Mortenson and CAI in 2008 agreed to split book promotion costs, and he agreed to contribute the amount he received in royalties from the books bought by CAI, but he did not followed through on either agreement, the attorney general found.
The organization spent more than $2 million on Mortenson's charter flights to speaking engagements, even when the event host paid his travel fees or gave him an honorarium.
Mortenson and his family also charged personal items to CAI in 2009-2010 amounting to $75,276 that included "LL Bean clothing, iTunes, luggage, luxurious accommodations and even vacations," according to the report.
The organization disputes some of the report's findings. The items Mortenson charged were not personal items but legitimate expenses that included clothing for overseas managers and music for presentations, Beyersdorfer said.
Mortenson also was not a good financial manager and was notoriously late in keeping up with payments in line with the royalty agreement, she said.
"He was always committed to an equitable split and just fell behind," Beyersdorfer said.
The settlement agreement calls for Mortenson to reimburse CAI $980,000 for the royalties, book promotions and charter flights where he received separate travel fees from the speaking events. He also was ordered to repay the $75,276 he charged, and any other charges uncovered by an accountant's review of past credit card statements since 2006.
Mortenson still has $560,000 to repay after giving the charity $420,000 last year and a separate check for the charged items. He has three years to repay the balance because he has "insufficient financial resources" to pay it all back at once.
Bullock and Beyersdorfer declined to answer questions about Mortenson's personal finances.
The charity also must expand its board from three to seven members. Two current board members, Karen McCown and Abdul Jabbar, must step down after a year.
Krakauer wrote in his blog on Byliner.com that the corrective actions are encouraging but pointed out that the new executive director and board members will be appointed by McCown and Jabbar with input from Mortenson.
"Neither the Attorney General nor any other outside entity has the legal authority to veto or contest any of the individuals appointed. Given the track record of McCown, Jabbar, and Mortenson over the past decade, this should be cause for great concern," Krakauer wrote.
Associated Press writer Katie Oyan contributed to this report from Phoenix.
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