Arkansas Blog

I think the Lu Hardin bonus thing should be put into perspective. Other bloggers have commented that it's past time for leggies to look into how state supported colleges/univ are spending money. There is Legislative Audit group that could be employed.

Now while taxpayers must budget carefully it's past time we do a closer look at how state office holders are spending taxpayers' money. Are we still providing some with luxury autos and trips that amount to nothing?

Damn. I was just about to stroll into the registrar's office and ask for my graduate degree a couple years early. I've applied for admission. I've made wonderful test scores and have a high GPA all in my first semester. Following the board's logic, couldn't they just go ahead and give me that little piece of paper a year and half early? Wish ole' Lu would've kept it, I'd have had a leg to stand on...

I am not a lawyer, but I can't help but wonder how this will be treated for income tax purposes. Can you just give income back to your employer thereby avoiding income tax liability, or is that deemed a charitable contribution which may or may not be fully deductible?

Also, is he giving the full 300k back or is he just giving back the net check (surely UCA withheld something). What about the employer's matching portion of FICA? I am not a tax expert, but I imagine the tax associated with a 300k payout had to be fairly significant.

Lawyers, accountants: any thoughts?

Ole Luther Lu didn't give up easy; finally cracked here in week two. He's been a politician his whole life, so this is just SOP.

Great now Lu can get all this wiped under the rug and smell like a little rose...

"when the board tried to give me a bonus of $300,000 while at the same time trying to raise student tuition, I gave that money back."

HMMMM, smell that-yeah roses....well fertilized roses!

First Stacy Hurst, now this. Maybe the sun should shine on every Venn diagram that plots money against politics.

Boy, the tax angle is interesting. The only figure I've seen bandied about was the 300k which led me to conclude that it was a lump sum in that amount. I suppose that when the shit started to hit the fan, whuch happened pretty quickly, I suppose it is conceivable that Lu didn't negotiate the check. If that's the case, and we don't know, then I guess he could just hand it back. That way it might not be considered income to Lu and no harm no foul.

But I don't know.

I do know this, he had no choice in the given the way some of his fellow college presidents are refusing to accept such bonuses during times of trouble. There ought to be a bell that goes off in your head about the appearance of things. It stunk and they knew it stunk. Why else would they try to hide it?

The tax issue is complicated because this is a deferred comp plan. Not sure how, but I know deferred comp is treated differently than traditional W2 income.

I can't see how Lu can just "give" this money back without incurring tax liability. Seems like a court would have to declare the payment illegal in order for Lu to get around this. He had the money; he earned interest off of it; it was his. He only gave it back when shit hit the fan. Seems to me that is taxable income and he can get an itemized deduction for the charitable contribution (which is limited to 50% of AGI, so he should not get the same amount).

Well I'll swan! I never thought this would happen in a million years! It's a step in the right direction. Now.....let the transparency fall from the heavens on all institutions of higher learning and let's stop with the funny money.....including the U of A Athletic Department!

It's funy to me that everyone acts like Lu has suddenly started doiing things like this only recently. I have a friend that used to be in the HR staff at UCA. I got *lots* of stories out of that one. They're hearsay, but I trust my source... and they should be easy to confirm by any good reporter. Max, I hope you or Brummett (or even the D-G) will investigate these things. I'd love to see all these misdeeds brought to light.

A few years ago, UCA had a position open... something to do with computers, if I remmeber right. Several qualified people applied, but directions came down from on high that they should *really* consider hiring one above the others. The (alleged) guidance from Lu's office was so strong that they weren't allowed to even interview anyone other than his suggested candidate (I think that's a no-no for state funded positions). Here's the punchline - turns out that the applicant was the nephew of Lu's wife, Mary. Was hired on the spot. Worked there a while, then got promoted (appointed ? the new position was never openly announced) to the housing department on campus making more than most faculty members with advanced degrees. He made quite a show of his family connections and loved to flaunt his favored status. He's since left, but the smell of the whole situation remains.

