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University Board Of Trustees Should Go
Last updated Friday, October 10, 2008 6:14 PM CDT in Columns
By Doug Thompson
THE MORNING NEWS
The members of the University of Central Arkansas Board of Trustees should resign.
The board opened a line of credit two years ago. It did not know it was supposed to inform the state, board members told Arkansas Business magazine. It didn't tell the either the Department of Higher Education or the Department of Finance and Administration about the line of credit.
Then the board clearly does not know its business. Guess what would happen if I went to my boss, opened up a credit card account that he was liable for in the end and decided not to tell him.
Now the university is $5.43 million in the hole, according to the magazine. Much of that was caused when the lending crisis locked up a fund managed for UCA by Wachovia Corp. Who knows when we would have found out about the line of credit without the crisis.
Now guess what would happen when I went to my boss and told him I'd run up a $5,430 bill on that credit card I never told him about.
The state Department of Higher Education is expected to OK the board's action by retroactively approving it. They don't have much choice.
In short, the UCA board acted like many a freshmen kid. They went off to college, got a credit card, got in over their heads and had mommy and daddy get them out.
It's just a bump in the road, a cash flow problem, we're told. It's still an embarrassment that's not worthy of a board. Those members are called trustees for a reason.
It's a handy display of how connected the lending world has become. Some bank in the Carolinas gets in trouble and, the next thing you know, a careless college board has a problem and state taxpayers have to underwrite the debt.
All this happens weeks after a scandal forced the university's president to resign. This same board approved a secret bonus for him supported by shaky documents.
Here's a little free advice, board. If you don't resign, at least tell us what's next. Taxpayers are getting tired of these surprises.
Speaking of lending surprises, somebody needs to say this out loud: Any chance of avoiding recession is long gone. All the various government bodies can hope for is to shorten the downturn and lessen the impact.
The lending bailout's going to hurt. Just wait until the auto industry bailout starts.
The Chevrolet Volt electric car can't save GM if nobody can get a car loan. General Motors stock now sits at its lowest price in my lifetime, plus nine years. GM and Ford debt sit on the edge of junk-bond ratings.
Looking for a bit of good news, I read a Friday article by Paul Volcker, a former head of the Federal Reserve. He said in part: "First of all, there is now clear recognition that the problem is international, and international coordination and cooperation is both necessary and under way. The days of finger pointing and schadenfreude (joy in others' misfortune) are over. The concerted reduction in central bank interest rates is one concrete manifestation of that fact."
That's a point. If everybody but the most partisan of Democrats and Republicans can stop arguing about what caused all this and concentrate at possible cures, that's progress.
All this would be a lot easier if that $700 billion bailout had more immediate, visible effects. Passing it and then watching Wall Street tank anyway was a bitter pill for a lot of taxpayers who angrily opposed this plan in the first place.
About this columnist
Doug Thompson of Fayetteville covers politics in fast-growing Northwest Arkansas. A native Arkansan, Thompson covered the Northwest region for the Arkansas Democrat-Gazette for three years before he and his wife, Lisa, left to join Stephens Media Group in February 2002. Lisa is now managing editor for The Morning News.
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mec wrote on Nov 13, 2008 12:28 PM:
He seems to be the only one with scrupples.
As to the Federal Reserve, please call it what it is and that is a private entity who happened to stick in the name "Federal" to lend some authority to it.
As to the bail out----NO, NO, NO, NO
As to the auto industry bail out--NO, NO, NO, NO,
The UAW needs to take the union dues, the same dues used by the union to help Democratic Party candidates (in the millions) and use it to help their own auto industry. These millions would help their union members and the corporations far more.
I won't bail them out until they bail themselves out!!
The same with the federal bail out shoved down the taxpayers throats by the likes of Chris Dodd and Barney Franks. NO, NO, NO WAY "