The University administration used a new loophole in state law – created by the University and submitted by its main legal counsel – to hire an Athletic Department consultant without the rigorous fairness standards that usually apply when public institutions hire outside agents, an Emerald investigation has discovered. Additionally, the contractor was working for the University without having signed his contract.
The consultation of Ted Leland, former Stanford University Athletic Director, became controversial after it became known that he only presented his findings orally to two University administrators, and hadn’t documented his findings, despite the contractual stipulations directing him to do so.
Leland’s contract falls under a state regulation, Oregon Administrative Rule 571-040-0100. That law, enacted less than a month before Leland’s contract was drafted, specifically provides the University an avenue to circumvent the standard procedure of sending out a Request For Proposals, the bidding procedure to find the best person for the job.
That process of soliciting multiple contractors with an RFP was previously used for any “Professional Services Contract” exceeding $5,000 according to the law, and was designed in part to prevent unethical favoritism.
Attorney Duane Bosworth, a board member of Open Oregon, a local organization promoting freedom of information, said the RFP process is primarily to ensure that taxpayers’ finances are being spent properly, but there’s a secondary role as well.
“One of their purposes is to make sure there’s no cronyism aspect or insider aspect to the hiring,” he said.
This rule was superseded by OAR 571-040-0100, which changed the trigger price from $5,000 to $50,000 and allowed the University to hire Leland without competition.
University Rules Coordinator Deb Eldredge said the University may award as many contracts as necessary to “contractors qualified to perform various types of services.” She said Frohnmayer selected Leland because of his qualifications as a former Pacific-10 Conference athletic director.
The University’s legal counsel Melinda Grier said the University uses the OAR exemption for a “small” contract if a particular person is especially qualified to do the work.
Portland attorney Greg Chaimov has plenty of experience dealing with government law, having served as the General Counsel for the legislature and worked for the state justice department. He said that he has personally never seen an oral report given without a written contract.
The raise in trigger price might be because RFPs can cost money too, Chaimov said.
“It takes a fair amount of work to put together an RFP. One could argue that the process would cost more than was worthwhile for a $5,000 contract,” he said.
RFPs level the playing field, Chaimov said.
“Folks paying can be assured that the process is being handled fairly and not through some good old boy network,” he said. “The more you are comfortable with how the government, or the public institution operates, the less you care about using an RFP.”
Chaimov said there is a possibility the University pushed the OAR through in order to hire Leland without using RFPs.
“It certainly wouldn’t surprise me that the need to hire a consultant necessitated the need to change the RFP (rules),” Chaimov said.
A controversial hire
To hear the University administration tell it, the contractual mishaps are nothing out of the ordinary.
Indeed, University President Dave Frohnmayer’s hiring of Ted Leland to review the University’s Athletic Department would normally not have caused the controversy that followed. But the inconsistencies surrounding the contract and the secrecy involved in the report resulted in questioning by local journalists and some University faculty, one of whom said Frohnmayer never consulted the University Senate on Leland’s hiring. Additionally, emeritus biology professor Frank Stahl asked Frohnmayer in a January Senate meeting why he did not require the written report.
The written report, which was stipulated in the contract, was released more than a month after reporters from The Register Guard asked Frohnmayer for a document reflecting what Leland found in his visit to campus. Leland’s report was full of grammatical errors and was a mere 3 1/2 pages long, at the cost of $17,250.
General Counsel Melinda Grier said the lack of a written report was not important.
“The purpose of this contract was to give the president and Bill Moos advice,” she said. “They were interested in the substance, not the form. What was key was getting the substance of his observations and perceptions and advice.”
Further examination of Leland’s contract, obtained by the Emerald through a public records request, revealed additional inconsistencies.
Leland’s contract was set to become effective Sept. 25, 2006, but neither Frances Dyke, Vice President of Finance and Administration, nor Leland signed the contract until Oct. 26, which means that Leland was already working at the University before he signed a contract. That month of leeway could have allowed the University to modify the contract as it saw fit.
Additionally, Leland’s contract called for delivery of findings no later than Oct. 31, but he did not confer with Frohnmayer and former University Athletic Director Bill Moos until November.
Grier said breaking deadlines in a contract, such as the one calling for a conference before November, is perfectly normal.
“You put those (dates) in and then things play out somewhat different,” she said. “It’s very frequent that as the contract is done the person may report that he needs more time. It’s more common to let the person go forward than to request it by a specific date.”
Grier said a contract being signed long after a hire begins work is a standard occurrence. She said that consultants are much more focused on getting the job done than on the intricacies of a contract. She said that a contract could “absolutely” undergo changes after the hire begins work.
Jack Johnson, Senior Assistant Attorney General at the University of Washington, agreed with Grier and said sometimes set deadlines are not met.
“It’s certainly not the preferred way to do things, but sometimes it does work out that way,” said Johnson.
Reviewing the contract revealed yet another questionable error in Leland’s report. Leland quotes the contract directly in his written report, stating he was to advise Frohnmayer and Moos “how the Department of Intercollegiate Athletics can best position the department for success over the next 10-15 years.” However, the contract actually asked Leland to advise Frohnmayer and Moos how the Department could achieve success over the next “5-10 years.”
Leland did not return several phone calls placed to his office during nearly two weeks. Moos also did not return phone calls.
Changing the law
The University must allow a notice time of 60 days before filing an OAR with the Secretary of State, Eldredge said. It is officially filed on the 15th of the month prior to enactment. This OAR was submitted June 1, 2006, filed August 15, and certified to be effective Sept. 1. Leland’s contract became effective 24 days later.
Frohnmayer said despite this reasonably tight chain of events, there is no connection between the OAR’s enactment and Leland’s hiring.
Norm Arkans, Executive Director of Media Relations and Communications at the University of Washington, said it has a similar law that was enacted several years ago. Arkans said it is used “with some frequency,” and recalled a particular instance in which Washington hired two individuals to review its athletic department: a former Division I athletic director and a former university president. The review was similar to the one conducted by Leland – the consultants met with and talked to people involved in the athletic department and gave a general reading of the department. Arkans said the contract
“wasn’t that large… under 25 grand.”
The difference between the two cases lies in the way the reviews were handled by the universities. Whereas Oregon kept the review generally under wraps – revealing it not even to the University Senate, according to a few University faculty – Washington made the review completely transparent. A faculty athletics committee was also involved.
“As a general principle I think transparency in almost all circumstances serves universities better,” Arkans said. “It builds public trust and confidence.”
Arkans noted, though, “situations differ from institution to institution.”
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