Handout via Reuters

Greg Mortenson, author of "Three Cups of Tea," posed with schoolchildren in Afghanistan. He has come under fire for exaggerating and conflating certain details in his book, and four readers filed suit against him.

A federal judge on Monday dismissed a lawsuit against author Greg Mortenson, calling claims "flimsy and speculative" that the humanitarian and his publisher lied in his best-selling "Three Cups of Tea" and "Stones Into Schools" to boost book sales.

The civil lawsuit by four people who bought Mortenson's books said they were cheated out of about $15 each because the books were labeled as nonfiction accounts of how Mortenson came to build schools in Central Asia.

The lawsuit by four readers from Montana, California and Illinois was filed after "60 Minutes" and author Jon Krakauer reported last year that Mortenson fabricated parts of those books.

The plaintiffs said Mortenson, co-author David Oliver Relin, Penguin and Central Asia Institute were involved in a fraud and racketeering conspiracy to build Mortenson into a false hero to sell books and raise money for CAI, the charity Mortenson co-founded.

Haddon wrote in his ruling that their racketeering allegations "are fraught with shortcomings" and the plaintiffs' "overly broad" claims that they bought the books because they were supposed to be true aren't supported in the lawsuit.

The ruling is good news for Mortenson and his charity after the Montana attorney general earlier in April announced a $1 million agreement to settle claims that Mortenson mismanaged the institute and misspent its funds. The agreement removes Mortenson from any financial oversight and overhauls the charity's structure, but did not address the books' contents.

"He stands by his books," said Anne Beyersdorfer, the charity's interim executive director, of Haddon's ruling.

Mortenson was on his way to Pakistan on Monday and could not immediately comment, she said.

"Three Cups of Tea," which has sold about 4 million copies since being published in 2006, was conceived as a way to raise money and tell the story of his institute, founded by Mortenson in 1996.

The book and promotion of the charity by Mortenson, who appeared at more than 500 speaking engagements in four years, resulted in tens of millions of dollars in donations.

The book recounts how Mortenson lost his way after a failed mountaineering expedition and was nursed back to health in a Pakistani village. Based on the villagers' kindness and the poverty he saw, he resolved to build a school for them.

The lawsuit claimed, as did the Krakauer and "60 Minutes" report, that Mortenson fabricated that story and others in the book and its sequel, "Stones Into Schools."

Morentson has denied any wrongdoing, though he has acknowledged some of the events in "Three Cups of Tea" were compressed over different periods of time.

The judge did not address allegations of fabrications, but wrote that the plaintiffs can't simply rely on general allegations of lies in making a claim.

In fact, many of the items that the lawsuit lists as lies the defendants made after the books were written, such as CAI paying for Mortenson's expenses and purchasing his books, "do not actually appear to be untruthful or illegal, and are overly vague," Haddon wrote.

Haddon also ruled that the plaintiffs can't rewrite their complaint to address those shortcomings, noting that the case has been pending for nearly a year and the lawsuit already has been changed five times.

"The imprecise, in part flimsy, and speculative nature of the claims and theories advanced underscore the necessary conclusion that further amendment would be futile," Haddon wrote.

Plaintiffs' attorney Zander Blewett did not immediately return a call for comment.

The plaintiffs had asked Haddon to order Penguin to account for all the money collected from book sales and refund that money to people who bought the books, with the rest going to a humanitarian organization.

The yearlong Montana attorney general investigation found that Mortenson's poor record keeping and personnel management resulted in unknown amounts of cash spent overseas or for management costs without receipts or documentation. CAI's two other board members were Mortenson loyalists who generally did not challenge Mortenson, and he resisted or ignored CAI employees who questioned his practices, the investigative report said.

Mortenson also reaped financial benefits at the charity's expense, including the free promotion of his books, and the royalties from thousands of copies the organization bought to donate to libraries, schools, churches and military personnel, the report said.

The organization spent more than $2 million on Mortenson's charter flights to speaking engagements, and Mortenson and his family also charged personal items to the charity, according to the report.

Beyersdorfer has said Mortenson will remain the face of the charity, but it won't be as executive director and he is barred from being a voting member of the board of directors as long as he still draws a paycheck from CAI.

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Greg Mortenson poses with Sitara "Star" schoolchildren in Wakhan, northeastern Afghanistan in this undated handout file photograph released to Reuters March 11, 2009.

A federal court is expected to hear accusations Wednesday that author and humanitarian Greg Mortenson fabricated parts of his best-selling books "Three Cups of Tea" and "Stones Into Schools." 

