Clip 6: Trade official quits as practices questioned / Spending abuse, hidden criminal past, inflated credentials move Texas Tech to act
By PETE SLOVERIt was 1982, and like many would-be oil-and-gas entrepreneurs, Patrick Lynn Helton had hit hard times.
A variety of get-rich energy ventures had added up to nothing, tens of thousands of dollars in court judgments were piling up against him by banks and investors - including neighbors and friends who accused him of assorted scams. Then, in March of that year, a Lubbock County grand jury indicted him on a felony theft charge after he bounced a $38,000 check - a charge to which he would eventually plead guilty.
Fast forward to 2004, and Pat Helton's rehabilitation appeared complete. For a decade - until this week - Mr. Helton, 53, had been executive director of the Northwest Texas International Trade Center, a high-profile, publicly funded export "incubator" at Texas Tech University.
Based on his work, he'd been recognized by the White House and was pulling down a state salary of $93,000. With the help of an influential lawmaker, he'd won a rare special license from the Legislature to roam the world at state expense - often business class - as a fixture on the economic development lecture circuit.
But the outward success belied a history of problematic practices, including a bogus travel expense report, concealment of his criminal history from employers and deception about his educational credentials.
Confronted with those facts Thursday, university officials on Friday put Mr. Helton on paid administrative leave. Later Friday, Mr. Helton called The News to say he had resigned. He said the pending publication of this article accelerated a decision he had previously announced to his supervisors.
"I'm gone," he said, adding his resignation will become effective after he negotiates a departure date Monday. "I don't want any damage to come to the program. That program really needs to survive."
Over the last decade, Mr. Helton had reported a more than fifty-fold increase in business brokered through his program, for a total of $420 million. He refused to name the clients that his $600,000-a-year program serves or provide any details to support those numbers. An internal university audit completed in December found "inadequate documentation" to support the last two years' export figures.
The center spends about $100,000 a year on travel, which the university audited last year after it was discovered that Mr. Helton and another worker had falsely claimed $3,800 for a trip to Cancun, Mexico, on which they did no state business.
Such globe-trotting on the state dime is uncommon, especially in tough fiscal times: Before last year's legislative session, Gov. Rick Perry ordered state agencies to restrict such travel to save money. But Mr. Helton won a highly unusual exception to that directive, with the help of a state legislator who this week confirmed that he and Mr. Helton had plans to launch a private consulting company.
Legislator's role
Rep. Carl Isett, R-Lubbock, is a member of the powerful appropriations committee and a strong backer of the trade center.
After Mr. Helton resigned, Mr. Isett said he knew nothing of Mr. Helton's criminal background or other problems and was concerned about having relied on Mr. Helton's word in vouching for the trade center at the Capitol. He ruled out any prospect of starting a business with Mr. Helton.
According to correspondence and e-mails obtained by The News, Mr. Isett successfully urged Comptroller Carole Keeton Strayhorn to grant a rare "revenue neutral" designation, meaning the trade center brings in more money to the state than it costs to operate. The travel exemption letter signed by the chairmen of the House Appropriations and Senate Finance committees cited that revenue neutral status - obtained with just a single page of supporting documentation - as the basis for the special privileges.
While Mr. Helton was seeking the revenue neutral certification in Austin, in Lubbock he was answering accusations of expense account abuse.
Last March, Mr. Helton and D'ann Harris, the center's director for market development, traveled for four days to Playa del Carmen, Mexico, near the resort of Cancun. The pair charged the state nearly $3,800, filing expense reports for a conference during which they claimed several hundred dollars in meals and alcohol to entertain foreign dignitaries.
As it turned out, there was no conference and no foreign dignitaries.
Mr. Helton said it was canceled after they got there. Another center staff member gave information to auditors suggesting that the agency listed by the two travelers as the conference sponsor had never planned such a meeting. Tech staff failed to find any proof of the existence of the foreign officials the pair said they had entertained, and those meal expenses were designated by Mr. Helton's supervisor as fraudulent.
