Something’s Rotten Here

by Dan Quinn

In today’s Texas Tribune story about the State Board of Education‘s management of the Permanent School Fund (PSF), much of the focus has been on this inane quote from board member David Bradley, R-Beaumont Buna:

“If you sit on the mental health commission, do you have to be retarded? If you sit on the [Texas Alcoholic Beverage Commission], do you have to be a drunk?”

Bradley was arguing that the board — made up mostly of non-finance types, like a dentist, lawyers, an insurance salesman and political activists — could do a fine job of managing the massive PSF. But perhaps more interesting was Bradley’s sneering criticism of the fund’s permanent professional staff. He told the Tribune that the staff simply couldn’t be trusted because those employees work for the Texas Education Agency instead of reporting to the state board:

“Staff usually works against the board. Sometimes staff can facilitate an agenda of their own.”

And what agenda would that be, Mr. Bradley? Is the professional staff you hold with such contempt interested in something more than maximizing the return on investments for a fund that benefits Texas kids and public education? If that’s what you mean, bring forth the evidence.

In truth, there is no evidence at all that the professional staff has any other agenda than making sure the PSF investments perform well. But there are certainly legitimate questions that might help taxpayers learn more about the interests of Bradley and some of his board colleagues when it comes to the PSF — such as, how do board decisions about management of the fund influence decisions about curriculum and textbooks?

We noted some of these questions last fall. But it’s worthwhile to consider them here:

1. Why did Bradley and the rest of the board’s far-right faction support Democratic board member Rick Agosto‘s desire to fire the board’s previous investment consultant? And why did they support Agosto’s desire to hire, instead, New England Pension Consultants for that position? The PSF’s professional staff rated the fired consultant higher than NEPC. Moreover, NEPC’s proposed (and accepted) fee was the highest, by far.

2. Was support for hiring NEPC tied to Agosto’s votes that helped the far-right faction on a number of controversial board decisions, such as the adoption of flawed standards for public school Bible classes?

3. Why did Bradley receive his largest campaign donation in 2008 from a former colleague of Agosto at Harbor Capital Management? The donor, Edward Theobald of New Hampshire, typically donates to liberal and moderate Democrats in New England. What possible interest did he have in the election of a hard-right Republican in an obscure state board election in Texas?

No, Mr. Bradley, the interests of the PSF’s professional staff aren’t the issue here. At least, there is no evidence that they should be. The issue is why a $23 billion public trust should be left in the hands of politicians who have repeatedly expressed their contempt for real expertise and have engaged in what looks more and more like vote trading that puts political interests ahead of the education of Texas schoolchildren.