Thursday, December 14, 2017

Many of USF's vendors are donors, too

One by one, a University of South Florida panel quizzed companies on how they would handle the construction of a $46.5 million campus in Lakeland.

Among questions on management style and subcontractors came one that had nothing to do with construction: What will you do to help USF raise money from donors?

One candidate boasted that his company had raised $20 million for a private school it built.

"So can I put you down for $20 million?" a USF panel member asked.

Everybody laughed, but the message during the 2009 interviews, which USF taped and archived online, was unmistakable: Companies vying for the job would be expected to do more than just build.

A year later, the company that won the contract, Stockholm-based Skanska, donated $1 million to the USF Foundation. It had cited as one of its qualifications its willingness to be a "philanthropic partner."

A Skanska spokeswoman said the gift was simply a show of support for USF, where the company has done work for more than a decade. But the widespread practice of university contractors donating to their clients is coming under increasing scrutiny.

State Sen. JD Alexander, a Republican from Polk County, publicly questioned the Skanska donation and launched a statewide hunt to find similar situations at Florida's other public universities.

Since then, USF officials have defended their hiring of Skanska, saying it had nothing to do with the donation.

USF spokeswoman Lara Wade-Martinez said fundraising and contract evaluations are strictly separated, with donations handled by USF's foundation and contracts awarded by committees after a public review.

But, as the presentations on the new USF Polytechnic campus showed, the dividing line is not always clear. Bidders were not asked directly for donations. But they are definitely expected to help raise money from others.

Matthew Fajack, chief financial officer at the University of Florida, said his institution would never have asked potential contractors about their fundraising abilities. And Jane Robbins, who studies conflict of interest issues in academia, said the topic should not have come up during USF's evaluations.

"This goes to the heart of institutional integrity — whether what you say matches what you really do," said Robbins, a senior lecturer at the University of Arizona's McGuire Center for Entrepreneurship. "Those million-dollar contributions are short-term support from people who want something. What universities risk is losing the long-term support of the public."

• • •

Alexander, who heads the powerful Senate budget committee, targeted the Skanska gift last fall after leaders of the university system delayed his aggressive campaign to split the Lakeland campus from USF.

The senator questioned USF's decision to use the gift to equip the music department with Steinway pianos. "I'm sure that's a wonderful thing," Alexander told the Tampa Bay Times, "but I'm not sure how proper that is."

Alexander then demanded that each of the state's 11 universities produce a laundry list of documents, including the names of companies that are donors and also do business with the institution.

Earlier this month most universities provided lists of vendors and donors but said they do not keep track of how the lists overlapped. Alexander did not respond to calls for a comment on the data.

The Times reviewed USF's donor lists and compared them with thousands of companies and individuals that perform work for the school. The review found at least 75 companies that both work for and donate to USF. Among them are 23 vendors that over time have given more than $1 million each.

University foundations do not have to divulge the size of a gift or the timing of a donation. Donors can also ask for their names to be kept secret. That lack of disclosure means conflicts of interest may never come to light.

At least 10 donors have anonymously pledged more than $1 million for USF's ongoing capital campaign. Wade-Martinez, the USF spokeswoman, said the school does not know if those donors also have done business with the university, and researching the names would violate the foundation's policies.

Robbins, the professor from Arizona, said universities are starting to get more public scrutiny, but they are still not transparent.

"Quid pro quo, which is what we are talking about here, is very difficult to prove," she said. "And procedures for evaluating and enforcing ethics policies at universities are notoriously weak."

Some states have tried to avoid conflicts. Following a scandal, Connecticut briefly banned state agencies and universities from taking gifts from vendors. In 2007, the law was repealed after college donations plummeted.

Georgia lawmakers passed a measure in 2005 that requires universities to disclose donor names if they accept more than $10,000 of work within three years of the gift.

• • •

Mark House, whose company was a runnerup on the USF Poly contract, said he was surprised by the fundraising question back in 2009.

It came from Bryan Mehaffey, a USF technology expert and review panel member. Mehaffey asked several companies about their willingness to help with fundraising, video recordings show.

Asked why he raised the issue, Mehaffey sent the Times an email saying, "I am not involved in fundraising but was asked to evaluate the willingness of selected contractors to assist us in our fundraising efforts." He did not say who made the request.

"It was kind of odd," said House, managing director of the Beck Group, of the question. "But we just said we'd be glad to participate."

Even so, House said he doesn't think Beck lost the bid because of its competitor's donation.

After quizzing the contractors on how they might raise money for the project, the judges wrote evaluations. Beck and another finalist were rated highly for their "creative fundraising" and "fundraising opportunities." Meanwhile, they wrote that they were concerned about Skanska's "level of commitment for fundraising."

Jessica Murray, a spokeswoman for Skanska's southeastern offices, said the contractor regularly supports local institutions, though its pledge of $1 million over 10 years was its first large gift to USF.

Since 2003, Skanska has bid on a dozen USF projects. It won half of them, with total estimated value of nearly $167 million.

The company was USF's largest vendor in 2010, earning $42.7 million for several construction projects. Skanska's U.S. division had revenue of $4.8 billion that year.

Murray said criticism of its USF donation may make Skanska think twice before giving in the future.

"On one hand, we're supposed to do the right thing for our communities, but when we do the right thing, and give as we're supposed to do, it becomes a witch hunt," Murray said.

"It's bad if you do, bad if you don't."

Times researcher Carolyn Edds contributed to this report. Kris Hundley can be reached at [email protected] Kim Wilmath can be reached at [email protected]

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