SBOE Committee to Discuss Ethics Concerns

by Dan Quinn

This requires close watching. Faced with growing a growing list of ethics concerns regarding the Texas State Board of Education‘s management of the Permanent School Fund, the board’s Finance Committee is meeting on Friday to review ethics rules. The Austin American-Statesman has the story here. What isn’t clear, however, is whether some board members are more interested in weakening ethics rules than in cleaning up the problems.

In fact, the board’s Finance Committee chairman, David Bradley, R-BeaumontBuna, doesn’t even seem to take the concerns seriously. Mr. Bradley told the Statesman that the board’s current ethics policies have created a “culture of gotcha”:

“It becomes more of a political weapon and food fight. We’re going to try to make it a little more simpler. … Hopefully, we can eliminate some of the political gamesmanship.”

So what does Mr. Bradley want to do? From the Statesman:

Of particular concern to Bradley and [San Antonio board member Rick] Agosto are the differing disclosure requirements for the board members and the bidders vying for contracts with the Permanent School Fund. The bidders have to submit all contacts with board members for the six months before the posting of the job opportunity, but board members are not prohibited from having contact until the bid is submitted.

Let’s make one thing clear: the board should not weaken the requirement that bidders reveal prior contacts with board members. Instead, the rules should be tightened to require that board members also reveal any contacts they have had with bidders, regardless of when those contacts were initiated. That’s just common sense. Board members Pat Hardy, R-Fort Worth, and Bob Craig, R-Lubbock, have it right when they say the key is transparency. Says Mr. Craig:

“If you’re transparent and open about it, then … you clear up the perception that there may be a problem, and sometimes the perception is worse than reality. You’ve got to have full disclosure. It’s really not that complicated. Just do the right thing.”

Of course, the Texas Legislature could have solved the problem this past spring by stripping away the board’s authority to manage the PSF and giving that responsibility to a panel of finance experts. Not only would that have cleared up any ethics concerns, it would have also shielded decisions about curriculum and textbooks from vote trading and other shenanigans involving the PSF — a problem that we have also noted. The House passed (by an overwhelming majority) a constitutional amendment and other legislation to do so during the last session, but the Senate’s Republican leadership refused even to call a hearing on those measures.

It’s also helpful, we think, to recall Bradley’s own words in 2000. During his race for re-election that year, he portrayed himself as a defender of good ethics involving management of the PSF. At the time he told the Houston Chronicle that he had pushed for a new process for selecting money managers, saying the old process was “poisoned by campaign contributions” and that “deals were cut on a cocktail napkin.”

Ironically (or not), Mr. Bradley and two other board members were indicted less than two years later on a charge of violating the state’s law on open meetings for meeting over lunch with financial advisors to discuss the PSF. The charges were later dropped, with Bradley and the other board members agreeing to take a class on the state’s Open Meetings Law.

Then in 2008 Mr. Bradley received his single largest re-election campaign donation from an investment consultant in New Hampshire — a man who had previously worked with fellow state board member Rick Agosto. At the time, Mr. Agosto wanted the board to hire as its new investment consultant a firm called New England Pension Consultants (NEPC). He hadn’t told the board that he had met previously with NEPC on private business matters. It was Mr. Bradley, however, who successfully pushed the board to hire NEPC at a meeting in July of this year. (Mr. Agosto was absent from that meeting.) (See more here.)

TFN will be watching closely what the board decides to do. We hope the state’s lawmakers are, too.