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In addition to Robert Kennedy’s duties as president at the University of Maine, he has served on the Board of Directors at FairPoint Communications Inc. since March 2008.
FairPoint recently bought the telecommunications operations for Maine, New Hampshire and Vermont from Verizon. Since the switch, FairPoint has faced strong criticism for its service and has had to answer to regulators in all three states.
FairPoint and the University of Maine System are now competing for federal funds to expand high-speed Internet, according to spokespeople from both organizations. Kennedy said he has not been officially approached to take part in the discussions.
“The subject, in terms of decision-making, has not come up,” Kennedy said, although he has talked informally with both parties. Kennedy said the official conversation has not yet reached either the university presidents or the Board of Directors.
If Kennedy was asked to engage in an official conversation, or if he were in any other way to encounter a conflict of interest, he said he would immediately recuse himself.
“[Kennedy] believes that the state’s telecommunication’s infrastructure is critical to the state in many ways,” said Joe Carr, UMaine’s Director of University Relations. Kennedy now has a role in helping to determine the future of the state, Carr said.
Kennedy has not been involved in FairPoint’s regulatory hearings, either, saying only that there have been some “general briefings, occasionally.”
According to a report filed by FairPoint, non-employee members of the Board of Directors receive a $55,000 retainer for their service and about $45,000 in stock awards per year.
In addition, board members can receive an additional stipend for work on a particular committee. Kennedy received $15,000 over two years as a member of the succession committee, which picked FairPoint’s next Chief Executive.
Kennedy was appointed in March 2008, and therefore did not receive full compensation for that year. Kennedy received $84,068 in compensation from FairPoint in 2008, according to the report.
Combined with his $210,405 salary, not including benefits, from UMaine in 2008, he earned nearly $300,000 last year.
Kennedy has since been re-elected to serve FairPoint until 2012.
The board meets four times a year in person, and approximately four more times by teleconference. Kennedy said he takes personal leave when attending such meetings.
Kennedy was suggested for the Board of Directors by Verizon. When FairPoint purchased the telecommunications operations in Maine, New Hampshire and Vermont, Verizon spun its New England operations into a separate company, which FairPoint immediately acquired, according to Eric Rabe, Verizon’s Vice President for Media Relations. Verizon shareholders then had a majority stake in the company, and Verizon had the right to appoint three members to the Board of Directors. Verizon chose one member from each of the three states, although they had no requirement to do so.
“We tried to pick folks who we thought would be good stewards of FairPoint,” Rabe said.
According to Kennedy’s contract, he “shall not, without prior written permission from the Chancellor, enter into services of any professional nature with any person or firm other than to the UMS, and shall absolutely not engage in any activity that may result in a conflict of interest or be competitive with and adverse to the best interest of the UMS.”
Kennedy said his membership on the board was approved by the system office and that he met several times with the chancellor and the system’s legal counsel before making a decision.
“You want your president to be attractive to different industries,” Kennedy said. While he did not know of any predecessors in a similar situation, Kennedy said many of his counterparts at universities across the country hold similar dual roles.
