Wallace Hall Was Right About UT All Along

Page 2 of 3

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.

KEEP THE DALLAS OBSERVER FREE... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
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