Southern University accused of ‘insider trading’ for lucrative work contracts

Louisiana public university, Southern University and A&M College, is embroiled in an “insider trading” scandal after a local newspaper uncovered a pattern of cronyism and nepotism from university management when awarding contracts.

The WBRZ Investigative Unit found staff didn’t follow their own procurement procedures, and a troubling number of contracts were awarded to friends and family of the hiring officials. They also uncovered suspicious contracts for repair works, ten years after Hurricane Gustav purportedly caused the damage.

“It’s hard for me to imagine that the work that the contract says was done was done ten years after Gustav,” Tulane Law Professor Joel Friedman told WBRZ.

“We have a lot of experience here with hurricanes, including Katrina, and we know how long it takes to repair the work. It doesn’t take ten years to let the contract out.”

The investigative team obtained contracts showing over US$130,000 worth of work was awarded to the wife of a Southern University employee.

Over US$250,000 worth of contracts were found to have been awarded to friends of hiring officials.

As a public institution, Southern University is governed by state ethics laws. These prohibit contracts from the public servant’s agency being awarded to the immediate family of any public employees. This includes spouses, as has been uncovered at Southern.

The University has continued to defend itself in the face of the allegations, claiming they adhered to all procedures and requirements throughout the procurement process.

WBRZ disputes this, however, saying the university received only written quotes in many cases of awarded tenders. This is in conflict with the guidelines for public works projects which clearly state it should get three sealed bids for work over US$25,000.

“It smacks of insider trading, preferential treatment for friends, relatives…and the relatives part is prohibited by law, they’ve got to stop doing that,” Friedman said.

According to WBRZ, the State Office of Risk Management has been alerted to the findings and are looking into it. A spokesperson said they were particularly concerned with why contracts were awarded for repairs over ten years after Hurricane Gustav hit the state.