A University of Nebraska regent leading a development corporation for Baxter Arena bought bonds issued to pay for the project.
Regent Howard Hawks of Omaha mentioned his purchase during last April's Board of Regents meeting, after another regent asked whether that kind of purchase would be a conflict of interest.
Hawks said that he had bought some of the arena bonds and that he had disclosed his bond purchase to NU.
Board policy says no member "shall have any substantial financial or personal interest in business transactions of the University without disclosure of such interest and without disqualifying himself or herself from the decision-making process."
When Regent Kent Schroeder asked whether such a purchase was a conflict, Joel Pedersen, NU's general counsel, said, "I don't have a clear answer for that." Pedersen has declined subsequent interview requests from The World-Herald.
NU's chief financial officer, Dave Lechner, spoke next, telling regents the bond purchase was not a conflict.
"In the past we've said no, but I'll investigate that," Lechner said at the April meeting. "We're widely held. As long as we're not cutting special deals with people and they're at market, I don't see a problem."
In an October interview, Hawks declined to share details on his bond purchases, saying they are not public information.
NU issued $53.9 million in bonds for the arena in November 2013 at interest rates of up to 5 percent. They were available for the public to purchase.
Hawks is among elected officials in the state who are required to file financial disclosures with the Nebraska Accountability and Disclosure Commission. His most recent disclosure, for 2014, didn't include NU-issued bonds among his holdings.
Hawks said that if the bonds weren't on his disclosure form, "some entity somewhere that I have involvement in" must have bought them.
He said he bought the bonds in case the arena project came in under budget and "the university would have wished they didn't issue the bonds."
"Then they could get them back, where otherwise, held by someone else, they could not," Hawks said.
When asked whether he was profiting from the bonds, Hawks said, "I guess I would get the interest on the bonds. I guess that is making money."
Under state law, public officials have a conflict of interest if they take an action or make a decision that could result in a financial benefit or detriment to themselves, their family members or a business interest.
Frank Daley, executive director of the Accountability and Disclosure Commission, said his agency doesn't comment on specific situations unless a formal complaint is filed. He spoke generally on the law.
"At the time you are acting, are you faced with taking an official action or making an official decision that would have an effect?" Daley said. "If the answer is no, then you don't have a conflict of interest."
Hawks, founder and chairman of private energy company Tenaska, has been an NU regent since 2002.
He was on the NU board when it passed a plan to build the UNO arena and voted in favor of that plan. The university later formed the development corporation and issued the bonds. As a bond owner, Hawks would likely have been required to recuse himself from Board of Regents votes on the project if the board had been overseeing it directly.
But since the project was in the hands of the arena's development corporation, Hawks — serving as the corporation's chairman — oversaw the arena work through its completion in October.
NU has maintained that the corporation's work is separate and independent from the Board of Regents.