DeKALB – A state investigation into hiring practices at Northern Illinois University has found that NIU officials hired at least five people as though they were part-time instructors and paid them more than $1 million combined over a roughly two-year period.
A 56-page report by the Office of the Executive Inspector General concludes that NIU President Doug Baker mismanaged the university by endorsing the hiring scheme, which greatly benefited one of his personal friends. The investigation found that starting when Baker took office in June 2013, university officials, under orders from Baker, improperly classified multiple high-paying consulting positions as affiliate employees to skirt state rules requiring competitive bidding.
"Over a nearly two-year period after President Baker took office, NIU administrators committed a pattern of circumventing procurement requirements and violating employment policies and rules," the report reads, "largely in an effort to meet President Baker's directives to select high-paid consultants (one of whom was a friend), and pay for their travel and lodging, without restrictions."
Under Illinois Procurement Code, state contracts for professional services by an independent contractor must be awarded using a competitive request for proposal process. NIU, therefore, is generally required to bid out professional services by independent contractors for $20,000 or more.
The report, delivered to NIU's Board of Trustees in August 2016, identified five improperly classified employees: Ron Walters, who was paid $463,125; Nancy Suttenfield, who was paid $425,041; Ken Wilson, who was paid $135,963; Magaly Rodriguez, who was paid $85,031; and William Pfeiffer, who was paid $23,516.
NIU’s written policies and procedures had described affiliate employees as individuals “who teach an off-campus extension class (typically for non-credit for the university on an occasional basis” and whose appointments are “always made on a part-time, 10 percent basis.” None of the five employees taught classes at NIU and all worked far more than a few hours a week.
Baker, however, said in a statement following the release of the report that once he was made aware of the OEIG’s complaint, he worked with the board to make several policy revisions on hiring and compensation, one of which was the elimination of the affiliate employee classification.
NIU recently announced layoffs and deferred maintenance in order to combat a projected $35 million shortfall created by lack of state funding. NIU has paid $189,145.46 for outside counsel for Baker during the OEIG's investigation.
Although the report recommended that the board of trustees take “appropriate action” on Baker, it did not suggest any disciplinary action, such as suspension or dismissal.
Board of Trustees Chairman John Butler said in a statement that the board believes the measures taken in the past two years in response to the investigation have addressed the OEIG’s concerns.
“On the basis of the broad and ongoing governance review, and acknowledging our respect for OEIG’s process, the NIU Board has sufficient reasons to believe corrective actions already taken suitably address the conduct investigated by the OEIG,” Butler said in the statement.
Baker wanted friend hired
The report details an interaction between Baker and then-Vice President of Administration Steven Cunningham, in which Baker attempted to hire his friend, Ron Walters, as a consultant.
Cunningham told Baker the Illinois Procurement Code limited his ability to pay Walters more than $20,000 as a consultant but was advised by Baker to "find a way" to bring him in as an employee with "maximum flexibility," according to the report.
“According to Mr. Cunningham, President Baker showed a ‘high degree’ of dissatisfaction with the procurement code and the civil service system, and said that when (Cunningham) described the requirements and limitations of each, it had a material effect on his working relationship with President Baker,” the report states.
Walters’ appointment was extended multiple times, and he and Baker worked very closely to craft a campus revisioning plan called "Bold Futures."
During his time as a consultant, Walters received more than $463,000 in compensation, plus another $35,000 in inappropriate travel and lodging benefits, the report shows. In 2014, he was the third-highest-paid employee at NIU behind football coach Rod Carey and Baker, and he stayed free in the penthouse at the Holmes Student Center.
Cunningham, however, said in a public response through his lawyers that he "vehemently" refutes and denies the report's findings. Sergio E. Acosta and Vaishali S. Rao of Hinshaw and Culbertson LLP, Cunningham released a public response stating that, while Cunningham had reservations about Walters’ and Suttenfield’s appointments, he complied with Baker’s directives in a manner consistent with the law and NIU policy.
“Far from circumventing the procurement code and NIU policies, Dr. Cunningham made the best choices possible at the direction of a president who insisted on operating in crisis mode,” the response reads. “Contrary to the report’s allegations and inferences, career NIU staff like Dr. Cunningham did put up resistance to certain of President Baker’s directives, described limitations to him, and attempted to counsel him into appropriate decisions.”
Cunningham was told in February 2014 that his employment with the university was to be terminated the following year.
After Walters was hired as an affiliate employee, others followed.
According to an NIU Personnel Action Form, Nancy Suttenfield was appointed to work at NIU as an affiliate from November 2013 through June 2014. Rather than an occasional part-time teacher, she acted as an interim chief financial officer, working full time but never teaching a class. Her appointment was extended three times, and she was paid more than $425,000 over 15 months, making her the fourth-highest-paid NIU employee in 2014.
Human resources representative Celeste Latham argued to Cunningham that the affiliate classification was becoming "perpetual default of employment category," but was advised by him to hire Ken Wilson as an adviser, according to the report. Due to the lack of instruction Wilson provided, Latham said he was commonly referred to as the "consultant’s consultant.”
Wilson took up residence at Grant Tower A in 2014 and lived there for about a year.
A memo to Wilson dated June 2014 shows that several women filed an affirmative action complaint against him alleging inappropriate behavior that could be considered sexual harassment, according to a report by Edgar County Watchdogs.
Baker told investigators he did not know Wilson was hired using the affiliate employee classification until after he was hired, nor did he know that Wilson was living in an NIU dormitory without charge until early 2015.
Cunningham said he did not recall signing Wilson’s paperwork, the OEIG's report says. It adds that Magaly Rodriguez was hired as an affiliate employee for more than eight months and was paid more than $85,000.
William Pfeiffer's hire as an affiliate employee showed just how lax the administration had become in hiring people. Pfeiffer was first hired as a consultant not to be paid more than $19,999, but when the amount he was owed went above the procurement limit, he was redesignated as an affiliate employee. Latham, the HR representative, said she wasn't sure exactly what Pfeiffer did for the university or why he needed to be hired as an affiliate.
"It's quite possible by default we just ended up doing it so we could get [Mr. Pfeiffer] paid," Latham says in the report.
Response to the report
Baker said he had to take swift and drastic action to reverse course at NIU when he arrived in 2013.
The FBI, the state's Department of Housing and Urban Development, Department of Education, and the Illinois State Police were investigating NIU Police and the university’s financial affairs. There were also a number of senior executive openings, he said.
“If you were in my shoes and saw there was an FBI investigation and a need for immediate leadership, you’d want to rely on HR experts to help you do that appropriately, and that’s what I did,” Baker said in an interview Wednesday.
In a letter sent in April to Chad Fornoff, executive director of the Illinois Executive Ethics Commission, Baker expressed "strong disagreement" with the report’s findings and requested that the finding of him mismanaging the university be corrected.
“On a specific basis, I disagree with any finding that directly or indirectly infers that as president of Northern Illinois University, I instructed or implicitly gave general direction to university staff to the effect of disregarding legal requirements governing the hiring of certain employees or engagement of contractors,” Baker said in the letter.
Baker affirmed that he acted in good faith based on recommendations from senior staff.
“At no time did I intend myself, or any of my staff, to violate any policies or procedures,” the statement read. “I sincerely believed that all the decisions were in compliance with the applicable requirements.”
“Internal policies were apparently violated but in my role in the Senate, we’ve worked on gathering university policies and getting much better organized,” Faculty Senate President Greg Long said. “Certainly when Baker arrived, there was no organizational system of policies, but once they found mistakes were being made, they started corrective actions right away.”