SIU officials deny corruption allegations

By Allison Petty, Staff Reporter

SIU Board of Trustees Chairman Roger Tedrick called for a revision of the university’s conflict-of-interest policy after allegations surfaced that he may be in violation of it.

A report by the Chicago Tribune published Saturday revealed Tedrick, who owns Tedrick Insurance based in Mt. Vernon, sold insurance to construction companies that, in nearly 40 instances, won business with the university.

A separate report by the Southern Illinoisan published Sunday expanded on previous allegations that SIU President Glenn Poshard and his son had violated similar conflict-of-interest policies.

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According to the Tribune report, Tedrick voted to approve at least 20 of the contracts, which also included contracts for Saluki Way, the university’s $83 million campus overhaul project that will build a new football stadium and renovate SIU Arena.

Tedrick’s company acted as broker of liability insurance for 16 construction firms approved by the board since 2004, according to documents obtained from Laraine Wright, a retired university employee who addressed the board during its February meeting with similar allegations.

What is an indirect benefit?

Essentially, Tedrick said his company acts as a middleman between a larger insurance company and the contractors. Tedrick’s company receives a commission of between 3.5 and 5 percent for its services, he said in an interview with the DAILY EGYPTIAN Friday.

Tedrick said he immediately consulted SIU general counsel upon learning of Wright’s allegations.

He said Jerry Blakemore, legal counsel for the university, performed an internal investigation and found Tedrick nor any other board member had previously influenced any contract awarded by the board.

Blakemore hired a firm from Springfield that specializes in ethics law to investigate the matter further, Tedrick said.

‘They have given (Blakemore) a preliminary report that says there was no conflict of interest,’ Tedrick said. ‘It said this is an indirect interest that I have. There is no law that says I can’t have this type of indirect situation.”

But according to the Charter of the SIU Board of Trustees, no member is allowed to even indirectly benefit from such contracts.

“Nor shall any member of the Board be directly or indirectly interested in any contract made by the Board,” the charter says.

Tedrick said an “indirect conflict of interest” has never been defined, which makes it hard to enforce. He said by law, there is no violation.

‘What is indirect benefit?’ he said. ‘I wouldn’t be here in southern Illinois without the university. … Is that an indirect benefit? Where does it stop?’

Tedrick said the board would likely approve a revised conflict-of-interest policy – one that forces board members to remove themselves from the voting process if they are directly or indirectly interested a specific contract – at its next meeting May 7.

The policy would require the board to list every instance of direct or indirect conflict of interest and annually report them to the governor, Illinois Senate president and minority leader, said SIU spokesman Dave Gross.

Increase in construction projects

Tedrick said since former Gov. Rod Blagojevich appointed him to the board in 2004, his company has had a boost in business. He attributed the spike directly to the number of construction projects the university has approved.

Many of those contracts stem from the Saluki Way project, which Tedrick voted to approve in September 2006.

Among the 34 accusations of conflict of interest were two instances between Tedrick Insurance and Holland Construction, one of two construction companies that oversee Saluki Way progress.

Three other contracts – contracts where Tedrick Insurance acted as a broker for liability insurance for Litton Enterprises, Hock Mechanical and Clinton Electric – were also tied to Saluki Way.

Gross said because Tedrick acted as a broker, and not a direct insurer, there is no wrongdoing.

‘Tedrick has no interest in those contracts. He insures his customers and his customers have the interest,’ Gross said.

‘ ‘What we would like for everyone to understand is that we recognize there is an appearance of conflict of interest,’ he said. ‘And that is what we are looking at: Can we disclose possible interests sooner?’

Gross said he expects the university to respond to the reports in a statement this week.

Board-approved construction contracts go through an extensive bidding process, which requires the bids to be sealed and revealed in an open meeting. Once the bid is opened, the lowest is selected for approval from the board.

Tedrick said he is not part of the process until the contract comes before the board.

In some cases, Tedrick said, more than one of his clients have competed for the same job.

According to the Tribune, Tedrick’s clients were not awarded university projects 25 times.

‘(SIU) didn’t have a capital bill for a long time so we didn’t have any construction; all we had was repair,’ he said.

Arthur Agency

Poshard’s son, Dennis Poshard, said his father’s position did not result in his company winning more than $100,000 worth of business with the university.

Dennis Poshard said he has been involved with Arthur Agency, a Carbondale-based marketing company, since May 2005, and became its owner in December of the same year. He became a minority owner in 2007.

The Southern Illinoisan reported Sunday that Arthur Agency received $138,000 in contracts since the elder Poshard took office in 2005. The newspaper said its investigation began after Wright raised questions about Arthur Agency’s connection with the Poshards and SIU.

A three-year contract with Connect SI, an organization that works to expand broadband Internet access in southern Illinois, accounts for $100,000 of that money.

Dennis Poshard said he had been involved with the Connect SI project before his company bid on it. The other bidder was a company based in New York, the newspaper reported. The university is a parent partner of Connect SI, and the Daily Egyptian reported in 2007 that Glenn Poshard had a large role in the project’s development.

Dennis Poshard said the university accounts for roughly 5 percent of Arthur Agency’s business. He said his father’s position had, if anything, hurt his ability to do business with the university because he now faces additional regulations in order to bid on SIU contracts.

‘I mean, think about it. Would you want to be involved with a business with this potential scrutiny hanging around out there?’ he said.

Pay-to-play scandal

The Tribune report came just one day after the Illinois Reform Commission visited campus to hold its final meeting before revealing its recommendations aimed at fixing a corrupt state government.

Among the commission’s primary concerns are pay-to-play standards, which have also been associated with Tedrick.

Tedrick, along with fellow board members John Simmons and Bill Bonan II, gave money to Blagojevich, causing Wright and others to speculate they paid for board positions.

According to the Illinois State Board of Elections, Tedrick donated $26,000 to Blagojevich, including $5,000 in the weeks leading up to his appointment as chairman.

Simmons, meanwhile, donated $30,000 to Blagojevich, while Bonan’s family donated more than $250,000.

Tedrick said he donated to Blagojevich after Tedrick was convinced he was dedicated to helping southern Illinois.

He said he was appointed to the board because of his strong connection to the university.

“I graduated from SIU and I’ve tried to give back,’ Tedrick said. ‘I’m very philanthropic towards the university for a long time. I have a real interest. Am I proud that I gave (to Blagojevich)? No. I wish I hadn’t ever given him anything because he is a joke.”

Allison Petty contributed to this report.

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