A hearing is scheduled in Great Falls, Montana on claims that Mortenson lied about how he came to build schools in Central Asia after losing his way in a failed mountaineering expedition and being nursed back to health in a Pakistani village. 

 The lawsuit — filed by two California residents, a Montana man and an Illinois woman who bought the books — list more than two dozen alleged fabrications and accusations of wrongdoing by Mortenson, publisher Penguin Group, co-author David Oliver Relin and the Central Asia Institute. 

The plaintiffs say Mortenson and the others purposely presented the lies as the truth to trick readers into buying the books and donating to the charity. They accuse Mortenson and the others of racketeering, fraud, deceit, breach of contract and unjust enrichment. 

A First Amendment expert calls the lawsuit absurd, regardless of whether the books contain fabrications. 

'Three Cups of Tea' author Greg Mortenson must pay $1 million to charity

Mortenson did not defame or harm anybody in his books, and barring narrow exceptions like national secrets, he can write what he wants and does not have to justify it, said Wayne Giampietro, a Chicago attorney and general counsel of the First Amendment Lawyers Association. 

"It's his story. It purports to be his experiences. He can say it any way he wants to say. He has the right to publish anything he wants about himself," Giampietro said. "The idea that you can be sued because perhaps they don't like what you wrote, for whatever reason, is absurd." 

Lawyers for Mortenson and Penguin Group plan to argue that very point before U.S. District Judge Sam Haddon. They are asking Haddon to dismiss the lawsuit, which seeks triple the amount of total books sales, plus punitive damages. The lawsuit is asking a judge to order that everybody who bought the books be refunded. Whatever money is left over would go to a humanitarian organization selected by the plaintiffs' attorneys and approved by the court 

That promises to be several million dollars. "Three Cups of Tea" alone sold about 4 million copies. 

The hearing comes less than two weeks after Mortenson and the Montana attorney general announced a $1 million agreement to settle claims that Mortenson mismanaged the Central Asia Institute and misspent its funds. The agreement removes Mortenson from any financial oversight and overhauls the charity's structure, but it did not address the contents of the books. 

That's where the civil lawsuit comes in. The four plaintiffs allege that Mortenson, Relin, Penguin, the Central Asia Institute and Mortenson's consulting group, MC Consulting, were involved in a conspiracy to promote and sell the books based on lies. 
"The enterprise's fraudulent scheme was to make Mortenson into a false hero, to sell books representing to contain true events, when they were false, to defraud millions of unsuspecting purchasers out of the purchase price of the books and to raise millions of dollars in charitable donations for CAI," their lawsuit alleges. 

The claims cite a laundry list of alleged fabrications. They include Mortenson's recollections about holding Mother Teresa's hand while her body was lying in state in 2000, when Mother Teresa actually died three years earlier. 

Those and several other alleged fabrications in the lawsuit were first brought to light last year by author Jon Krakauer and a "60 Minutes" story that questioned the truth behind Mortenson's writings and whether he was benefiting from his charity. Those reports prompted the Montana attorney general's investigation and also the civil lawsuit whose original plaintiffs dropped out months ago. 

One of the lawyers in the case is Larry Drury, who also represented plaintiffs in a class-action lawsuit against James Frey, who admitted on the "Oprah Winfrey Show" that he lied in his memoir "A Million Little Pieces." 

That lawsuit ended in a settlement that offered refunds to buyers of the book. 

Drury and fellow plaintiffs' attorney Alexander Blewett say the Mortenson and Frey cases "are stunningly close." 

Mortenson and Penguin don't argue that the events in the books are true, though the publisher says that nobody can rely on the truth or accuracy of autobiographies because they are based on the authors' own recollections. 

Both Mortenson and Penguin argue that the plaintiffs can't prove that they were actually injured by anything that was written in the books and that this lawsuit amounts to a threat to free speech. 

Penguin attorney F. Matthew Ralph says that if a publisher were required to guarantee the truth and accuracy of everything an author says, the costs of publishing books would be prohibitive. 

"No standards exist for drawing the line where 'fiction' becomes 'nonfiction' or vice versa; and the courts are not a proper place for developing such standards or policing that line," Ralph wrote.

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AP

Award-winning “Three Cups of Tea” author Greg Mortenson has agreed to pay $1 million to a nonprofit he co-founded to settle allegations that he misspent charity money on personal items such as plane flights for family vacations and iTunes downloads, the Montana attorney general said Thursday.

