LITTLE ROCK Former University of Central Arkansas President Lu Hardin pleaded guilty Monday to federal charges of wire fraud and money laundering related to a scheme to deceive the school's board of trustees into giving him nearly $200,000.
Hardin entered guilty pleas before U.S. District Judge James Moody shortly after 10 a.m. He repeatedly told the judge he was "taking full responsibility" for his actions, which occurred months before he resigned from UCA in 2008. The federal investigation grew out of reporting by the Arkansas Democrat-Gazette.
Hardin did not answer questions as he left the courtroom alongside his wife and his attorney, Chuck Banks.
Assistant U.S. Attorney Pat Harris said in court that Hardin's criminal activity began in April 2008 when he forged a letter to the board of trustees suggesting it was legal for a $300,000 deferred compensation package to be paid to Hardin immediately. The letter purported to be signed by UCA officials, including its vice president and chief counsel, but it was actually written by Hardin without their knowledge.
"The letter was false," Harris said. "Mr. Hardin knew it was false ... He intended to deceive the board of trustees."
The board approved the request and Hardin received $198,000 of the bonus, which was to be paid 5 years after the compensation package was set in 2005. Harris said Hardin needed the money to pay off "pressing financial debts."
Hardin resigned effective Sept. 16, 2008, after controversy erupted over the awarding of the bonus.
Hardin had been working as the president of Palm Beach Atlantic University, but he abruptly resigned that position on Friday.
Sentencing will be done at a later date. The wire fraud count carries a sentence of up to 20 years in prison while the money laundering conviction is punishable by up to 10 years in prison. Each carries a fine of up to $250,000.
Moody advised Hardin and Banks that he would look at federal sentencing guidelines in determining the sentence, but noted they are not mandatory. Hardin told the judge he and his attorney had considered the guidelines, which offer a range of sentencing options based on numerous factors.
"We have in detail looked at the sentencing guidelines and fully understand downward departure to be a possibility," Hardin said, suggesting some of the factors could produce a lighter sentence. "... We've analyzed this in detail."
Moody said there would be no restitution ordered because Hardin has already paid the money back. Hardin said during the proceeding that it was repaid "within several weeks of the loss."
UCA board Chairman Scott Roussel said Monday: “Our current administration has made great strides in creating a stronger, more accountable and transparent university,” “We hope today’s news brings to a close that chapter in UCA’s history and we have moved forward as a university.”
Hardin was a Democratic state senator who ran unsuccessfully ran for his party’s nomination for U.S. Senate in 1996. That December, Republican Gov. Mike Huckabee named him interim head of the Arkansas Higher Education Department, and the following April the interim tag was dropped.
Hardin, who later switched allegiances to the Republican Party, was named president of UCA in 2002 with a strong recommendation from Huckabee.
Huckabee said Monday he still considered Hardin a friend.
“Of course I’m disappointed by his actions and saddened for Lu and his family. I’m sure there is a long line of people who will rain condemnation on him, but I’ve always preferred shorter lines. So I’ll form one for his real friends to still love him, pray for him and stand with him when he needs us the most,” Huckabee said.
Hardin, who was treated for eye cancer while at UCA, faced criticism from faculty who were angry he had informed the board his deferred compensation package did not have to be voted on in public. Hardin put the information in a memo bearing the typed names of three university vice presidents.
At the time, Hardin said the agreement should have been discussed in public.
Gov. Mike Beebe said he was taken aback by Hardin’s fall.
“It’s sad for everybody involved that he got himself into that position,” Beebe said. “I always thought he would never even entertain making up a document or doing anything like what apparently he’s admitted he’s done.”
Read tomorrow's Arkansas Democrat-Gazette for full details.
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Information for this article was contributed by The Associated Press