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Members of state university oversight board criticized for connection to $14M in contracts

7/17/2012 | Construction Blog, Real Estate Blog

Businesspeople can sometimes get into legal trouble, or at least face ethical criticism, when an appearance of impropriety arises. For those involved in business development, this can arise from a number of situations.

Such a situation recently arose with respect to two members of the State System of Higher Education Board of Governors, who have recently come under fire after it became known that companies owned by them won nearly $14 million in business from various state universities over the past five years. The contracts rage from construction contracts, to landscaping projects to security contracts.

While the state system board doesn’t actually solicit or vote on any of the contracts, it does manage the operations at all of the schools overseen by the board. According to one of the board members, his company went through the bidding process without him, so that he didn’t actually oversee any of the contracts.

But that hasn’t stopped the criticism of those who’ve wondered whether inside information helped the board members’ companies put together requests for bids, which can be highly competitive. The concern is that those who are politically connected tend to get the desirable contracts.

Some have suggested that, although there may not have been any legal infractions, the behavior pushed ethical boundaries. The Association of Governing Boards of Universities and Colleges adopted a policy in January which requires officials and employees to avoid not only actual conflicts of interest, but also any activity or situation that presents the appearance of conflict.

Others, however, say that no rules were broken, that the contracts were awarded by individual schools and that the two board members had nothing to do with the process, and that the state Attorney General Office reviewed the final contracts.

Businesspeople involved in these types of situations do well to contact an attorney for legal and ethical guidance, particularly before any conflict arises.

Source:, “Pa. university board members grab $14M in contracts,” Amanda Dolasinski & Richard Gazarik, June 30, 3012