Here's another. Lu (allegedly) got his hand slapped a few years ago by Higher Ed because of some strange enrollment numbers. Seems that many of the students that they were counting as enrolled had actually been attending other schools. They had applied to UCA, but decided to go elsewhere. Didn't matter... rumor is that Lu (allegedly) ordered several key department heads (registrar, student accounts, admissions, institutional statistics, etc.) to count them anyway, and the cooked numbers were presented to the Ledge in oder to get more money for UCA (more bodies=more cash). ADHE only caught it because they were seeing the same SSN's enrolled at more than one school. I'd love to see FOI turn up some emails between UCA and ADHE... they should tell quite a tale. I would imagine that giving intentionaklly inflated numbers to influence the funding formula is also frowned upon.

As for dealings with board members... doesn't it seem odd to anyone else that Rush gave UCA a cool million right around the same time that Lu went to the Ledge and got the law changed so that UCA could do business with board members ? And, shortly after that, Rush sold some brand-new apartments to UCA... but I'm *sure* he didn't make much from it. Took a hit to help the poor students, no doubt. In a nice bit of turn-about, he then went to bat for Lu to get his 100k bonus (for increasing enrollment, it's said. See story 2 for the irony) and he's still taking care of him today.

Isn't the board technically supposed to have some oversight over the Prez ? Sounds like they're busy overseeing the fattening of their pockets (at taxpayers' expense) and giving rubber-stamp approvals to whatever Hardin wants to do.

Way to go. Center of Graft.

Max, I just don't understand the "pass through." If I make a gift to UCA, if it is not made to the Foundation which is a legitimate non-profit, who does one make it to? Surely an unrestricted gift can be used as such, or if a patron restricted his/her gift for the purpose of supplementing salaries for key employees it would be used for the stated purpose. I agree that since our Foundation is not totally independant as to its operating budget that anything in there can probably be FOI'ed. I am sure I am in your new packet of info and I stand ready to answer any and all questions and document completely anything that might interest you. I guess gifts I have made to the Foundation for African/American scholorships are a "pass through" or gifts to endow a chair in the college of education or gifts to help the football squad get a new lounge and weight room. The Foundation must be considered a legitimate funding source to supplement needs we have at the University. In a perfect world, we would all be totally independant like the UA, but no one in AR has their resources. Thanks for always being fair, presenting both sides of the question, and providing a forum for your readers.

ARK. BLOG: Practicing law without a license here again, I think you may be right about a straight pass-through. Money drawn from foundation reserves, given what's commingled there, could be problematic though. You're right, however. It's mainly an FOI issue. As long as there's public support, it's all open.

I do think there have been some fair questions raised on a Chronicle Higher of Education thread about this concerning private support from singular quarters for high university officials -- whether in Conway or Fayetteville or Baton Rouge or Austin, Texas -- particularly gifts by other university officials. They can create the appearance of undue influence, even undue influence in the direction of worthy causes. This is true even in the case of singular gifts from non-officials. See Fayetteville, where some on the faculty still simmer over the spending of Walton millions in favored disciplines versus disregard for their own. Tricky business.

I thank you again for responding and explaining. It's the best medicine.

I just now saw "Death by Inches" show up. The school had tremendous growth, we had no place to put all the kids. The school wanted to rent apartments and put four students to each two bedroom unit. I have a partner who manages that partnership. My partner did not want to rent because of the number of tenants per unit and the parking was not adequate. The Foundation got an appraisal, the University got an appraisal and we provided the lender's appraisal (Bank of the Ozarks) to the Foundation. The way I remember it, the two lowest appraisals were averaged and the purchase price was discounted by 500,000. That is the only purchase I can remember in 18 years where property was purchased at less than the highest or the average of two appraisals. UCA requested the same exemptions that the UofA has from the legislature. Those are the facts. Death by Inches, my name is Rush and my phone number is 907-2000 if you need further information, please call. I will be out of town tomorrow afternoon and Friday morning.

