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Regents chairman, WSU developer discusses conflicts of interest

Take a tour of The Flats at Wichita State University

Wichita State's Associate Director for Residence Life Maria Thompson takes us on a tour of The Flats at WSU, a new apartment complex with apartments with one to four bedrooms all with private bathrooms. (July 21, 2017)
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Wichita State's Associate Director for Residence Life Maria Thompson takes us on a tour of The Flats at WSU, a new apartment complex with apartments with one to four bedrooms all with private bathrooms. (July 21, 2017)

In a Regents discussion about navigating possible conflicts of interest, David Murfin said he was probably “the biggest problem.”

Murfin chairs the Kansas Board of Regents, which is responsible for overseeing state universities and colleges like Wichita State University. He also owns part of two businesses that are involved in development on WSU’s campus.

Some of those arrangements with WSU have gone before the Regents, although Murfin abstained from voting.

A state-commissioned audit earlier this year reported some current and former WSU officials worried about conflicts of interest on the Innovation Campus, the 120-acre development on the former Braeburn Golf Course near 17th and Oliver.

Murfin later told The Eagle he didn’t mean to label himself a problem, adding he’s found it easy to put the Board of Regents first and foremost.

“I’ve always put the Regents ‘hat’ on first,” he said in a brief interview. “I’m thrilled to be chairman … It’s a great opportunity to help education in the state.”

“(But) It’s not a position I sought. I didn’t seek to be on the Regents at all,” said Murfin, who was appointed by Gov. Sam Brownback in 2015. “I’ve been involved in lots of businesses around the state for years and years.”

‘Doing a community service’

Murfin has reported to the Regents that he has an ownership interest in MWCB, LLC and BGC Developers, LLC.

MWCB financed and managed the Airbus Americas Engineering building and a second partnership building on the Innovation Campus. In addition, MWCB developed the joint city-county Law Enforcement Training Center and private student housing south of Eck Stadium.

BGC is involved in developing Braeburn Square retail outlets like the Starbucks near 21st and Oliver, according to county and WSU documents.

Murfin said he was interested in the Innovation Campus before he had “any inkling I was going to be a Regent.” He said he bought into the vision of WSU President John Bardo “for helping education and helping the campus.”

“That’s why I got involved in the beginning because I really felt like I was doing a community service,” he said. “It had laid dormant for so long and they were having trouble getting an impetus so I felt about good about helping out.”

Murfin said his three partners, Nestor Weigand Jr., Ivan Crossland Jr. and Steve Barrett, are much more active in MWCB business than he is.

“But I do know what’s going on or try to know what’s going on,” Murfin said.

Some of that business has to go through the Kansas Board of Regents to move forward.

Last year, Regents authorized WSU to lease property on the Innovation Campus for a private housing apartment complex called The Flats, which was proposed and developed by MWCB.

On June 30 of this year, Regents approved a WSU request to lease about 13,000 square feet of land from the Regents for MWCB’s Partnership 2 building. The land was sub-leased to the nonprofit Wichita State Innovation Alliance and then sub-leased again for construction. It was the only topic for the six-minute special meeting, which was convened by telephone.

Murfin abstained from both the private housing and Partnership 2 votes, telling The Eagle he didn’t want the appearance of a conflict of interest.

“I’m trying to be absolutely open to my fellow Regents and absolutely disclose what we’re doing,” he said. “I want them to make their own decision.”

‘Variety of concerns’

The Board of Regents contracts with an auditor named BKD, LLP to provide management reviews to the six regents universities. WSU’s management review was published in February.

The auditors praised the Innovation Campus for attempting to expand the Wichita area’s economic base in a “cutting-edge manner.”

“The uniqueness of the Innovation Campus, and its on-going development, have raised some questions and concerns,” according to the review. “During our interviews, some individuals expressed … a perceived lack of transparency and possible conflicts of interest.”

The report said the involvement of Murfin’s firm in multiple Innovation Campus projects was a “common topic” in interviews.

Bardo told the auditors that MWCB’s role in the Innovation Campus was announced several months before Murfin was named to the board in 2015. The audit concluded the issue was addressed, which WSU officials echo as well.

“As the BKD audit notes, (Murfin’s) involvement has been appropriately identified and managed,” wrote Lou Heldman, WSU’s Vice President for Strategic Communications, in an e-mail. “Higher education benefits from having successful people involved.”

‘Lives outside of the Regents’

Regents are required to annually complete conflict of interest forms. And they’re supposed to tell staff if conflicts arise after they submit the forms.

Four regents, Murfin, Helen Van Etten, Ann Brandau-Murguia and Dennis Mullin, reported interests in advisory or governing boards tied to Regents’ work.

Murfin, Brandau-Murguia, Joe Bain and Shane Bangerter reported interests in entities that have contracts or transactions with an institution governed or coordinated by the Regents.

When there are conflicts of interest, Regents are advised to “excuse themselves from participating as a board member in any matter that comes before the Board involving or related those transactions,” said general counsel Julene Miller.

Regents and staff members said Wednesday and Thursday that the board’s conflict-of-interest policy was robust.

“I think the real issue here is that board members do have lives outside of the Regents,” said the board’s president and CEO Blake Flanders. “What we’ve done is to be as transparent as possible on where those might intersect.”

Before a vote to accept the staff’s recommendation on conflicts of interest, Murfin asked, “Can I vote or not since I’m the problem?”

“You’re not the only problem,” replied one Regent, to some chuckling around the room.

“He’s just one of the problems,” said another.

Murfin abstained in the final vote.

Daniel Salazar: 316-269-6791, @imdanielsalazar

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