6 tell their sides of UA unit woes

Choate says he's scapegoat; Diamond says law ignored

Arkansas Democrat-Gazette/STATON BREIDENTHAL 
Capt. Lindsay Williams of the Arkansas State Police (left) serves a legislative subpoena Tuesday to Brad Choate, former University of Arkansas at Fayetteville vice chancellor of advancement, requiring Choate to testify before the Legislature’s Joint Performance Review Committee.
Arkansas Democrat-Gazette/STATON BREIDENTHAL Capt. Lindsay Williams of the Arkansas State Police (left) serves a legislative subpoena Tuesday to Brad Choate, former University of Arkansas at Fayetteville vice chancellor of advancement, requiring Choate to testify before the Legislature’s Joint Performance Review Committee.

Former University of Arkansas at Fayetteville fundraising division leaders Brad Choate and John Diamond told legislators Tuesday that the state's largest university in the past year has deteriorated into a "hostile work environment" rife with cultures of "cover up" and "delete and destroy."

Chancellor G. David Gearhart, seated beside the two former top employees, denied their accusations.

But Gearhart acknowledged that 18 months of wrestling with a surprise $4.2 million spending deficit in the university's fundraising unit -- and charges and countercharges that resulted -- have been "a humbling experience for me and the university staff."

"I am not here to make excuses, but to say I'm sorry it happened," said Gearhart, who repeated his apology several times during the legislative Joint Performance Review Committee hearing.

At the end of a five-hour session, legislators made no formal decision about what they might do next in examining questions of inaccurate accounting and questionable financial management, and whether the university circumvented the state's Freedom of Information Act regarding public records.

But state Sen. Keith Ingram, D-West Memphis, got around to asking Gearhart, a Fayetteville native and chancellor since 2008, a question about the chancellor's and UA Fayetteville's future.

Citing errors in university accounting and reports that the chancellor had told employees to destroy public documents to keep deficit information out of public view, Ingram said: "The one constant in this has been you, Chancellor.

"With all of this combined do you think you have the [public] confidence to continue to lead?" Ingram asked.

"Yes, sir, I do," Gearhart replied.

Tuesday's meeting was the first time former Advancement Division chief Choate and his budget officer, Joy Sharp, have spoken publicly about what caused the fundraising division's cumulative spending deficit over fiscal 2011 and 2012.

Both were longtime friends and co-workers of Gearhart and were reassigned after the deficit was discovered. They left the university June 30, the end of the fiscal year.

University officials, state auditors and prosecutors have found no evidence that any money was misspent. But Gearhart has blamed Sharp for accounting errors, which she acknowledges, and Choate for lack of budget oversight, which he disputes.

All six main players in the fundraising division's deficit case spoke Tuesday. Besides Choate, Diamond, Gearhart and Sharp, the university's chief financial officer, Don Pederson, and treasurer, Jean Schook, sat at the speakers table and answered questions.

Choate and Sharp made statements to the committee, though Sharp's statement was brief. Diamond, the former university spokesman and an associate vice chancellor, talked about how he believes he was fired in part for voicing his belief that the university was not following state public records laws.

Choate told legislators that the financial crisis "is not a university Advancement failure. This is a failure in the university's Finance and Administration Division."

"By pointing the finger at me -- by accusing me of being inattentive and neglectful in my duties -- they hoped to deflect attention away from serious, systemic problems that would raise questions about the university's inadequate financial management controls and, as the [state] audit revealed, its questionable accounting practices," Choate said.

Diamond, who was the university's public information officer before he was fired Aug. 23, focused on how Gearhart and other top officials responded to records requests from the public and media, including the Arkansas Democrat-Gazette.

"I'll share with you documentable examples of the university's willful disregard for the letter and spirit of FOIA," Diamond said. "And I will explain to you why I believe citizens of Arkansas deserve further investigation into the possibility of perjury and of efforts to subvert the state's Freedom of Information Act, which as you know is a criminal offense in this state."

Gearhart said his most important message "is that we have embraced and have implemented new policies."

State auditors and Washington County prosecutors have said "that most of what has been alleged here today is not accurate," Gearhart told legislators.

Sharp told legislators that because of overwork, she made accounting mistakes, including incorrect revenue projections.

"My part was totally human error. There was no fraud, no intention of fraud," Sharp said. "All expenses were for the university only."

The Legislature's Joint Auditing Committee had invited Choate and Sharp to testify Dec. 13, but those legislators unexpectedly decided to accept the auditors' report on the deficit and adjourned.

The Joint Performance Review Committee held Tuesday's hearing in part to give Choate and Sharp a chance to tell their sides of what happened, legislators say.

Rep. Mark Lowery, R-Maumelle, who requested the committee hearing, said after the meeting that he believes more investigation is needed.

"I think there was enough uncovered today that the Joint Performance Review Committee needs to keep looking into it," Lowery said. "I'm hoping that especially in light of what we heard at the end in regard to the [Freedom of Information Act], that alone is going to keep this fire fueled. There is a systematic failure in transparency."

Lowery also said he hopes that the arrangement between the university and Choate that allowed the former fundraising chief to finish out his contract at the university doesn't get ignored in all the other points raised Tuesday.

"From an observer of all these facts, it appears that keeping him on contract was a way to get him to sign an agreement to be silent," he said. "That's wrong, when they're using tuition money or taxpayer dollars for that."

Other legislators suggested that Tuesday's airing of charges and countercharges by all the main players in the Division of Advancement deficit might be enough.

"Sometimes when you have a wound, you have to pick off the scab to heal. I think we did that today," said Rep. Terry Rice, R-Waldron, after the hearing.

A Section on 01/08/2014

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