Attorney General's Investigators Say UT Law Hid Records, Broke Rules in Salary Case

Last week right after the Texas attorney general released an investigative report on the University of Texas Law School, we talked a little bit about it here on Unfair Park. Reflecting my own journalistic and literary values, I went for the really lurid stuff first, like the former law school dean who ran up $400,000 in credit card expenses in under four years.

See also: Texas Tribune Blows Wallace Hall Story Again

But in this case, the substance is actually more lurid than the lurid stuff. The attorney general was actually re-investigating the law school and a private foundation closely associated with the law school, on charges brought four years ago by UT regent Wallace Hall, a Dallas businessman, after an internal UT investigation was tossed out as basically not worth the paper on which it was printed.

We talked about Hall last September. To say that he was roundly criticized for criticizing the law school and the university would be an inane understatement. Hall was witch-hunted and persecuted from one end of Texas to the other. But the attorney general's report released last week is yet one more piece of evidence, probably the most solid so far, that he was right about everything he said.

See also: Wallace Hall Was Right About UT All Along

The 2012 report cranked out by a UT staff lawyer about an off-the-books compensation scheme for law school professors concluded: "There exists no evidence that anyone at the Foundation or the Law School attempted to or did conceal the forgivable personal loan program which is the primary focus of this report. The forgivable personal loan program was simply not known or understood outside the immediate Law School community."

The matter was kicked over to the attorney general after Hall complained persuasively that the inside report was a plain and simple cover-up. William Powers, president of the university, had recently fired the dean of the law school after learning he had given himself a half-million-dollar "forgivable loan" from a private fund intended to retain faculty who were being courted by other schools. When Hall accused the university of papering over this and other related matters, he was excoriated as a rogue troublemaker by fellow regents and powerful legislators.

Newspaper editorial pages all over Texas took up the cudgel against him for seeking too much information. A special House of Representatives committee was even formed to seek his impeachment: "Hall's unreasonable and burdensome requests for records and information from UT Austin provided, and continues to provide, a sufficient basis for the Committee to propose articles of impeachment," a lawyer for the committee concluded.

He wasn't impeached. Lawyers who had not been drinking told the committee that he hadn't done anything for which he could be impeached and that he was really only doing his duty as a regent.

The university's principal defense against Hall was always that the university had been open and candid about the matters he raised and that he was peppering the university with burdensome requests for information as a kind of unhinged harassment technique.

The attorney general's report released last week is replete with instances in which the university refused to pony up information requested by investigators for the attorney general. The report said those documents "were not produced by any entity in response to this investigation."

The report concludes that former law school Dean Lawrence Sager "supported a lack of transparency." More to the point, the report accuses Sager of deliberately deceiving the university and the public in violation of state open records laws.

"As a result," the report finds, "under Sager's leadership the Law School provided incorrect or incomplete responses to requests for salary information by university management and the public pursuant to the Texas Public Information Act."

This wasn't about petty matters. The attorney general's investigators were trying to determine whether Sager had used both university funds and money from a private foundation to pay off a lawsuit quickly in order to prevent disclosure of the off-the-books bonus scheme for professors. In the end, the investigators decided that was exactly what had happened: "To settle a lawsuit, both foundation and public funds were expended in order to paper over a climate of non-disclosure."

Try that yourself some day, papering over an entire climate. It's a lot of paper. The investigators found that Sager had kept 71,000 emails in private email accounts. (Sager's name is redacted from some parts of this account, but the context clearly shows he is the only person who could be under discussion.)

Hiding public information in private accounts is a violation of state law. The investigators say in the report they "immediately informed the law school of this fact and its obligation to retrieve any state state records for proper retention."

Later they learned Sager had coughed up some 35,000 emails which he apparently agreed were public and that those emails were in the possession of the university's general counsel. There is no explanation offered in the report for what happened to the other 36,000 emails.

But it does take us back to the attacks on Hall for seeking too much public information under the Texas Public Information Act. Sager is only guy in a swirl of people at UT whose behavior has been questioned. He alone turns out to have tons of records squirreled away in private accounts. Asked to give them back, his first blush offer is 35,000 records. The obvious question: How much more information is still being withheld?

The nature of some of the information turned up by the attorney general's investigators is far from innocent. For example, they found that the UT Law School maintained a set of double books for its so-called "forgivable loan" program, a forgivable loan being a loan you don't have to pay back. The report says, "The Law School maintained two forgivable loan lists -- one that contained Dean Sager's $500,000 forgivable loan and one that excluded that particular loan."

Oh, that forgivable loan.

The squirreliest chapter of the report deals with a lawsuit brought by law school Professor Linda S. Mullenix accusing Sager of running a secret good-old-boy pay scheme in violation of university bylaws and of state and federal law. When Sager saw the suit, according to the report, he failed to report it immediately to the university's Office of General Counsel as required by "the university's standard procedures governing lawsuit demand letters related to employment matters."

Sager denied to investigators that he was worried about the suit's potential for taking the off-the-books compensation scheme public, but the investigators found Sager's own notes in which he said just that:

"(The lawsuit) whether or not she prevailed," he wrote, "would be very damaging to the Law School and to the University. To the Law School, because of the specter of gender discrimination, the personal attacks that would accompany litigation of this sort and the hostile and extensive revelation of the full picture of faculty compensation..."

Instead of reporting the lawsuit first to the university's general counsel, Sager took the matter to the law firm Vinson & Elkins. Out of that process came a lucrative settlement with Mullenix including "a forgivable loan from the foundation, a state-funded permanent pay increase and reimbursement of attorney's fees," all tossed together without proper signatures and in a way the investigators said "did not follow required internal approval processes for settlements."

The report never directly calls Sager a liar, but it often comes pretty close. Another section deals with the timing of the half million dollar forgivable loan made to him by a private foundation over which he personally had direct control. The apparent timing would be that in January 2009 Sager went to Powers and asked for a raise. Powers told him, according to the report, "that salaries were frozen and no raises were to be provided, including any raise for Sager."

The investigators say they found records showing that within two months of being denied a raise from the university Sager was using Vinson & Elkins again to put together the half million dollar forgivable loan for himself from the private foundation. The report, again with Sager's name redacted but obviously describing him, says Sager, "denies that the loan was sought after President Powers rejected (Sager) for a pay increase."

But the report says Sager's recollection of the facts is "not consistent with the emails and other evidence obtained during the course of this office's investigation."

That's what I mean by pretty damn close. Most of this information is brand-new in the attorney general's report, either not revealed at all in the earlier discredited internal report or barely referenced and rouged.

Sager is by no means the only person at UT tarred by the report. It includes an entire saga about special compensation for Powers, including a check written to him from the private foundation for $115,000. Investigators found that the staff person who wrote the check to Powers was assured first by a superior that the $115,000 gift had been approved by the board of the foundation, by the chancellor of the university system and by the president of the university. But the investigators could find no record of any of those approvals.

The attorney general's report itself is peculiar for a certain lack of closure on many of these points. For example, if somebody gave $115,000 to the president of UT without any approval, shouldn't he at least have to pay it back? And what about those 35,000 emails Sager finally coughed up? It doesn't sound as if the investigators ever put their hands on them. They report lamely instead that they found out later where they were. And that's it.

But even if this report does seem shy about drawing obvious conclusions, it can't lean backwards hard enough to avoid conveying one big one. Wallace Hall was right about all this stuff. If anything, the real story -- the substantive one -- is even worse than the lurid one I went for.

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