Flag thrown on 2 Arkansas State University stadium deals

Contracts mis-signed, will be revised, spokesman says

The Red Wolves Foundation is managing a $29 million expansion of the Arkansas State University football stadium, shown here in an artist’s conception.
The Red Wolves Foundation is managing a $29 million expansion of the Arkansas State University football stadium, shown here in an artist’s conception.

Two contracts for the Arkansas State University football stadium expansion will be revised after Athletics Director Terry Mohajir signed agreements on behalf of the university's athletics department rather than on behalf of a supporting nonprofit foundation, a spokesman said.

The Red Wolves Foundation is paying for a $29 million expansion to the university's football stadium.

ASU's board of trustees approved a 20-year lease agreement last year that gave the foundation authority to undertake the project in exchange for $100 a year in rent for the stadium.

Mohajir "mistakenly used Arkansas State University as a party" when signing two contracts, ASU System spokesman Jeff Hankins said after the Arkansas Democrat-Gazette reviewed the documents and inquired. "This technicality is being addressed with the vendor."

The deals, for lockers and interior design, are worth a combined $1.2 million. The contract opportunities were not advertised because the foundation will use donations -- rather than taxpayer or university revenue -- to pay the bills, Hankins said.

"As a private entity using private funds, the [Red Wolves Foundation] can choose its contractors," Hankins said, adding: "The university is not bound by these agreements and is not a guarantor of payments not made by RWF for any vendor."

Hankins did not specify, when asked repeatedly, what it would take to change the contracts. He said the foundation indicated that it "would be remedied immediately."

Questions posed to others about whether Arkansas procurement laws should apply to contracts signed on behalf of the university, even if private money is used, were difficult to answer.

The Arkansas Department of Finance and Administration hasn't had oversight on construction contracts at higher-education institutions since a law change in 2001, a spokesman said. The spokesman, Scott Hardin, referred questions to the Arkansas Legislative Council and the state Department of Higher Education.

Marty Garrity, a staff member with the council, said she was not sure what laws would or would not apply in this case. The Department of Higher Education did not immediately respond to an email seeking comment Wednesday afternoon.

The Red Wolves Foundation provided copies of four stadium-expansion contracts last week in response to an Arkansas Freedom of Information Act request.

The disclosure of the mis-signed contracts comes as other nonprofit foundations that support public agencies, such as the Razorback Foundation, decline to fulfill requests for similar records on the grounds that they are not publicly funded or governed by public bodies.

"While the Foundation is supported by private funds and has a governance separate and distinct from ASU, our client has determined, in a spirit of cooperation, to provide the attached documents in this instance," Robert Jones, who works as outside counsel for the foundation, said in an email providing the documents.

Nonprofit foundations throughout the state have undertaken multimillion-dollar capital projects on behalf of public agencies that they are organized to support. Foundations that support public universities consider themselves private and not subject to the same strict procurement laws as public agencies.

The Democrat-Gazette began reviewing the Red Wolves Foundation's contracts for the ASU project after ASU System President Chuck Welch apologized to a wealthy university booster for how the bid process was handled for a contract to install televisions and speakers in the stadium expansion. In a text message, Welch told the booster, Mark Fowler, he was "embarrassed and deeply sorry."

Fowler said foundation and ASU officials misled him during the bidding process, and he vowed to stop contributing to the university. Adam Haukap, foundation executive director, and the foundation's board of directors said the bid process was handled fairly.

Mohajir's authority to sign contracts on the foundation's behalf is granted in the foundation's bylaws "in the interest of NCAA institutional control requirements," said Hankins, who referred a request for a copy of the bylaws to the foundation. An open-records request filed Tuesday with the foundation has not yet been fulfilled.

Robert Steinbuch, a University of Arkansas at Little Rock law professor and Arkansas Freedom of Information Act textbook author, referred to an "open and notorious" blurring of identities when the foundation says that the "other side can sign our contracts."

"The question is, 'Who is the actor involved here?'" Steinbuch said. "Is it the university or some private entity? It seems fairly clear that this overall activity of building these facilities are university activities. It strikes me that those involved in these buildings should be subject to transparency laws and procurement laws for state entities."

The expansion "will not be a university facility," Hankins said, citing the lease agreement between the university and the foundation for the stadium project.

Haukap signed two of four stadium-expansion contracts examined by the newspaper. Haukap did not respond to a voice mail seeking comment Wednesday evening.

Mohajir signed a $459,000 contract with Texas-based Longhorn Locker Co. LLC for football-player lockers in the stadium expansion. The contract, dated Aug. 9, 2017, lists "Arkansas State Athletics" as the buyer.

Below the athletic director's signature on the contract is a note that it is "pending approval" from ASU's board of trustees.

Trustees approved the lease agreement -- effectively authorizing the foundation to carry out the expansion project -- two months later.

"This is confirmation that you have been selected as our exclusive locker provider," the note says.

Several other companies submitted proposals for the lockers contract, according to records provided by the university in response to an open-records request.

Mohajir also signed an $810,000 agreement with Dimensional Innovations, a Kansas company, to build and install graphics, display cases and other decor. Mohajir signed above a line marked for "Arkansas State University." It's dated Jan. 25, 2018.

Hankins denied a request to interview Mohajir.

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Democrat-Gazette file photo

Arkansas State Director of Athletics Terry Mohajir is shown in this file photo.

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Special to the Democrat-Gazette

Part of Arkansas State’s $29 million football stadium expansion includes waterfalls and special seating in the north end zone, as shown in this artist’s rendering. Two contracts for the expansion will be revised after Athletic Director Terry Mohajir mistakenly signed them on behalf of ASU instead of the Red Wolves Foundation, which is paying for the project.

A Section on 03/29/2018

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