Lu Hardin, the former president of the University of Central Arkansas, pleaded guilty in federal court in Little Rock this morning to two federal felony charges — wire fraud and money laundering.
He appeared before Judge James Moody.
UPDATE: I asked if today's charges signaled the end of the investigation of UCA finances during the Hardin era. The prepared response from U.S. Attorney Chris Thyer:
“Today’s plea signals an end into our office’s investigation of Mr. Hardin. We have no comment on the existence or extent of any other investigations as they may relate to UCA finances.”
Also, a request to the State Police for its records on the Hardin investigation was denied. It views its joint investigation with the FBI at UCA as "ongoing."
As expected, the charges related to a scheme Hardin devised to get a 2005 $300,000 deferred compensation package paid out early, in spring of 2008. As earlier reporting has revealed, Hardin persuaded the Board of Trustees to pay him early in part on the strength of a supporting document he'd dictated to his secretary over the names of three top UCA officials: vice president for administration Jack Gillean, executive vice president Barbara Anderson, and Vice President for finance Paul McLendon. Anderson, McLendon and Gillean said they had nothing to do with the document. He also dictated a memo that was meant to appear that it came from the chairman of the board of trustees on release of $300,000 to Hardin. Prosecutor Pat Harris said Hardin instructed his secretary to destroy evidence that showed he'd prepared the notes. In addition to being charged for the scheme to defraud, Hardin was charged with using interstate commerce to sending three cashier checks totaling $47,500 to pay debts.
Here is a copy of the statement of information prepared by prosecutors, which outlines the charges. Hardin waived a formal indictment by pleading guilty. Here, too, is the U.S. attorney's news release.
Harris said Hardin used the money to pay off debt in another state. He didn't reveal further details, but our sources have said Hardin was believed to have significant debts from gambling at casinos in Tunica, Miss. Harris said that information about the nature of the debts would likely be revealed at sentencing. But the information released noted that Hardin's drawdown of retirement funds and borrowing from banks hadn't been sufficient to reduce the larger debt.
No sentencing date has been set. Hardin was ordered to surrender his passport, but was released. The charges carry maximum penalties of 20 and 10 years, respectively, and $250,000 fines. Hardin repaid the bonus (he got $198,000 after UCA withheld taxes) and eventually negotiated a severance deal to resign from UCA, so restitution won't be part of the final sentence. Hardin's attorney said he hoped for a fair sentence and Hardin said he hoped various factors, including his guilty plea, could result ina downward departure in the eventual sentencing.
Since no indictment was filed, it will be time before we can fill in details of the sad fall of a man whose personal salesmanship created a huge buzz and growth at UCA, but ended in a hail of controversy. In the years since Hardin's departure, other accounting questions have arisen about methods used to build student enrollment, among other issues.
Hardin entered the courthouse at 9:25 a.m. this morning. He walked hand-in-hand with his wife Mary and was accompanied by his son Scooter and his lawyer, Chuck Banks.
He resigned abruptly Friday as president of Palm Beach Atlantic University. He had told friends earlier that he had assured Palm Beach officials that if anything untoward developed from the Arkansas investigation, he would resign immediately. He became president of the church-related Florida school in 2009.
The federal Grand Jury investigation had also tracked a trail of public and private money used to pay the UCA football coach in excess of the state salary cap, but that wasn't mentioned in the morning's proceedings.
Sources have said for months that Hardin's desire for higher pay was linked to his personal financial situation. He was known, for example, as a player of high-dollar slot machines at Tunica casinos, where Arkansans had seen him on occasion, sometimes wearing sunglasses. Hardin, whose professed religious roots had been evidenced as a state senator when he crafted legislation making it harder to vote counties wet for alcohol sales, reportedly told friends that he didn't view slots as gambling, but a form of entertainment. Hardin ran unsuccessfully for U.S. Senate as a Democrat, then changed to the Republican party and became head of the Higher Education Department under Gov. Mike Huckabee. He continued to harbor political ambitions, aiming for a race for governor or senator before the UCA situation blew up. His final days at UCA were further complicated by his treatment for cancer of the eye.