Friday, September 2, 2011


A few years ago the president of my university resigned and received a seven-figure contract buyout after a fraud was uncovered in his request for an accelerated bonus.  Among the unseemly details that were unearthed after his departure were an addiction to high-stakes slot machines that put him in debt and later got him brought up on federal charges.  It was a terrible time for our university as six years of deception and backroom deals unraveled in full view of the press.

After what many in the faculty considered a disappointing search process, a new president was hired in early 2009.  We were all ready to rebuild our finances and our reputation, but progress proved elusive.

Today that president resigned, just two and a half years into his contract.  It happened so fast most of us barely had time to process it.  Last week the Board of Trustees met, and in the course of normal business were informed of a $700,000 "unrestricted grant" from Aramark, the university's food service contractor, to be used for renovations to the president's residence.  Now, leaving aside how an "unrestricted" grant can be earmarked for a particular project -- in the financial world I inhabit, "unrestricted" means you can do anything with the money -- this was a curious occurrence in many ways.

The president's residence dates back to the WPA.  Research done by my freshman students last year revealed that when it was built, students regarded it as a marvel, since no houses of that magnificence existed for miles around.  The president's contract requires him to live in the house, and once again campus, our newly minted president circa 2009 immediately began requesting upgrades.  The new satellite package, flat-screen TVs, and hardwood floors had murky origins, but wherever they came from, over the last two years hundreds of thousands of dollars have been spent on the building.  Problems with mold and asbestos were discovered, and the president and his wife vacated to another campus-owned house several months ago.  A committee was formed to report to the Board of Trustees about options for the house; it was reported that the 5000-square-foot house was felt to be unsuitable for a college president, especially if one with a family and children were to occupy the position in the future.  Additions were discussed, along with other options, like replacing the contract provision with a stipend to pay for other housing or purchasing another home in Conway, while turning the president's residence into a reception or events center.

When the $700,000 "gift" was announced last Friday, the board's chairman described it as a "godsend."  Due to public and faculty pressure, the prospect of using public funds for further renovation to the home was unattractive to the board.  The Aramark grant allowed work to go forward with private money.  That is, until the newspaper reported Tuesday that the gift came with strings attached.  The letter from Aramark management offering the funds stipulated that the money was conditional on a ten-year renewal of the company's contract with UCA, a contract that according to reports nets upwards of $6 million per year for the company in meal plans and catering revenues.

Board members professed to be livid that they had not been informed of this condition before voting to accept the money and go forward with architects on renovations to the property at Wednesday's meeting.  The president and board chairman apologized, while defending themselves with the contention that deals like this do not constitute kickbacks or corruption because they are common across large institutions; food service companies often contribute large amounts for infrastructure improvements that house their operations, such as the construction of cafeterias or retail locations.  The difference in this case seemed to be how the deal was presented to the Board and what they thought they were voting on, and perhaps about the presumption of Aramark preempting the decision of the committee working on the issue of what would happen to the house.  To be equivalent to those situations at other universities, Aramark would be paying for renovation of a building they expected to occupy, and that everyone else expected them to occupy.

A special meeting was called for Thursday, responding to news stories appearing in the morning papers.  The board refused to grant the president's request to reside elsewhere, and members often responded testily to the discussion about the boondoggle.  When yet another board meeting was announced for today, with an executive session (dealing with personnel issues) beginning immediately upon its commencement, the campus community knew immediately that the president's employment was what was under discussion.  And indeed, the news that came out of the meeting confirmed it, with a buyout of his contract to the tune of half a million dollars and the naming of longtime senior staffer -- and former interim president after the Hardin debacle -- Tom Courtway as interim president yet again.

It's deeply disheartening to have this happen again.  And yet, unfortunately, it's not surprising.  The search process in 2008 appeared to focus not on the candidate's credentials, impressive as they may be, but on his hometown connections as an alumnus of the university and a fraternal connection to folks in a position to make it happen.  We have this supremely frustrating tendency in Arkansas -- maybe elsewhere, too, but Arkansas has it in spades -- to mistrust outsiders to the extent that we will manipulate any process of appointment or hiring to insure that only insiders get the jobs.  This is the second time in ten years that it has bitten us in the behind and further damaged the good name of an institution that has existed for a hundred years and survived wars and depressions.  How many more chances will the public give us to get it right?

1 comment:

Anonymous said...

Thanks for a succinct account of the Aramark episode at UCA.