Ex-fundraiser, UA both waive any right to sue

Two days after the university announced his successor in February, the former chief fundraiser for the University of Arkansas at Fayetteville agreed not to sue the school or the UA System or make other claims, a previously undisclosed document shows.

In return, UA officials guaranteed that Brad Choate, the former vice chancellor of the University Advancement Division, would remain on the school’s payroll at the same salary and with the same benefits until June 30, according to the settlement agreement. UA officials also agreed not to sue or make other demands of Choate.

The settlement was executed Feb. 15, two days after UA Chancellor G. David Gearhart announced that Razorback Foundation Executive Director Chris Wyrick would replace Choate effective July 1, and would come aboard before then to work with Choate on the transition.

The document was among several that the university released late Wednesday in response to a July 12 Freedom of Information Act request by the Arkansas Democrat-Gazette.

In December, Gearhart and other campus administrators acknowledged that the advancement division had accumulated a deficit over a period of years because of overspending.

The university has estimated that the division closed its fiscal-year budget of roughly $10 million on June 30, 2012, about $3.37 million over budget, though records previously released were unclear on the exact amount of overspending in that year and previous fiscal years.

University administrators learned of the deficit problem in mid-2012 and started trying to sort out what had gone wrong. In November, Gearhart decided not to retain the division’s vice chancellor, Choate, and Choate’s budget director, Joy Sharp, after their appointments expired June 30, the end of the 2013 fiscal year.

Gearhart took over management of the division, reassigning Choate to focus on fundraising and later on helping his successor’s transition, though his $348,175 annual salary, benefits and title did not change. Sharp was demoted and her salary cut, and she was reassigned twice.

Gearhart asked for an audit Feb. 5, and a legislative auditor said that work is expected to be finished later this month or in August.

A spokesman for the Fayetteville campus, Steve Voorhies, said Thursday that the university had agreed to the settlement and release because Choate requested it.

“Joy did not ask for one,” Voorhies said.

The eight-page settlement begins by saying it was executed Feb. 15, though it wasn’t clear on the copy when all the parties had signed it.

Choate and Sharp also agreed Feb. 15 to the release of their personnel records in response to a Feb. 11 lawsuit that the Democrat-Gazette filed to obtain records pertaining to an internal investigation of the deficit.

Parties to the settlement agreement include Choate; Gearhart; the UA System’s board of trustees and its president, Donald Bobbitt; the campus’s vice chancellor for finance and administration, Don Pederson; and its treasurer, Jean Schook, who wrote a report outlining what campus officials uncovered about the deficit, including a finding that Choate had abdicated his budget oversight to Sharp in violation of university policy.

“By executing this agreement, Mr. Choate shall be deemed to have resigned on June 30, 2013,” the settlement reads. It also guarantees him, among other things, access to “information that will reflect his accomplishments and achievements as vice chancellor for University Advancement.

“In exchange for the good and valuable consideration required under this agreement, Mr. Choate hereby grants an absolute, unconditional, and irrevocable release and forever agrees to indemnify and hold harmless the released persons and entities from and against any and all claims and liability of any nature whatsoever, whether existing at law or in equity, including, but not limited to, any and all claimsof any nature whatsoever, known or unknown, arising out of or relating in any way to Mr. Choate’s employment and resignation from UAF as well as any and all additional demands, claims, causes of action, or alleged or actual violations of law now existing, currently asserted or which might have been asserted against any of the released persons and entities at any time or for any reason whatsoever prior to the execution of this agreement.”

The UA parties agreed to hold Choate harmless as well, in virtually identical language.

The settlement agreement protects against future civil legal action only, Voorhies said in response to a question, not potential criminal action.

“However, there was no indication of any criminal activity, no evidence of fraud, no reason to think there was any criminal wrongdoing,” he said.

The chancellor said while acknowledging the deficit publicly in December that no fraud had occurred. But Schook’s treasurer’s report noted her audit wasn’t designed to look for fraud, something that requires subpoena powers.

The university’s latest document release regarding the deficit also contains what appears to be a five-page contract for Choate, titled “Employment Agreement.” However, the copy released as part of Choate’s remaining personnel file has blank spaces that were never supplied with dates and no signatures.

“The employment agreement was something Brad or his attorney had drafted and presented - and the university rejected it,” Voorhies said Thursday afternoon, adding that this occurred in 2008, around the time the university was offering Choate the job.

Choate’s draft contract called for a five-year period that would have begun when he joined the university in 2008 and ended, ironically, on June 30, the date that ended up being his final day.

It also called for a $25,000 signing bonus, the potential for an annual bonus, $62,000 annually for “non-reimbursable expenses,” $1,800 per month for the first six months or until Choate sold his South Carolina home, among other stipulations.

What Choate did get was a 12-month appointment letter on April 4, 2008, in which Gearhart welcomed him aboard effective July 1, 2008, with a $260,000 annual salary. In his first year, he was also granted the ability to “perform off-campus consulting under established university policy” as approved by the chancellor and country club dues paid by the University of Arkansas Foundation.

Records the university has released also show Choate drove a university car and had use of other amenities.