Wallace Hall Was Right About UT All Along

Maybe the University of Texas at Austin and its many passionate defenders had reason to beware of Wallace Hall when Governor Rick Perry appointed him to the UT System board of regents in 2011. Perry was pushing some plan he got from a rich oilman to eliminate research as a criterion for granting professorial tenure, an idea scathingly denounced by detractors as tantamount to book-burning.

But having a good motivation only makes this story worse. When Hall began to criticize the way UT-Austin was run on strictly administrative grounds, he was roundly denounced as a sort of fifth-columnist for Perry's assault on tenure. Later when he accused the university of corruption, he was hunted like a witch.

A campaign launched against Hall included impeachment proceedings in the Legislature and a criminal complaint brought to the Travis County district attorney. Even the establishment press turned on Hall, whose greatest sin was doing what the press is supposed to do -- ask questions that make powerful people uncomfortable. An unbroken chorus of editorial page shrieking from Texas' biggest newspapers denounced Hall and called for his resignation.

The dramatic denouement is threefold: Hall has been vindicated of charges he abused his role as a regent. The charges of mismanagement and corruption he brought against UT are all being re-investigated because now people are admitting he was on to something. And finally, Hall's biggest accusers are starting to look like the biggest rats, the ones who had the most to hide.

In fact it's hard to recall a case in Texas history where a person so roundly denounced has been so completely vindicated, not counting Sam Houston's problems with drink.

When he shows up for an interview at a bagel shop in North Dallas, Hall does not look like a pariah, like Sam Houston or like a guy who has been staying up nights. He's 52 with a full mop of sandy hair, looks 42, rides up on a big BMW motorcycle in casual clothes and, generally, once he's got his coffee, is cool as a cucumber.

A CEO and investor, St. Mark's and UT-Austin graduate, Hall has two sons and a daughter at UT-Austin. He first professes his love of the university, then says his first collision with peers on the board of regents was over something that just seemed to him like common sense.

When Hall was early on the board, the university revealed to regents there were problems with a large private endowment used to provide off-the-books six-figure "forgivable loans" to certain faculty members, out of sight of the university's formal compensation system. Hall wanted to know how big the forgivable loans were and who decided who got them. He wanted to know whose money it was. He was concerned there had to be legal issues with payments to public employees that were not visible to the public.

University of Texas President William Powers painted the law school slush fund as a problem only because it had caused "discord" within the faculty. He vowed to have a certain in-house lawyer get it straightened up. Hall, who thought the matter was more serious and called for a more arms-length investigation and analysis, thought Powers' approach was too defensive. In particular, Hall didn't want it left to the investigator Powers had assigned.

"I had issues with that," Hall says. "I felt that was a bad, bad deal. The man's a lawyer. He lives in Austin. The people in the foundation are his mentors, some of the best lawyers in the state. They're wealthy. He's not going to be in the [university] system forever. He's going to be looking for a job one day."

But Chancellor Francisco Cigarroa and other members of the board of regents did not share Hall's concerns. "I was overruled," Hall says. "That's when I first felt like, one, there's a problem at UT, and, two, the system has set up a scheme that gives the opportunity for a less than robust investigation."

Since then, the university's own in-house investigation, which cleared the law school of any real wrongdoing, has been discredited and deep-sixed. The in-house lawyer who did it is no longer on the payroll. The matter has been turned over to the Texas attorney general for a fresh investigation.

The head of the law school has resigned. The president of the university has resigned. Cigarroa has resigned.

Next, Hall questioned claims the university was making about how much money it raised every year. He thought the university was puffing its numbers by counting gifts of software for much more than the software really was worth, making it look as if Powers was doing a better job of fundraising than he really was.

When Hall traveled to Washington, D.C., to consult with the national body that sets rules for this sort of thing, he was accused of ratting out the university -- a charge that became part of the basis for subsequent impeachment proceedings. But Hall was right. The university had to mark down its endowment by $215 million.

