshold.
3/15/22 – Rossi is indicted on federal tax fraud charges.
3/31/22 – ISU officials say $12 million of donor funds have been committed to the project. That includes about $5 million raised in cash and approximately $7 million in donor-signed commitment agreements.
4/9/22 – ISU Athletics hosts groundbreaking for Indoor Practice Facility. The Millers and Bello appear alongside ISU leaders, including then-President Terri Goss Kinzy.
5/6/22 – ISU’s Board of Trustees approves the borrowing plan for the project.
6/30/22 – ISU closes on a 10-year bank financing for $11.5 million to fund construction. Funds raised through private donors along with future revenue resources generated from the use of the facility as well as other available athletic resources will be used to pay the annual debt payments, a spokesperson said.