Bank tied to Henderson State chief wins school bid

Henderson State University has switched its banking services to Arkadelphia-based Southern Bancorp Inc., where the school’s president, Glen Jones Jr., is board chairman, records show.

Additionally, Chris Wewers, the board chairman of the HSU Foundation, the university’s fundraising arm, is chief financial officer of Southern Bancorp. Wewers has held that banking position since 2015, according to his LinkedIn resume.

The only other financial institution submitting a proposal was Bank OZK, formerly Bank of the Ozarks, which handled the university’s banking until the change, which the university completed in March. Ross Whipple, a member of Henderson’s board of trustees, sits on the board of Bank OZK, based in Little Rock.

On whether Jones had recused, university spokesman Tina Hall said in an email, “Dr. Jones removed himself from the decision-making process.”

Earlier, though, Hall emailed an explanation of the process by Brett Powell, Henderson’s vice president of finance and administration. Powell said a six-member university committee “made a selection based on the proposal scoring sheets. The results of the process were then reported to the president and me, and the winning bidder was notified.”

Those scoring sheets, signed Dec. 20 and obtained under the Arkansas Freedom of Information Act, show that Southern Bancorp tallied 110 points to Bank OZK’s 107 points.

A review of those records, however, indicates the vote would have been tied had not three members gone back, marked out earlier scores and replaced them with lower ones for Bank OZK.

Those committee members were Johnny Hudson, current board of trustees chairman and a strong ally of Jones; Karen Spradlin, director of accounting in the school’s business office; and David Rodriguez, assistant professor of finance.

Each of the three wrote in an explanation for the initialed change on the scoring sheet’s “cost of services” category.

“Wasn’t clear on bid that we’d be charged for ATM machine,” Spradlin wrote.

“They were not paying the highest rate,” Hudson wrote.

“After further consideration of interest rate difference,” Rodriguez wrote.

Other committee members were Lecia Franklin, controller; Ty Woodson, lead business analyst in information technology services; and Vickie Shipley, an accountant.

University policy did not require that the decision go before the full board of trustees.

Powell said Henderson’s procurement and business offices ran the request-for-proposals process and that the school’s controller and purchasing director determined committee membership except for the trustee.

“As with other recent bid processes, we included one board member on the review committee,” Powell said. “We requested the president’s office make the decision on which board member should be involved.”

Hall said Jones had referred the question of which trustee would serve in that position to Bruce Moore, then the board of trustees’ chairman. Moore in turn recommended Hudson, she said. While Jones advised Powell of that recommendation, Hall said, the president’s approval was not required.

Moore and Hudson have been vocal supporters of Jones on an often-divided board of trustees. Whipple, a trustee since 1996, also tends to side with Jones.

“Having been involved in bids for 30-some-odd years for my business, to my knowledge … no one from either institution tried to influence the bid,” Whipple said Wednesday. “And I believe that to be factual.”

Jennifer Boyett, the foundation’s executive director, said Wednesday that two banks service the foundation: Citizens Bank and Southern Bancorp.

Wewers became the foundation’s board chairman on July 1, she said.

Hall referred questions about the foundation to Boyett, who did not reply until after the Arkansas Democrat-Gazette resent its questions as a request under the Freedom of Information Act.

Section 4.3 of the foundation’s bylaws says the foundation’s directors “shall be nominated and elected by the Board of Directors and then confirmed by the Henderson State University Board of Trustees.”

Henderson had been with its previous banker “for a number of years,” said Steve Fellers, another university spokesman.

“Even when not required by state code or regulations, we believe it is in the university’s best interest to periodically review significant [service] providers to ensure that we are meeting current industry standards with the best possible financial terms,” Fellers said in an email.

At the nonprofit American Council of Trustees and Alumni in Washington, Armand Alacbay, vice president for government and trustee affairs, said, “The operative principle here has to be transparency.”

Speaking in general rather than about any specific university, Alacbay said any trustees or other people in leadership at a public university “who had even an idea that something may present a conflict have a duty to recuse themselves from any discussion that should later give the appearance of impropriety.”

“They ideally should disclose any potential conflict before the issue is considered,” he said.

Jones’ most recent statement of financial interest filed with the state on Jan. 30 indicates his 2018 income from Southern Bancorp totaled more than $12,500. The form gives two choices — whether the income was more than $1,000 or $12,500 — and does not ask for a specific sum.

Public university leaders “should know that public trust is paramount,” Alacbay said. “The real issue is, are the optics such that the public has any doubt that the institution is operating transparently.”

“Transparency engenders public confidence,” he added. “Whatever it takes to do that,” whether it’s putting a recusal in writing or taking other appropriate action, “it’s making it clear to the public that they are operating beyond reproach.”

Also speaking in general terms, Graham Sloan, director of the Arkansas Ethics Commission, referred to Arkansas Annotated Code 21-8-304.

It says in part: “No public official or state employee shall use or attempt to use his or her official position to secure special privileges or exemptions for himself or herself or his or her spouse, child, parents, or other persons standing in the first degree of relationship, or for those with whom he or she has a substantial financial relationship that are not available to others except as may be otherwise provided by law.”

To show a violation, Sloan said, “There would have to be some element of unfairness in the process,” such as circumventing the bidding process or “if there’s something irrelevant in that process and they’ve used their privilege to cause that business to be transferred.”