UPDATED 5:50 PM NOV. 15

Student funds paid to unlicensed firms

This is the first story in a series examining how student activity fee money is spent by the Student Activities Board and the Student Government Association.

By Shannon Knebel, Herald Staff

More than $5,000 of the Student Activities Board budget was spent for services provided by two companies operated by a student leader.

H & K Enterprises and Pyro-Erectus, owned by Union Advisory Board President David Huckabee, have provided the SAB with services ranging from providing promotional pens and concessions to building and lighting the Homecoming bonfire.

H & K Enterprises and Pyro-Erectus are not businesses, but partnerships, said Huckabee, a senior speech communications and political science major of Little Rock.

According to Ken Saddler spokesman for the City Clerk's Office, neither H & K Enterprises nor Pyro-Erectus are licensed as businesses to operate within Jonesboro. According to Saddler, this is illegal no matter the amount of money being made by a business.

It is unlawful for any person engaged in a business, occupation, vocation, profession, trade or calling to do business in Jonesboro without first acquiring a license from the city collector, according to Section 4.04.01 of the Business Licenses and Regulations for Jonesboro.

"They are not technically businesses, per se. I am a person who has a partner and we have a joint checking account, is basically what it is," Huckabee said. "I understand what they [the city clerk's office] think because it is portrayed to them that this is a business operation. But it's not a business. It's me operating with a partner ­ who have a joint checking account with a different name on it.

"That's why my business doesn't file taxes. We each file our own individual taxes because the partnership is just basically a checking account. The business is a joint checking account."

Huckabee compared his companies to a kid who mows lawns for his neighbors.
"He's not going to go register his business with the city clerk's office, because he cuts his next-door- neighbors-on-either-side's grass. Even though that is a legitimate business," he said. "It's completely legitimate that I provide a service.

I don't have a business; I provide services that I can do. I called my tax attorneys. He said, basically, you don't have a business, you have a partnership."

"Trust me, when you have a last name that people like to attack on a regular basis, you make sure that what you do is legal. So, yes, my business, or the things or the services that I provide, are legal to operate," Huckabee said.

However, the City Collector Becky Clark disagrees. "He needs a business license. He is providing services, which is what a business does. He has entered into contracts with the university," Clark said. "It's a business, plain and simple."

Clark said her office will be issuing a statement to Huckabee for both companies. The fine for not having a business license can be the cost of the license per day for each day a business is illegally operating, but not more than $500.

The SAB has no way of knowing if a business is operating legally before it contracts out services, said Reggie Porter, dean of the Office of Student Leadership and Involvement.

"I don't know that they have to be licensed to operate businesses here in Jonesboro in order for us to do business with them. I know nothing about business licenses. I have no background in any of that," said Randall Tate, associate dean/director of the Student Union. "Maybe they [H & K and Pyro-Erectus] were unaware of the law. There are millions of laws and millions of statutes out there, to know every one of them is asking a lot of a person."

H & K Enterprises provided cotton candy and Sno Cones for $1,415 and $690 for pens ordered for giveaways, both for use during Welcome Week.

Pyro-Erectus was paid $3,000 for building and lighting the Homecoming bonfire. Last year's Homecoming bonfire cost about $1,000 and was mostly handled by the Physical Plant, according to the SGA 2000 budget. The cost increase of about $2,000 can be accounted for with the rising costs Physical Plant labor and the fact that Pyro-Erectus also cleaned up the remnants of the bonfire, Porter said.

The SAB searches out businesses that can provide services at the lowest cost and H & K Enterprises and Pyro-Erectus were the lowest bidders, Porter said.

"I can honestly say that David Huckabee is one of the strongest leaders that this university has had. And when it comes to David, he gets things done," Porter said.

Carol Barnhill, an ASU purchasing agent, said student groups such as the SAB and the SGA do not fall under state purchasing guidelines because the money that they have is generated from auxiliary funds. Auxiliary funds include money that is collected for a specific purpose such as the student activity fee or the new student union, she said.

Although there is no regulation that prohibits a student organization from contracting services through another student leader, it raises ethical questions, Barnhill said.

"We have flagged our files for these businesses meaning that we will no longer do business with him. We do feel like this is ethically not right to do business with a student in this manner," Barnhill said.

Barnhill said her boss, Don James, assistant vice president of business, will be setting up a meeting to discuss this matter with the Office of Student Affairs.

According to Huckabee, there are no ethical questions involved in this matter.
"Unethical. Not exactly. Because if you look at the bids that were put in on those [contracts], not only did I come in super-low, but I mean, if you want to do a story, do one on how much money David Huckabee has saved the Student Activities Board," Huckabee said. "That is exactly what my company does. We save the students money."

"I have never been a part of the SAB. And my company has never done business with an organization that I am a part of, or the head of, or however you want to look at it," Huckabee said. "It has never done business like that even though we could have saved money on things that the UAB purchased this year and for the SGA last year. We could have saved a ton of money. But we didn't, because that is unethical."

H & K Enterprises has donated money to ASU on various occassions, including $600 to the Rugby Club, Huckabee added.

Dr. Rick Stripling, interim vice chancellor of Student Affairs, said he had just learned about these companies.

"Obviously, that is a student-run organization, the Student Activities Board. I am sure that they have made deliberations to collectively make the decisions to do those things. Part of that is because they are not under state purchasing guidelines ­ they have the ability to go in that direction," Stripling said.

"I think the question is was the service delivered as contracted, as requested. Have they provided adequate services, was it a service that was needed and was it price-appropriate?" Stripling said.

"Because the SAB is run by students ... there is that learning experience that if they choose to buy something that becomes questioned, if it is challenged, people ask about it, it's something that they should be willing to defend," Stripling said.