The really big trouble began in 2013 when Hall said he discovered a back-door black market trade in law school admissions, by which people in positions to do favors for the university, especially key legislators, were able to get their own notably unqualified kids and the notably unqualified kids of friends into UT Law School.

UT Law School is supposed to be competitive on a level with Harvard Law and the University of Michigan Law School. When word broke that unqualified candidates were able to get in with help from key legislators, the key legislators went ballistic, immediately calling for Hall's impeachment and removal from office, even though only two elected officials, a governor and a judge, have ever been impeached and removed from office in the history of Texas.

The loudest voice in the Legislature calling for Hall's head, Waxahachie House Republican Jim Pitts, turned out to be the father of a young man whose admission to the law school was at the center of the controversy. Pitts has since announced he will not seek re-election.

Two months ago the head of the university's admissions department resigned abruptly, days after an internal whistle-blower emerged on the admissions issue. The admissions question has been turned over to a major international private investigations agency.

A special committee created for the express purpose of impeaching Hall made the mistake of hiring an honest law firm to investigate charges that Hall had broken the law or violated the oath and terms of his office. The firm brought back a report saying he had broken no laws and was carrying out his duties as a regent.

The impeachment committee, undaunted, paid half a million dollars for a second opinion, buying itself a second report that also found Hall innocent of violations of law but said he should be impeached anyway for snitching. Ultimately the committee was unable to find grounds for impeachment -- apparently snitching is not really against the law -- but the committee voted anyway to censure Hall for what amounted to disloyalty and bad manners.

The committee's final resolution read like they were banishing him from membership in the Kappa Alpha House. The committee solemnly found Hall guilty of acting in a "manner that detracts from, rather than enhances the public image of UT Austin" and in "a manner that does not nurture" UT Austin. No mention was made of the committee members whose kids slipped into UT Law School through the back door.

Four months ago allegations against Hall were presented to the Public Integrity Unit of the Travis County District Attorney's Office, the same body that recently won indictments of Governor Rick Perry. At that time a spokesman said the unit would know within a week whether any criminal charges would be brought. The matter is still hanging over Hall, and the unit had not yet made up its mind, according to a spokesperson.

And maybe all of that is Austin politics. But what is to be said for the Texas press and its handling of the Wallace Hall story? Every major newspaper in the state has either called for Hall's head at one point or questioned his integrity, most of them basing their complaints on an allegation that Hall asked for too much information from the university -- in other words, that he did too much reporting.

At one point UT-Austin President Powers testified to a legislative committee that Hall had demanded 800,000 pages of documents from the university at a cost to the university of $1 million. Over coffee in Dallas, Hall gives his version, which is that the 800,000-page, million dollars worth of documents story is a lie.

Hall says he was disconcerted when his first few simple requests for public documents from UT administration were answered with long stories about how difficult it would be for the university to produce such information. Hall asked his fellow regents, "Why don't we get all of our existing open records online?" They agreed it was a worthy idea, but the administration told Hall it would take a very long time to do that.

"Why can't we get this done sooner?" he asked. He says they said to him, "'Well, it's going to take a lot of people.' I said, 'Why? How many people?'

"They said, 'We don't know.' 'Well, why don't you know?' 'Because we don't know how much stuff there is.'"

At that point Hall had a new idea. By then he had figured out that the university's previous public information requests and the documents produced in response to them were somewhere in hard copy, in file boxes, not scattered across the digisphere in countless bits and bytes.

"I said, 'Let me see it. I want to physically see what we're talking about so I can do my assessment on how hard this is going to be."

When Hall finally got the administration to put all of the documents in a small room, the alleged 800,000 pages, supposedly produced at a cost of a million dollars to satisfy Hall's egregiously over-reaching public information demands, amounted to 40 file boxes.

Stacked about four boxes at a time on a two-wheel dolly, that would require 10 trips into the room if only one person were available with a dolly, five trips if two were able to show up with dollies.