I just now saw "Death by Inches" show up. The school had tremendous growth, we had no place to put all the kids. The school wanted to rent apartments and put four students to each two bedroom unit. I have a partner who manages that partnership. My partner did not want to rent because of the number of tenants per unit and the parking was not adequate. The Foundation got an appraisal, the University got an appraisal and we provided the lender's appraisal (Bank of the Ozarks) to the Foundation. The way I remember it, the two lowest appraisals were averaged and the purchase price was discounted by 500,000. That is the only purchase I can remember in 18 years where property was purchased at less than the highest or the average of two appraisals. UCA requested the same exemptions that the UofA has from the legislature. Those are the facts. Death by Inches, my name is Rush and my phone number is 907-2000 if you need further information, please call. I will be out of town tomorrow afternoon and Friday morning.

The scary part is that no one in the administration or on the board of trustees seem to think that being paid "bonuses" out of private money in not unethical. Having one or more wealthy donors who will write a check to take care of any little issues that might come up is not the way things should be done. Public service is just that, if you need bonuses then get a job in business. Of course there can be no charge of conflict of interest because UCA had pet legislators pass a law to declare that trustees can do business with the university without conflict.

I'm sure it's just a coincidence that Haley Crafton was the perfect fit for a job in student services immediately after she graduated from UCA. (See http://www.uca.edu/divisions/academic/provost/NewFacDir2006.pdf)

I think I'll make a donation to whoever pays for the UCA Corruption billboard on Dave Ward Dr.

You are so wrong, she is a hard worker, loves UCA, loves Conway. She does a great job in her department, anyone will tell you that. UCA simply received the same exemption that the UA has had for years. To retain a great coach or President or administrator, we often have to supplement the amount the state allows us to pay. That is simply how the world works. Pick on me all you want, leave hardworking, worthy young people out of it.

Rush, I agree that innocent bystanders should be left out of this mess. It is a shame that a situation ever developed that would lead people to question their qualifications.

There is so much that has occurred this summer that just doesn't smell right. For example, the cut in retirement benefits were supposedly due to "surprising" news about a regulation that was publicized in July of 2004. Maybe someone wasn't doing their job to prepare for implementation this year. Or, maybe the cuts were *made possible* by actions of the U.S. Supreme Court on March 25 of this year (about the time the "emergency" came to UCA's attention).

Comparisons have been made between Lu and Win. Win could be a prick; he did what he wanted, very openly, and didn't care what people thought. Lu is a nice guy. How should this comparison be completed?

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The sun will never shine though on anyone with reporters for friends.
Apparently if Lu had been an ex-reporter with lots of reporter friends this would have been ignored.
Not a simple FOI request would have even been made.

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"Win could be a prick"
Oh, yes, he was a complete prick. Lu is, too. A lifelong Democrat (I'll admit it's hard to tell who's a Democrat in Arkansas anymore), Lu swirched parties because of greed.
So, giving back $300,000 to a poor state supported school is fine, but I still can't stand him. Boo, Lu!
Kiz

Sorry Mr. Rush. It wasn't me who talked about your apartments. All that was news to me. So far, I don't know enough to know if you're a good guy or a bad guy. But I appreciate you coming here and duking it out instead of having your lawyer issue a bunch no comments.

