A University of Central Arkansas trustee failed to report that another trustee guaranteed his business loan when he filed a required financial statement with the Arkansas Secretary of State’s office this year.
That same trustee voted for projects that could benefit the person who guaranteed his loan, UCA records show.
In early spring 2011, Vice Chairman Victor Green asked fellow trustee Rush Harding to guarantee a loan, both said. Green obtained a business loan of more than $5,000 for a nonprofit venture in Dallas, Texas, but he did not report Harding as guaranteeing the loan, as required by law.
Green, who is out of state traveling, said Thursday the omission was unintentional. He plans to file an amendment by Friday to fix the issue, he said.
"I hate that my failure to disclose, or my failure to put that on my financial statement, has brought us here," Green said Thursday. "It was truly an oversight on my part, (And) not with the intention of trying to hide anything."
Harding called Green his friend and said he had no doubt not disclosing the loan is an "oversight." Green declined to say the exact amount of the loan from First Security Bank. Harding is not required to report to the state that he guaranteed Green’s loan.
The loan is not directly tied to UCA, spokesman Jeff Pitchford said. UCA officials contacted Green to draw his attention to the omission, according to a news release Thursday. That same release was sent to UCA employees.
"The loan had nothing to do with UCA in any way," Pitchford said. "They are both just trustees. We’re trying to be as open and as transparent as possible."
Harding, who is a longtime board member, is involved with banks and businesses that serve UCA, according to his Statement of Financial Interest at the Secretary of State office. That includes Crews and Associates, which handles bonds for the university.
Depending on the circumstances, Green voting on projects that could benefit Harding’s business may be a conflict of interest under Arkansas Code 21-8-304. That law reads, in part, "No public servant shall use or attempt to use his or her official position to secure special privileges or exemptions for himself ... 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."
UCA provided documents showing Green voted several times for contracts that benefit banks and companies tied to Harding.
In May 2011, the Board of Trustees approved Crews and Associates to do underwriting services for UCA for $4.65 per $1,000 through at least next June, according to UCA documents. Crews and Associates was originally approved for underwriting services in 2009, the year before Green was appointed to the board in 2010, according to UCA.
But since early 2011, UCA has investigated using millions in bonds for buying an apartment complex and extending a building.
In September 2011, Green was among trustees who voted to approve a resolution to authorize "the execution and delivery of a trust indenture securing bonds" on a multi-million dollar project to expand the Health Physical Education and Recreation Center. According to minutes from UCA, Green made the motion to adopt the resolution while Harding abstained from voting.
The state approved the project in November 2011, and this past February, the board approved a resolution to authorize the issuance of bonds not to exceed $15.5 million, UCA documents show.
UCA plans to break ground on the major expansion next year.
Green also voted to renew contracts in May 2012 for vendors that included First Security Bank and Centennial Bank, both of which are listed on Harding’s financial statement for the state. Harding recused himself from the vote, according to UCA documents.
This past June, Green also supported a request to move forward with getting roughly $12 million in a bond issue to buy Bear Village Apartments from the university’s Foundation. In September, he supported a resolution to acquire about $12.5 million in bonds for the purchase. Again, Harding abstained from both votes.
Green said in hindsight, he should have abstained from voting but pointed out the projects were supported by other trustees and would have passed without his vote.
The state law is broad and doesn’t say when a trustee should abstain from voting, said Graham Sloan, director of the Arkansas Ethics Commission. Sloan said he couldn’t comment on Green’s situation specifically but said the law — particularly covering a "substantial financial relationship" — may apply.
"Whether casting a vote would constitute a violation ... would depend on the facts of the circumstances of the particular situation," Sloan said.
Green said he plans to be more careful about his financial statement to the state, and he will recuse himself from voting on any of Harding’s businesses in the future for the sake of appearances, he said.
"Let’s make sure that what we are doing is all above board," Green said. "I would rather err on the side of caution."