The other part of the joke is this: Any experienced reporter who has worked with public information demands and large public institutions has run into just the opposite trick. You ask for one file, and when you show up to see it they have placed 40 boxes of files in the room, daring you to find the needle in the haystack. Shoveling file boxes around on dollies is what bureaucrats do all day long.

But two more aspects of this request are important. First, the documents Hall found in the boxes were public information requests and responses to those requests, but his request to see the boxes was not a public information request. It was a "regental" request, made by a regent for internal information he deemed germane to his duties as a regent. As the first impeachment investigation report made clear, a regent can ask to look at pretty much any information he wants to see.

Secondly, Hall told me the amount of information was nowhere near what Powers and his staff claimed. "It happened to cover about 100,000 pages of documents, more or less," he said. "It wasn't 800,000 pages."

That feels like the sort of thing beat reporters in the capitol covering the story from the beginning should have been able to discover early on, perhaps by asking Hall what he was doing. Instead, the establishment press parroted the charge brought against Hall by detractors that he was asking too many questions and for too much public information -- an accusation especially strange when brought by the press.

Last February The Houston Chronicle asked in an editorial, "What can micromanagement look like? Piles and piles of papers delivered in response to document requests made by an individual regent -- in this case, UT Regent Wallace Hall Jr. -- is one sure sign. When regents overstep, they distract and discourage talented leaders."

A month later under the headline "UT Regent Hall Is an Embarrassment," the San Antonio Express-News said in an editorial, "[Governor] Perry, of course, could end this circus by calling for Hall's resignation. We're waiting."

Last May The Dallas Morning News asked in an editorial, "In short, where exactly is the line between aggressive watchdog and overbearing, possibly illegal pain in the neck? And did Wallace Hall cross it? In the end, the answer is what really matters."

Being the Morning News, they didn't say what the answer was.

Had reporters for big powerhouse dailies of Texas asked Hall, they might have learned what two independent reporters did when they asked Hall what he was finding. Hall had come across internal UT emails, either naming no one or with names redacted, indicating some kind of serious monkey-business between the university and certain key legislators about admissions to the law school.

On August 21, 2013, Kevin Williamson, a reporter writing in The National Review, a conservative semimonthly publication founded by the late William F. Buckley Jr., published a story based on a phone call to House Appropriations Committee chairman Jim Pitts. In that call Williamson bluffed Pitts into admitting that his own son Ryan Pitts was one of the low entrance exam scorers who got into the UT Law School through the back door, after Pitts himself had interceded for him.

Pitts launched a vituperative attack on Hall, accusing him of leaking legally protected information about a student, his son, to Williamson, which Pitts insisted was a crime. But the day after Williamson's story appeared, Pitts announced he was retiring from the Legislature.

A week later a story by Reeve Hamilton in The Texas Tribune provided Pitts a podium from which to make an unchallenged defense. He admitted writing a letter asking the law school to admit his son, but he told the Tribune, "Did I ever call for my son -- or the over 100 people I've recommended over the years -- and ask for special treatment? No, I did not."

The Tribune story said Pitts "added that writing such letters has long been standard practice for lawmakers at the Capitol." And there The Texas Tribune, which has received six-figure gifts from the university system, let the matter rest.

Eight months later in a triumph of virtuoso investigative reporting, Jon Cassidy, writing for Watchdog.org, an online news service sponsored by a conservative foundation, laid out the real back story of the law school admissions racket. Pitts had told the truth about one thing: It was standard practice.

In an ingenious use of public information laws and law school application procedures, Cassidy was able to expose an entire cadre of candidates admitted to UT law school in spite of startlingly low scores on the national Law School Admission Test (LSAT), many of whom graduated somehow, but, unlike almost anybody else at UT Law School, kept flunking their bar exams after they got out.

