The ex-chancellor of Arkansas State University used his standing with the school more than once to secure special privileges, including attempts to earn more financial assistance for his college-going daughter and having a company hire a family friend, according to audit documents released Thursday.
Tim Hudson, 62, resigned from his $360,000-a-year post late Tuesday -- effective immediately -- in an email to ASU System President Chuck Welch. His wife, Deidra Hudson, who managed the study-abroad program in a part-time capacity and resigned last month, was supposed to continue through the end of the summer programs, but she is no longer with the university.
The ex-chancellor is leaving the university that he led for four years with no severance pay, only accrued vacation time in accordance with state law. He and his wife have 45 days from Tuesday's separation agreement to move out of the chancellor's home in Jonesboro.
The latest audit was presented to Welch last week, he said, and he passed it along to ASU System trustees and Arkansas Legislative Audit on Thursday. The state agency receives all internal audit reports and reviews them. The ASU System released two audits on the study-abroad program -- one in July and one Thursday.
[DOCUMENTS: Latest Arkansas State University System audit findings]
[DOCUMENTS: Read Hudson’s resignation letter and separation agreement with ASU]
The Arkansas State Police's Criminal Division has not received any requests to review the audits. Prosecuting Attorney Scott Ellington of Jonesboro said he has not received the audits.
"Obviously, I was very disappointed," Welch said Thursday. "We knew we would have to take the necessary steps to rectify this."
Tim Hudson did not return a message left on a cellphone Thursday.
The latest audit reported that beginning in late 2015, Tim Hudson began reaching out to contacts at other universities that his daughter, Gianna Grace, was interested in. On Dec. 2, he emailed Karl Benson, commissioner of the Sun Belt Conference, asking for any contacts at Loyola University in New Orleans.
Benson did not have contacts, but he said he would help identify some so Tim Hudson could be introduced to them while in town, emails show.
On April 21, Tim Hudson emailed the Rev. Kevin Wildes, the president of Loyola, with the subject line: "Daughter at Loyola; From Chancellor Tim Hudson, Arkansas State University." In that email, Tim Hudson talks up his daughter and said that he and his wife "have to be somewhat conscious of costs" as his then 15-year-old twins also would soon go to college.
"Loyola has offered her a scholarship and for that, we are grateful," Tim Hudson wrote. "However, if there is any additional assistance that you or others might provide, I believe that would confirm her decision for her as she clearly prefers Loyola over the other institutions."
He added: "I know you must deal with these matters every day (I know I do) and I apologize for putting another case on your desk. But, without trying to be too insistent (which, from fathers can backfire), I have been doing my best to steer her to Loyola. Any additional financial consideration at this juncture would be appreciated."
Six days later, Loyola's vice president for enrollment management replied to the Hudsons saying the eldest daughter would receive $3,000 in financial assistance.
Tim Hudson wrote up similar emails to administrators at the University of South Alabama -- "... her Dad, as subtly as I can without creating the opposite result, is thumping for South Alabama." -- and at the New York Institute of Technology.
ASU is now home to a second campus of the New York Institute of Technology's College of Medicine, which will have a white-coat ceremony for its inaugural class today.
Tim Hudson had reached out to the New York-based school's administrators in an effort to start up a tuition agreement that would have allowed the dependents of employees at either ASU or the New York Institute of Technology "discount" undergraduate tuition, documents show.
He also had looked into bringing ASU into the New York Institute of Technology's Tuition Exchange Program, which would have qualified his daughter for a full-ride scholarship, emails show. That agreement never materialized, Welch said.
ASU System internal auditors said Arkansas Code Annotated 21-8-304 prohibits officials from using their positions to secure special privileges or exemptions.
The audit released Thursday looks into the Hudsons' personal relationship with the family owns Grupo Sense, an information, publishing and education conglomerate that owns Multisense. Multisense was the third-party vendor that the university was using to facilitate study-abroad trips to Spain.
Grupo is owned by Alfonso Rubio. His wife, Adela Diez, is the company's vice president. The couple have two sons: Pablo Rubio and Carlos Rubio.
Tim Hudson told Welch he had been on Grupo's board but did not serve on it when he arrived at ASU, Welch said.
The second study-abroad audit began with an anonymous call to the system's internal auditors on April 8, asking "when are you going to investigate the relationship between the Hudsons and the Rubios?" the caller said, detailing some of the deals between the two families. "If this is not tit for tat, I am not sure what is."
It is unclear how far back the relationship between the two families ran.
The audit shows that Alfonso Rubio was on the University of Houston-Victoria regional board when Tim Hudson was president there.
The University of Houston system did not receive any allegations about the relationship between Tim Hudson and Alfonso Rubio but had received a similar complaint about Hudson's travel. Internal auditors there found no wrongdoing.
Emails between the two families get personal, and they refer to each other affectionately.
For example, on Nov. 16, 2015, Carlos Rubio emailed Tim Hudson with news that he'd had a baby and that he marked down the now ex-chancellor as a contact in a visa application. Carlos Rubio starts off with "Dear Uncle Tim" and signs off saying, "Give lots of kisses and hugs the the Hudson Family, my Familia :)."
