Politics & Policy

Killing the Messenger

On the shameful persecution of University of Texas regent Wallace Hall

The Texas legislature is for the first time in its history contemplating the impeachment of a member of the board of regents of a state university, in this case Wallace Hall, appointed by Governor Rick Perry to the University of Texas board in 2011. Mr. Hall’s crime is embarrassing the university by investigating a number of scandals, including a secretive slush fund used to augment the salaries of law-school professors, questionable accounting practices, and the bending of admissions rules — notably, the reversal of admissions decisions in the law school — at the behest of elected officials. Impeachments of volunteer appointees are all but unheard-of in Texas, which has previously seen impeachments limited to judges and the notorious case of governor James E. “Pa” Ferguson — who also was impeached after getting on the wrong side of the University of Texas, having vetoed the school’s appropriations bill in 1917.

Mr. Hall has been dogged in investigating what he describes as “financial malfeasance” at the university, and has said that, given the opportunity, he would vote to remove university president William Powers over the tripartite scandal that has unfolded under his administration. The importance of this case is not limited to the University of Texas — New York University and other institutions have engaged in similar practices, though Texas is the only state with an impeachment case on the horizon.

The accusation that will garner the most attention (because it is the easiest to understand) and that is believed to be the impetus behind the move to impeach Mr. Hall (because it will personally embarrass elected officials) is arguably the least important: the admissions favoritism shown to friends and relatives of powerful Texas politicians. Mr. Hall says that he is able to document one case in which the adult child of a member of the Texas state house was rejected by a graduate program at the university and told that any possible future admission would be contingent upon retaking the entrance exam or enrolling in another school and showing adequate academic performance. After the representative contacted the school, the student was admitted without retaking the exam or doing coursework elsewhere. In a similar case, a state senator intervened in the case of an applicant who had been rejected and, in the words of Mr. Hall’s attorney, “reminded the UT Austin official of recent legislative action taken to benefit the university.” In both cases, Mr. Hall’s attorney identifies the program only as a “graduate school,” but people familiar with the case say that in both cases the institution in question is the university’s highly competitive law school.

Mr. Hall’s attorney, Stephen Ryan of McDermott, Will, and Emery, says that these cases are different from the usual recommendations from elected officials and other public figures in that the communication did not take place with the admissions staff but with the administration. It is one thing to have a state senator write a letter of recommendation for a student and for the admissions committee to take that into consideration; it is a far different thing for a state senator to demand a quid pro quo from the dean of a school. Mr. Hall has so far chosen not to make the names of these elected officials (and, hence, the students they patronized) public.

The second scandal has to do with the university’s use of forgivable loans to boost the pay of favored law-school professors, including a half-million-dollar grant to the dean of the law school, Larry Sager, who was pressured to resign when the bonus became public. (Mr. Sager has since threatened to sue Mr. Hall for suggesting that the practice was improper and possibly illegal.) The arrangement came to light in a classically collegiate fashion, with a group of female faculty members complaining that the slush fund was used “to pay mostly white males” to the exclusion of non-white and non-male faculty.

Disparities in faculty pay have long been a contentious issue at the University of Texas and similar institutions. (As a young reporter at the campus newspaper, I wrote about these issues in the 1990s, and they already were ancient.) Professors with lucrative non-academic career options — in law, science, medicine, engineering, and the like — generally are paid more than professors with less attractive career options — meaning those in the arts, humanities, gender studies, journalism, etc. Rather than accept that academic salaries are set in part by supply and demand, professors from the lower-paid fields demand that some sort of moral calculus be used to make compensation determinations. These differences also persist within fields, too: Law professors who are experts in tax and corporate law often are paid better than those who concentrate on things like critical legal theory or First Amendment law. But it is politically embarrassing for the university to pay them much more, particularly if they are white and male, hence the creation of the slush fund. New York University has been embroiled in a similar controversy with sweetheart mortgage deals for favored faculty, including one of nearly $3 million for a law-school professor. In a comic twist, the actress Anna Deavere Smith, possessor of an MFA from the American Conservatory Theatre and current artist-in-residence at the Center for American Progress, is listed as a member of the NYU law-school faculty and has been given a $1 million mortgage through the same program.

The third leg of the University of Texas scandal has to do with the university’s accounting for donations. After Mr. Hall and others challenged the university’s method for calculating in-kind donations (mostly software licenses), the administration was obliged to take some $215 million off of its reported fundraising counts. Software licenses may have a high nominal value, but in practice are generally sold at a discount and can be granted virtually free of cost if a company is so inclined, providing the university with an easy way to inflate fundraising reports. The university maintains that it did nothing wrong in its prior accounting, but has changed the way it reports such in-kind donations. As I have written elsewhere, public and semi-public institutions reliably engage in accounting shenanigans that would make Gordon Gekko blush and should quite possibly land one in jail. The university’s book-cooking may not have been illegal, but it does not inspire confidence in the financial integrity of the institution.

Those issues — questionable compensation practices for executives, dodgy accounting standards, sweetheart deals for friends and family — are familiar to anybody who has paid any attention to corporate governance over the years, the main difference between academia and Wall Street being that the University of Texas’s compensation sweeteners run in the six-figure rather than the seven-, eight-, or nine-figure range. But the principles are very similar, which brings up the fundamental question presented by the case of Mr. Hall: Is a university’s board of trustees to act like a corporation’s board of trustees, taking an active role in policy, management, and fiduciary issues, or is it to be a rubber stamp, a prestigious sinecure in which to park political cronies and campaign donors, one more stop on the cursus honorum for the charity-ball set? “It’s the classic university issue,” says Mr. Ryan. “Is the board a genuine check on the strong president of a university, or is it something else?” Mr. Hall believes that as a regent he has a duty to investigate wrongdoing and potential wrongdoing, and for that he is to be impeached.

The substantive case against Mr. Hall, to the extent that there is one, is partly based on the fact that he failed to disclose some business litigation on his application form when he was named a regent. This is so nakedly a pretext that it hardly deserves a response, though Mr. Hall’s lawyers will be releasing a letter on the subject later this week. Consulting with the governor’s office, Mr. Hall was advised that the litigation in question was not material to his application and did not require disclosure, and he took that advice. He has since disclosed that litigation, which indeed does not appear to be relevant to anything he has done as a regent. It is at most a minor oversight that was easily corrected. Even among his critics, there is no serious suggestion being made that he has acted out of any kind of financial or political self-interest, or indeed that he has done anything more than be an acute pain in the collective managerial posterior of the complacent and self-satisfied university system.

The real objection, as spelled out in the state-house document establishing the impeachment proceedings, is that as a regent Mr. Hall “abused that office by making numerous unreasonably burdensome, wasteful, and intrusive requests for information.” A trustee asked for information — lots of it. Given the university’s mismanagement of everything from admissions to compensation to accounting standards, the fact is that the regents should have been — and should be — more aggressive in monitoring how the university’s administration conducts its business on the public’s behalf.

The fact that the university’s administration does not want to share information with its regents, the media, or the people of the state of Texas suggests that there is much more to be discovered here. The attack on Wallace Hall is a case of political bullying, and it is shameful, but it may yet prove productive if in the course of its prosecution more light is shed on the self-serving practices of the state university systems in Texas and elsewhere.

— Kevin D. Williamson is roving correspondent at National Review.


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