Of these, 15 of the names unearthed by Cassidy were of students directly linked to officeholders, either by blood, influence or money. Cassidy reported that a large number of ringers came from the district of state Senator Judith Zaffirini, former chair of the state higher education committee, including her son Carlos Manuel Zaffirini Jr. Many were connected to House Speaker Joe Straus.

Zaffirini and Straus, blaming the disclosures on Hall, raised the call for his impeachment and removal from office. They also demanded that criminal charges be brought against him for disclosing what they claimed was legally protected student information.

Cassidy and Williamson offer interesting insights into what caught their eye and why they covered the Hall story so hard while the daily press was satisfied with official statements. Cassidy said the alarm bell for him was "the obviousness of the pretext, the fact that they were saying he was asking for too many records.

"How could people take that seriously?" he asked. "I know a lot about public records. If you had to estimate how many pages of paper the state of Texas creates a year, I would say it's about a billion. And here the whole of official Austin is getting worked up over an amount of paper that means a couple of interns have to work on a Tuesday evening?" Cassidy said his instincts as a reporter told him the transparently false pretext was smoke from a deeper fire. "It tells me that somebody is acting in bad faith," he said.

Williamson, the reporter at The National Review, said in an email: "The Texas dailies have fallen down on the job covering this story, mainly because reporters perceive this as a confrontation between Rick Perry and the University of Texas, and they are reflexively hostile to Rick Perry.

"I've spent most of my life in the newspaper business, and I know bias when I see it: If there were a suggestion that Rick Perry were twisting arms to get family members into A&M, it would be on the front page of The Austin American-Statesman. But when the malefactors are UT administrators and the whistle-blowers are Perry appointees, reporters in Austin, Houston, Dallas and San Antonio become strangely incurious."

Hall was not incurious. Going through those 40 boxes, he also found the ball the administration had been trying so hard to conceal about the law school slush fund: "In October of '11," Hall says, "three male faculty members in the law school made an open records request through the Texas Public Information Act, which, seeing where I am now, took a lot of courage for those men. It opened them up to criticism and being thrown out of the club. They requested all the compensation information from this forgivable-loan program. UT had to give it to these professors."

From that point on, Hall believes, the university's preoccupation was with quieting that matter before it went public. The problem, he says, was that keeping the slush fund secret violated several major policies and maybe state law.

"The provost at the university is supposed to see all faculty compensation [but] was excluded from being able to see this compensation.

"They had a budget committee within the law school, which determined who gets offered a position as well as salaries and or compensation. This budget committee was, apparently, intentionally kept in the dark on who got these funds."

Instead, millions of dollars in the private funds were divvied up by the dean of the law school as forgivable loans to a chosen few on the faculty, including himself. "So you can imagine," Hall said, "how all the power gravitates to the chair, the dean. There were a few of these professors who got two of [the loans], sometimes the same year."

The justification for the forgivable loans was that UT Law School had to hand out this money in order to keep valued faculty from taking offers elsewhere. But Hall said, "There is no evidence, no empirical documentation to suggest the reason was because you had a bona fide job offer at another university or anything else. It could have been, 'You're my friend.'

"It was a dark pool of money that a few people had access to."

That issue is now with Attorney General Greg Abbott. No one is hugely optimistic that the Abbott, in the midst of a campaign for governor, will be aggressive about an issue that promises to upset a great many powerful lawyers in the state, but Hall is gratified, he says, that the question of the slush fund is still open.

Because the Public Integrity Unit of the Travis County district attorney hasn't made up its mind yet, the possibility of criminal charges still hangs over Hall, at least theoretically. The censure imposed on him by the failed impeachment committee had no legal meaning.

One member of the board of regents has called for him to resign anyway, but others have staunchly defended him and castigated the impeachment committee for dealing a gratuitous slap instead of an apology. He says he will not resign and will serve until his term ends in 2017.

Of the entire remarkable experience, Hall offers one summary: "In all of this, nothing surprised or disappointed me more than the role of the press." And with that he's off on the BMW again, looking entirely OK with the ways things have turned out.

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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze