Audit reveals many potential ethics violations by Arkansas State University’s former chancellor

Former Arkansas State University Chancellor Dr. Tim Hudson may have violated Arkansas ethics laws during his tenure that ended Wednesday with his resignation.

ASU, under Hudson’s direction, hired a Spanish company to aid college students during study abroad trips to Lanjaron, Spain, a new internal audit reveals. The company, Multisense, was paid more than $250,000 from ASU during the last three years for these services. Multisense is owned Grupo Sense, and Hudson served on the company’s board, according to documents obtained by Talk Business & Politics.

Hudson may have used his position and influence to try and persuade several colleges to give a relative better financial offers for graduate school, and he even hired the son of a friend, the CEO of Grupo Sense, for a high paying job in the chancellor’s office. Hudson may have also failed to disclose paid trips to Spain, and other perks.

Email correspondence and other information gathered show that Hudson used his office to hide much of the relationship with Multisense from others from within the ASU system, the audit states.

The internal audit will be submitted to Arkansas Legislative Audit, and it will decide if Hudson committed potential criminal acts, ASU President Chuck Welch told Talk Business and Politics. ALA will decide if the findings are submitted to prosecutors, he said. An anonymous tipster started the entire audit process.

“I’m disappointed in the timing … but, I understand that things like this happen,” Welch said. “When I first learned of this, I told them (auditors) ‘I want you to do a purely independent review.’”

Administrators at ASU were still reeling Thursday after it was learned earlier this week that Hudson also encouraged the creation of a permanent director’s job for the studies abroad program, a position he planned to give to his wife, Dr. Deidra (Dee Dee) Hudson. When he discovered his wife wasn’t eligible because they are related, he stopped the job from being filled even though 14 applicants had applied in February.

Email between the Hudsons and Alfonzo Rubio, the owner of Multisense and the CEO of Grupo Sense, show there was a deep friendship between them that predated Tim Hudson’s employment with ASU in 2012, according to the audit. Hudson hired Rubio’s son, Pablo, to work as a special projects coordinator in the chancellor’s office earlier this year. No other candidates were considered for the position created by Hudson, and he paid his friend’s son $70,000, and gave him an ASU apartment to live in rent free, according to the documents. The agreement was largely kept in secret by Hudson.

Hudson began an email correspondence with a businessman in Spain in late October, 2015. He told this man that ASU might contract his company to handle the Spanish language program at the proposed ASU-Mexico campus that the university had partnered to build. As the email conversations unfold, Hudson mentions that he intends to hire Pablo Rubio to help develop the project in Mexico. He also encourages the businessman to meet with Pablo Rubio in Madrid, Spain.

“I would love to manage the Spanish centre in partnership with you,” the man emailed.

Hudson asked the man to meet with Pablo and his father to start preliminary discussions about the program. At one point, Hudson tells the man that some of the negotiations will be done in private.

“Also, as you know, you and I will negotiate privately any business arrangements that might develop,” he emailed the man.

Pablo Rubio resigned from that position in July. If Hudson received any financial windfall from his association with the Rubios it hasn’t been released.

Arkansas ethics laws require public paid supervisors to disclose any benefits or free gifts they may receive during their tenure. Hudson received at least two free trips to Spain he didn’t disclose on his ethics forms, according to the audit.

Hudson also used his position to negotiate with several different colleges to obtain tuition discounts for a relative. He sent numerous emails detailing competing offers, and he lobbied schools to send better offers to his relative. Using his office in this manner is a violation of state ethics laws, the audit determined.

ASU provost and vice chancellor for affairs Lynita Cooksey has been named interim chancellor. Cooksey will serve in that capacity for a short-time and another interim chancellor will be appointed in several weeks. A replacement will be selected in the spring, Welch said.

The studies abroad program was seriously mishandled while Deidra Hudson served as its part-time director, and that will change when a new, full-time director is installed Aug. 22, Welch said. The new director will have to establish polices, and practices that will curtail the problems in the future. These policy changes will be reviewed by the school’s legal council, he added.

Auditors determined that firmer policies are needed to prevent similar problems from occurring, and Welch said his administration will start that process. He also said many institutional policies were simply not followed, something that will not be tolerated in the future. This audit has brought to light issues that needed to be addressed, he added.

“The ASU System is not required to conduct internal audits, but the Board of Trustees and I feel strongly that this office serves an important role in our operations,” Welch said. “Most of our audits are initiated internally and not by anonymous complaints. We will continue to be vigilant in efforts to ensure state laws and university policies are being followed.”