Legislative auditor asked to investigate LSU business deal

BATON ROUGE, LA (WAFB) - Amid questions raised by the 9News Investigators, as well as an anonymous tipster, LSU has asked Louisiana Legislative Auditor Daryl Purpera to look into LSU's former business dealings with a non-profit called Louisiana Health Information Technology Foundation (LaHIT).

Essentially, LaHIT was hired by LSU in 2014 to market CLIQ, a computer program developed by programmers at LSU.

LSU says its own internal review of that relationship has raised "a number of potentially concerning policy and procedural issues" and involves matters that "go beyond the legal authority" of LSU to pursue.

A major concern, according to LSU, is that the school got a much lower profit from the arrangement with LaHIT than it has traditionally enjoyed with similar deals with other entities. Also, LSU wants to know if legal advice given during the LaHIT negotiations was in the best interest of the school.

A tipster recently provided WAFB with multiple emails spanning several years that also outline several concerns about potential conflicts of interest and question whether the LSU Board of Supervisors was presented with all the facts before approving some of the agreements with LaHIT.

Some of the potential conflicts include whether at least one member of the LSU Board of Supervisors properly disclosed he had an immediate relative on the LaHIT board and whether another LSU board member previously or concurrently served on the LaHIT board.

LSU Interim VP of Strategic Communications Jason Droddy said Wednesday LSU has not uncovered any suspected criminal activity and does not expect to. However, he said LSU asked for the assistance of the legislative auditor because that agency can legally gather certain records LSU cannot.

The CLIQ program developed at LSU is a software package that accumulates numerous patient records and other medical data from multiple providers as a tool to help healthcare providers improve efficiency and improve patient care. Traditionally, the inventors of such a product would receive 40 percent of the profits as a royalty. However, in the LaHIT deal, the royalties were reduced to just 4 percent.

CLIQ was developed by "about ten computer programmers" at LSU, Droddy said.

Droddy said the lower royalty, "non-orthodox" agreement with LaHIT was cause for concern and ultimately led LSU to cancel its agreement with LaHIT in mid 2016.

LSU President F. King Alexander requested help from the Louisiana legislative auditor on April 13, 2018, the same day he agreed to speak to WAFB's Investigators about LSU's dealings with LaHIT. His request for the probe came two days after the same tipster who provided information to WAFB also asked the Louisiana Attorney General to investigate the matter.

"We've asked the internal auditors to come in and help us," Alexander said during the brief April 13 interview with WAFB.

LSU says its own internal auditors eventually hired an outside auditing firm to help with the audit. That audit is still underway.

Within a few months of LSU ending its relationship with LaHIT, the school hired a private company named HarmonIQ to help further develop the CLIQ program. Within days of that happening, six LSU programmers who worked on CLIQ resigned from LSU and went to work at HarmonIQ.

The HarmonIQ deal offers a 50-50 profit split between HarmonIQ and LSU, Droddy said. Of that, LSU now pays the more traditional 40 percent in royalties to the LSU employees who invented the program.

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