Documents: Hardin Asked For Bonus, Urged Secrecy

Last updated Wednesday, July 23, 2008 8:55 PM CDT in News

By John Lyon
The Morning News

Board member Rush Harding III of Little Rock confirmed the deferred compensation proposal "was enacted subject to some legal assurances from the administrative staff and some questions as to where the source of funds was going to come from."

The board has not taken any further action on that issue, Hardin said.

"I think the timing is not good to look into that now," he said.

In a March 25 letter to board president Randy Sims, Hardin said the pay of top officials at the University of Arkansas, the University of Mississippi and Mississippi State University ranged from $423,100 to $444,500, while Hardin's pay was $252,300.

Hardin wrote he did not want a salary increase, however.

"While I will be almost $50,000 below the U of A system (in salary alone), we should not increase the salary at this time. Because of state funding issues, we are looking at a 5 percent tuition increase. Arkansas State University is planning a 6.3 percent increase, and the U of A is planning a 6 percent increase," Hardin wrote.

Instead, Hardin recommended the board give him a $300,000 bonus two years ahead of schedule. The board had voted three years earlier to give Hardin the bonus after five years.

The board would not have to vote to award the bonus because "this vote has been taken," he wrote.

Hardin further recommended the board allow him to receive $150,000 per year in deferred compensation and said "this does not require a public vote because it is 'deferred.'"

The board approved the bonus during a closed executive session at its May 2 meeting. Board members made no mention of the bonus in open session, voting only on unspecified personnel proposals.

A document distributed to board members in the executive session at that meeting advised because the $300,000 bonus had been voted on three years earlier, "a mere vote for the money to be transferred is all that is needed." The document bore the names of Jack Gillean, UCA's vice president for administration, Barbara Anderson, executive vice president, and Paul McLendon, vice president for finance.

The document also advised deferred compensation "does not immediately vest and therefore is not subject to FOI (the state Freedom of Information law)." It concluded: "The motion publicly simply would be to approve all personnel proposals."

Gillean and McLendon did not immediately return calls seeking comment Wednesday. Anderson said she contributed some of the information included in the document but not the parts addressing public disclosure - though she accepted responsibility for all of it.

"It was an error in judgment, and with hindsight being 20-20, we (should) have done it differently," she said.

Board member Dr. Mike Stanton of Conway, who provided the documents to The Morning News, said the decision to approve Hardin's request was not unanimous.

"I talked to Lu before the meeting and told him I didn't think this was a good idea, and you should know that I voted 'no' in executive session," Stanton said Wednesday.

Hardin told reporters after the May 2 meeting he did not receive a raise, but he did not mention the bonus. After the bonus became public, he said it came from private money.

In an opinion requested by Sims, Attorney General Dustin McDaniel said Tuesday the money was public money, not private. The money came from private vendors' sales of books and food to students.

McDaniel also said university employees cannot be paid with public funds in excess of state-mandated salary caps, indicating Hardin's bonus likely violated state law.

Hardin said Wednesday he genuinely believed in May the money for the bonus would be considered private money and that public disclosure was not required.

"I was simply wrong," he said.

Hardin received the bonus at a time when faculty members were being told they may not receive raises this year. He said his comments to the board about not disclosing the bonus publicly were not politically motivated but were part of an "academic" consideration of the issue.

"In retrospect I have deep regret about even academically looking at the FOI. That should have never been an issue," he said.

University of Arkansas System spokesman Ben Beaumont said the University of Arkansas Foundation has been contributing to a deferred compensation package for the system's president, B. Alan Sugg, since receiving approval from the UA system's board in a public vote in 1998.

The first contribution was $40,000, but the amount has grown over the years and was $150,000 in 2007-08, Beaumont said.

Beaumont said the UA system does not maintain the arrangement is exempt from the Freedom of Information law.

"There's a legal argument to be made that it's private money and the foundation is a private entity, but there is public record of a board chairman requesting this from the foundation every year, so we believe that makes it public record," he said.

Reader Comments (2 comment(s))

The following comments are provided by readers and are the sole responsibility of their authors. The Morning News does not review comments before their publication, nor do we guarantee their accuracy. By publishing a comment here you agree to abide by our comment policy. If you see a comment that violates our policy, please notify the web editor.