"We didn't know what else to do," Mr. Helton said in an interview by telephone from a conference he was attending Thursday in Washington, D.C. "We made a bad decision."
Disciplinary action
Mr. Helton and Ms. Harris were required to repay the improper expenses and deduct four days' vacation, they had reprimands placed in their personnel files and needed to have future travel approved by a supervisor. The audit, which recommended tightening travel policies, found no other instances of expense account abuse.
"This was the first instance that I was aware of that he had had any impropriety," said Robert Sweazy, Texas Tech vice president for Research, Graduate Studies, and Technology Transfer, who approved the discipline. "Every case is unique."
Mr. Helton's program stopped taking federal funding in 1997, freeing it from periodic accreditation, inspections and reviews required every two to four years for federally funded centers.
As such, no outside agency now examines the center's books to ensure their accuracy. The business activity for which the center has taken credit has exploded from less than $1 million in Mr. Helton's first half-year to $96 million in fiscal 2003, a total of $420 million over the last decade.
"That's outrageous," said Sara Jackson, who ran the South Texas Border International Trade Center at the University of Texas at San Antonio from 1992 to 2001 and now teaches international business at the University of the Incarnate Word.
Ms. Jackson said her center operated under federal rules, which required that a client sign a form attesting to a transaction before it could be credited to the center. Those forms were spot-checked by federal officials to make sure no padding occurred, she and other trade center experts said.
Mr. Helton said his record keeping has been more informal: "The counselors would come in and tell me, 'Oh, XYZ company finally shipped that shipment off, you know, it was $50,000 in agricultural machinery, to Venezuela,'" he said. "Well I would write that down, and over a period of time, I would take my notes and put the report together."
He said he could not release a detailed list of deals closed by the trade center because it didn't exist.
Records, documents and interviews also show:
*When Mr. Helton applied for his Tech job in 1994, he claimed a nonexistent degree - from his prospective employer, no less - and an international business background contradicted by an earlier employment application he filed with the university.
"That was on my application?" he said. "I never claimed to have, intentionally claimed to have [a degree]. I'll have to look at that."
Job application
Mr. Helton was not required on the application to list his guilty plea to felony theft or the fact that he was on felony probation at the time of his hiring. The application form inquired only about convictions. Mr. Helton had been given deferred adjudication probation that - if successfully served - would have resulted in a dismissal of the case without a conviction in 1996.
*Two years into his Tech job, Mr. Helton was rearrested for failing to pay restitution or probation fees in the theft case. As part of his 1986 guilty plea, court records show, he pledged to repay Plains National Bank of Lubbock $37,816 over 10 years in monthly installments.
In March 1996, just before his probation was to expire, prosecutors filed papers to revoke it, alleging he had failed to make 71 of his 120 payments.
When he posted $1,500 bond on that arrest, he signed a sworn statement that his employer was Omni Export Management, a statement he now concedes was false and made to avoid revealing his position with the university.
"I just didn't want to put Tech down" on the form, he said.
Dr. Sweazy said that as far as he knew, nobody in the Texas Tech administration was aware of the original case or the rearrest.
The theft case was dismissed in October 2001. Mr. Helton said he finished paying restitution. The prosecutor's office said it could not find the case file to verify that.
*One of the trade center's higher profile clients has been Lubbock-based Compliance Service Group (CSG) Inc. According to news accounts, CSG and the trade center have formed a consortium to develop environmental and waste projects in Eastern Europe.
State corporation records show that in December 2002, Mr. Helton was named along with CSG president John Sutter to the board of a newly formed, related company, CSG International. Mr. Helton said that the idea never got beyond the talking stage and that he was not aware he had been included in incorporation papers.
Dr. Sweazy said Mr. Helton's supervisors were not aware of his involvement.
"There's certainly a potential for conflict of interest," he said. "That should be reported to the supervisor."
Researcher Amy Eiermann contributed to this report.