Sorry, "death by inches" , blogging is relatively new to me and I read up instead of down. That was my friend, "09f9" piling on with 4 year old stuff that I have already been beaten up about in the media. My parents went to UCA, I went to UCA, my wife went to UCA. If having a historical relationship with me or my family disqualifies someone from being considered for a position at UCA, we will have a little trouble hiring folks in the Faulkner County area. Win was a tough minded, in your face, effective leader. You are right that he did not give a rat's a__ what anyone thought, he did what he thought was best for the school and let the chips fall. Lu is very media sensitive and is genuinely a nice man that wants everyone to like him. The fish bowl is too big and alligator skin must be developed and business will never be conducted the same at UCA. You have to look for the positive in everything. UCA will be much better for having experienced this, I have lost more sleep (notice the time) than weight, but the lost pounds are needed and welcome. Of course, the next round for me is that my firm, which I no longer have any ownership in, does bond business with the school. I have a list compiled of every bond issue for Higher Ed in AR for the last four years, the underwriter of record, and the gross fees earned. Of course those for UCA are the most efficient of all, not just some, and Crews was hired pursuant to a published RFP. Crews is owned 100% by First Security Bank, I do sit on the board and I own approximatley 1/10 of 1% of the stock of the bank. The gross fees earned by Crews cumulatively are less than the cost of the jumbotron we just had installed at Estes Stadium. That seems to be good use of your vendors by the school. Oh well, if anyone wants that info it is available, as well as any documentation on the apartments. I am confident that a good portion of this heat is generated by those still upset over the developement of the Cadron Valley Golf Course in Conway, that dispute went all the way to the Supreme Court, you would think that would be far enough. I am equally as confident that a larger portion of the heat comes from the fact that I need to reevaluate how I do business, especially in a public forum as a trustee of a public institution. Thank you all for reminding me and others of this high calling.

I guess someone being 'loved by everyone' or 'loving the University/Conway' makes the stinky family connections null/void...in UCA Board of Trustee Land. It's unquantifiable bullshit in zelda land. In fact, I've never seen a resume that listed 'being loved' as an important asset for hiring. But I'm just an ordinary UCA graduate who thought knowledge/experience were the way to open employment doors. (I remember Rush well; Lu came after me.) So, please, Rush/Lu, quit reciting how 'loved/qualified' your 'special' hires were when you bypassed normal state-hiring procedures to hire them. They may be exceptional people...we'll never know...because right now they're just certified members of the state's good old boys club. Do either of you actually understand those silly state guidelines...or do you understand them, but don't feel bound by them?

What state entity/office is responsible for making sure that state institutions follow state guidelines? Though just one UNCONNECTED little voice, I'd like to chat.

And I thought Thompson was greedy/arrogant.

And when is the next tuition increase?

Recent grads make the best employees of a university. I was lucky enough to fall into a job at UCA upon graduation. I doubt you would have found someone other than a student to do what I did at 70+hrs/week, travel, weekends, evenings, etc. for the $24k I was paid. I did it because I loved UCA and I loved my job.

The students that stand out at universities are student leaders, through their leadership they develop a love and admiration for their school beyond that of the average school. Many hope for the chance to work for the school that worked so hard for them.

While at UCA as an employee my best friends and colleagues were in the same boat. We went to school there, we were in student government, student activities, student orientation, etc. I am grateful for my experience at UCA, and while I am no longer an employee I am forever indebted as an alum, donor, (though I will never check "unrestricted" again) and fan.

And while I may not agree with Lu on some of his practices, this thing on the hiring of a student who happens to have deep ties to the school is flat out silly.
-MZ

"And while I may not agree with Lu on some of his practices, this thing on the hiring of a student who happens to have deep ties to the school is flat out silly."

You are missing the point. UCA grads with much more experience than this young UCA grad didn't even have the opportunity to apply for this position because she was handpicked by Lu -- if that is his real name -- Hardin. UCA grads just as loyal to their college who could put the college in a better position due to vastly more experience were cut out of the process for Lu's own personal agenda, which included the fact that her mom was a BofT member. Same thing with Warwick -- He was handpicked for the position he's in, which means all UCA grads with communications degrees and experience were screwed out of the process. That isn't supposed to happen at a public university.

"That isn't supposed to happen at a public university."

Maybe it isn't supposed to happen, but it does, and not just at UCA! I am sure there are plenty of people who have been hired at the UofA, ASU, UALR, UAPB, UAM, ATU, SAU, OBU, HSU, Harding, Hendrix, etc. just because they "know" someone who can get them a job! As far as I am concerned this is a non-issue!