The Hudsons arrived at ASU in May 2012. In November, Tim Hudson sent two ASU employees "on a week-long, fact-finding mission to Spain to explore the possibility of an ASUJ Lanjaron, Spain study-abroad program that was eventually provided by Multisense," according to the audit.
The chancellor's office paid for expenses, including airfare and reimbursement requests. Alfonso Rubio picked up the two employees from the airport and took care of their accommodations there, including lodging, meals and local travel, the audit states.
Later, Multisense was selected as the third-party provider for the Lanjaron study-abroad trip without a competitive bidding process. The university has paid the Spanish vendor more than $250,700 over the past three fiscal years, with two invoices emailed straight to Deidra Hudson's private email account.
In late 2013, Tim Hudson sent his wife an email, giving her direction on the Spain study-abroad program.
"The only topic to 'avoid' IF you include others is the budgeting/invoicing issue which you and I will handle with Alfonso," he wrote.
Auditors cited the ASU System's policy on nepotism.
Multisense's bills in 2014 and 2015 were itemized in broad categories, internal auditors said, and they could not differentiate among certain expenses.
Once in 2015, Deidra Hudson had helped a faculty member get an apartment in Lanjaron but had requested an additional $226.06, which auditors said covered the difference in costs between a hotel room in Spain and the cost to rent Alfonso Rubio's apartment.
And earlier this year, Deidra Hudson sent an email to Alfonso Rubio, asking to use the apartment for personal reasons.
"The Hudsons are planning a trip to Spain for the Summer," she said. "I want to take the children to Lanjaron. Is your apartment free the nights of June 22 and 23?"
He wrote back in Spanish," My house is your house. ...The apartment is free for you these days and always."
Auditors cited Arkansas Code Annotated 21-8-304, prohibiting special privileges using an official capacity.
According to audit findings, "[t]he Chancellor endorsed Pablo's employment with a company doing business with ASU, involved him in fact-finding with a company potentially doing business with ASUJ, and eventually hired Pablo to work for ASUJ throughout the years 2013 through 2016."
In 2013, Tim Hudson asked the CEO of Academic Partnerships in Dallas to hire Pablo Rubio to do consulting services at the Jonesboro campus. The Hudsons hosted a dinner with the company's CEO and Pablo Rubio listed as two of 11 guests, the audit said.
"I recommend that AP seek a short term consulting relationship with Pablo Rubio, who we both now know and who is generally open to this idea, to abet this process," Tim Hudson wrote in a later email to the company's CEO. "Arkansas State can offer some in-kind assistance if you choose to make this investment."
On April 23, 2014, Pablo Rubio emailed Deidra Hudson saying he needed to use Multisense, the third-party study-abroad vendor for ASU, as a contractor for the services he was providing Academic Partnerships so he could get paid.
"The reason I chose to make it this way is mainly because I knew that Multisense was registered in the State as a contractor already, due to its business with ASU," he wrote.
Tim Hudson replied, saying the payment approach confused him.
"Overall, matters are complicated enough and I strongly suggest leaving anything to do with the ASU -- Multi Sense relationship in Spain completely separate from AP," he said. "'All things international' in public universities such as ASU are subject to routine independent audits in which any 'deviations' are viewed with suspicion."
Once Pablo Rubio's employment with Academic Partnerships ended, Tim Hudson began inquiring within ASU whether he could hire "a foreign national" as a chief of staff. He said he needed someone fluent in Spanish.
On Feb. 11, Pablo Rubio accepted a $70,000 offer to be an executive assistant to the chancellor. The start date was listed as three days earlier, the audit shows. As part of the offer, Pablo Rubio stayed in a fully furnished, on-campus apartment provided by the university. Only three other employees have a similar living situation, but they are required to live on-campus as they are "area coordinators."
Even before the hire, Carlos Rubio had emailed Tim Hudson, thanking him for giving his brother the job opportunity.
"I believe it's going to be very positive for him, since the last job had him too isolated, when guidance, protocols and having a reference, in these late 20s still so needed for professional development," Carlos Rubio wrote in the Nov. 16, 2015, email. "I'm convinced that he will find all that in your team and that he will return an interesting insight too."
Pablo Rubio resigned from the university on July 8, saying he wanted to get back to Europe "to pursue professional opportunities and to be near my growing family."
Auditors said Tim Hudson did not disclose the potential conflict of interest for five years. ASU System policy doesn't allow any agreements that may have a conflict of interest to be made between employees or outside entities without approval.
They also said that the ex-chancellor did not list gifts of more than $100 on statements of financial interest. Arkansas Code Annotated 21-8-701 requires state entity leaders to fill out statements listing gifts.
Tim Hudson went to Spain twice, once in 2012 and again in 2014, for an international conference on regional development. He had fees for local transportation, workshops and the conference waived each time and he did not list them as gifts.
In an interview Thursday, Welch said the internal audit controls worked as they were supposed to.
"We're going to do some work on this," he said, adding he wasn't aware of anyone else's involvement or any missing money. "There are no other audits or investigations pending."
A Section on 08/05/2016