Education

Whistleblower lawsuit alleges improper spending at NCCU, including a luxury SUV

Dr. Johnson O. Akinleye introduced as NCCU’s new chancellor introduced in June 2017

Dr. Johnson O. Akinleye is congratulated after being named the new chancellor of N.C. Central University in June of 2017. Dr. Akinleye succeeded Chancellor Debra Saunders-White who died last November.
Up Next
Dr. Johnson O. Akinleye is congratulated after being named the new chancellor of N.C. Central University in June of 2017. Dr. Akinleye succeeded Chancellor Debra Saunders-White who died last November.

A former vice chancellor at N.C. Central has sued the university, alleging that he was wrongfully terminated for raising concerns about the chancellor's luxury vehicle and reporting that UNC Board of Governors members were trying to steer a multimillion-dollar campus housing contract to a Raleigh company.

Benjamin Durant was fired in January from his position as vice chancellor for administration and finance. He filed a whistleblower lawsuit against NCCU and its chancellor, Johnson Akinleye, in Durham Superior Court on Tuesday.

The lawsuit alleges that Akinleye and two members of the UNC system governing board — Harry Smith of Greenville and Darrell Allison of Morrisville — tried last year to steer a $90 million to $120 million contract to the Preiss Company of Raleigh, one of the largest developers of off-campus housing in the country. The suit said the board members were involved in "secret meetings" to explore public-private partnership with the company. Durant, the suit contends, informed the group that they were obligated to run a "fair, open and competitive" bidding process.

The suit said that Allison pushed Preiss and at one point said, "In the private sector, we go through those processes too, but we already know the developer we are going to pick up front."

Allison, an NCCU alumnus, former trustee and donor, said he was shocked at that allegation, which he called "unconscionable." He said he had no connection to the Preiss Company.

Allison said he had facilitated meetings between the chancellor and Preiss, as well as other potential financial institutions and development companies, to learn more about their work in an effort to explore public-private partnerships. He said historically black universities had not been as involved in so-called "P3" deals as some of the larger campuses and he wanted to see if it would be beneficial for NCCU.

He said the allegations were totally untrue. "It's very disappointing," Allison said. "If I'm guilty of anything, I'm guilty for my utmost respect and support for the institution."

The lawsuit said Smith led the discussion about the Preiss Company and "aggressively questioned" Durant and suggested he withdraw from the process. It alleged that Smith was an investor.

Preiss Company officials could not be reached for comment.

RAL_ NCCUCHANCE3NE041918CEL.JPG
NCCU Chancellor Johnson O. Akinleye speaks during his installation ceremony on the campus of North Carolina Central University in Durham, N.C. Thursday, April 19, 2018. Chuck LIddy cliddy@newsobserver.com

Smith, who is running to be the next chairman of the Board of Governors, said the allegations about the housing bid process were baseless. He said he encouraged as many bidders as possible to get the university the best deal, and Preiss was eliminated early among nine bidders.

He said he and Allison were advising NCCU in an effort to help the university run its fee-based services more efficiently. Meetings were not secret, Smith said, and were attended by about a dozen people. Smith acknowledged that he had done deals with Preiss on standalone apartment complexes previously, but had not conducted business with them in three years.

"I didn't have one single conversation with the Preiss Company about the process," Smith said Wednesday. "I didn't involve myself in any way, shape, form or fashion in the process. I mean zero, zilch, nothing."

He said Durant was "grossly unprepared" in the meetings. "He's painting a picture that's not there, and the facts are going to easily prove that out," Smith said.

Durant reported his concerns about the situation to an NCCU trustee, Michael Johnson, the suit contends.

The lawsuit also said Durant objected to the university's spending on a sport utility vehicle for Akinleye. Shortly after he was appointed in June 2017, Akinleye was furnished with a new black Nissan Pathfinder, leased through the State Motor Pool.

Chancellors in the UNC system are given cars to use as part of the job.

A few months later, according to the lawsuit, Akinleye requested a GMC Yukon Denali to replace the Pathfinder. NCCU administrators recommended that the vehicle be financed from the NCCU Foundation, but the $69,000 vehicle was eventually paid for with state money, the lawsuit contends.

Meanwhile, the N.C. Department of Administration had sent a letter to the chancellor, saying that the Yukon was deemed a "luxury vehicle" and could not be assigned for state use, the lawsuit said.

Durant said he repeatedly told the chancellor that state funds were not to be used for the vehicle.

"When Mr. Durant refused to let the issue drop, the Chancellor became enraged," the lawsuit said. "In his anger, Chancellor Akinleye yelled at Mr. Durant and called Mr. Durant 'stupid' and 'clueless.'" As Durant walked out, the suit said, Akinleye said, "You're gone!"

Durant received a letter Jan. 31 saying he was terminated because Akinleye was changing "strategic direction."

A spokeswoman for the Department of Administration said NCCU sent the vehicle to State Surplus Property for sale in February, and it was sold by auction for $57,105.

Durant seeks back pay and other compensatory damages.

NCCU issued a statement Wednesday saying the university had acted in accordance with its policies and procedures. "The allegations made will be vigorously challenged and defended in the court of law," the statement said.

Smith and Allison chalked up the lawsuit to a disgruntled former employee, and they said it was intentionally filed the same week as Akinleye's installation celebration, which is Thursday.

  Comments