In a 44-page report, Attorney General Steve Bullock said a yearlong investigation by his office concluded that Mortenson mismanaged his nonprofit, the Bozeman-Mont.-based Central Asia Institute, and personally profited from it.

“Mortenson’s pursuits are noble and his achievements are important. However, serious internal problems in the management of CAI surfaced,” Bullock said in the report.

Mortenson didn’t immediately respond to a request for comment through the Central Asia Institute. Interim director Anne Beyersdorfer told The Associated Press that the author will continue to be a paid employee, promoting CAI and building relationships overseas, but will no longer be on the board of directors.

“While we respectfully disagree with some of the analysis and conclusions in the OAG’s report, we look forward to moving ahead as an even stronger organization, focusing on CAI’s vital mission,” Beyersdorfer said in a separate statement on the CAI website.

“CAI has always been a small group of dynamic, mission-centric individuals doing extraordinary work. Mistakes were made during a rapid period of growth, and we have corrected or are in the process of correcting them.”

Mortenson became a huge name in philanthropy – and quite wealthy – after his 2006 book, “Three Cups of Tea: One Man’s Mission to Promote Peace … One School at a Time,” became a No. 1 New York Times bestseller. He followed up with another bestseller, “Stones into Schools,” in 2009.

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In “Three Cups,” Mortenson tells of how his failed 1993 attempt to climb K2, the world’s second-tallest mountain, resulted in a series of happenstance encounters that led him to establish schools for impoverished children in the remote villages of Afghanistan and Pakistan.

But his reputation as an international philanthropist and globetrotting do-gooder became tarnished after an April 2011 “60 Minutes” report in which author and fellow climber Jon Krakauer cited witness accounts that contradicted essential parts of Mortenson’s version of his experiences in South-Central Asia. The report also raised questions about the way his charity’s funds were being managed and spent.

Read the full AG's report

The report led to an investigation by the Montana attorney general’s office, which reviewed thousands of pages of documents and took sworn statements from Mortenson and others.

Bullock noted the investigation did not focus on whether Mortenson lied in his books, and it didn’t turn up evidence of conduct that could lead to criminal prosecution. Instead, it looked into CAI’s arrangements with Mortenson concerning his books and speaking engagements, as well as the financial affairs of the charity.

The probe found that the Central Asia Institute had spent about $3.96 million since 2006 to buy copies of "Three Cups of Tea," which were then distributed to libraries, schools, the military and others. Mortenson was supposed to provide a contribution to CAI equal to the amount of royalty payments he received from the book purchases, but failed to do so, investigators concluded.

The report also noted that Mortenson made hundreds of public appearances and speaking engagements to promote the book and CAI, often receiving sizable speaking fees. At the same time that the CAI was paying for his travel costs, many event sponsors were paying for similar costs. “Thus, Mortenson was ‘double dipping,’" the report said.

In one of the most damning passages, the report said:

“Mortenson, in particular, consistently failed to comply with either commonly accepted business practices or CAI’s policy manual with respect to documenting expenses charged on CAI’s accounts. The issue was repeatedly raised through the years. Board members testified that despite requests, cajoling, demands and admonitions, they were unsuccessful in getting Mortenson to submit proper documentation to support the charges he was making to the charity.

The board went so far as to provide Mortenson with a personal assistant while traveling. This, however, also failed, as the personal assistant, himself, did not adequately comply with expense reimbursement requirements, nor did he cure the problems relating to Mortenson’s expenses.

The more significant issue was not simply compliance with expense reimbursement and documentation policies, but the nature and magnitude of charges for which inadequate documentation exists. Through the years, Mortenson charged substantial personal expenses to CAI. These include expenses for such things as LL Bean clothing, iTunes, luggage, luxurious accommodations, and even vacations."

Under the settlement agreement, Mortenson must reimburse the charity more than $1 million. Nearly half has already been repaid.

Mortenson underwent surgery in June 2011 to repair a hole in his heart, and he later stepped down as executive director of the organization.

Beyersdorfer said the fallout from the investigation won't detract from the Central Asia Institute's mission of helping children in fofgotten places.

"News fatigue about Pakistan and Afghanistan is evident everywhere we look these days. But the children and their parents, village elders, and teachers with whom we work cannot look away; this is about their futures," she said in a statement. "Greg and our overseas managers have dedicated their lives to helping fulfill countless dreams and aspirations and we are honored to continue our life-changing work together."

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