Barry Burgdorf

UT System Regent Wallace Hall

On Tuesday of last week, Student Government passed a joint resolution with the Senate of College Councils approving a vote of “no confidence” against Regent Wallace Hall, who is currently under investigation by the House Transparency Committee for abusing his powers as a regent. The resolution proclaimed to pass no judgement on Hall’s guilt in “whatever actions and crimes are alleged against him." Ultimately, it is little more than a student government assembly-approved proclamation that students, too, are fed up with Hall’s behavior. 

But the resolution is yet another indicator that the long-simmering tensions between the Board of Regents and UT-Austin are now being kept on the burner by the actions of a single man: Hall himself. If that’s the case, we’d just as soon that Hall resign and take the drama with him, though given his past behavior, we’d expect nothing less than his stubbornly standing his ground to the detriment of the entire UT System. 

Initially, the conflict over Hall’s massive open records requests was viewed as an extension of the board and System’s alleged attempt to oust President William Powers Jr.  In response, the legislature, particularly Rep. Jim Pitts, R-Waxahachie, called for articles of impeachment to be brought against Hall. But as the initial exploratory investigation of the Committee has progressed, the idea of a board and System united in conflict with UT-Austin and Powers appears to be cracking.

Last month, the committee heard from Barry Burgdorf, previously a UT System vice chancellor and general counsel. Burgdorf testified to conflict between the board and the System, particularly where Chairman Powell’s hands-off style of leadership, which gave Hall free range to pursue individual investigation, was concerned. Burgdorf also spoke of Hall’s treatment of System staff, which he characterized as “like hired help.” 

More recently, the committee also heard from current UT System general counsel Dan Sharphorn, who said that he was “sympathetic” to the enormous workload Hall’s requests had caused among UT-Austin employees and that he thought that some of Hall’s requests were unreasonable.

The Board of Regents itself seems to be shifting toward a similar stance. Testimony from Francie Frederick, legal counsel to the board, seemed to mirror that of Sharphorn, purporting that a regent needed a “legitimate educational purpose” to request FERPA-protected documents, as Hall has done.

Frederick said she thought Hall, while a “principled man” who was “good at heart,” did not have such a legitimate educational purpose. She added that “distractions over the last several years are beginning to detract from the best interests of the UT System.”

The Daily Texan’s interview with Student Regent Nash Horne — while otherwise filled with so much dodging and weaving that Horne is rumored to be considering a bid for UT’s next star kick returner — seems to confirm this sentiment. In an otherwise vacuous set of answers, Horne called the impeachment hearings a “great thing,” and stated that document requests have taken valuable resources and focus away from other campuses in the UT System.

In large part, the conflict at the board level now seems to center on Hall and his apparently dwindling faction on the board, headed by, or perhaps composed exclusively of, Regents Alex Cranburg and Brenda Pejovich, who abstained from a recent vote to waive attorney-client privilege claims, a move itself designed to communicate to the committee that the rest of the board, as well as the System, was willing to cooperate.     

Some credit for this shift is probably due to a changing of the guard at the head of the board, as the newly-elected Chairman Paul Foster appears to have about-faced on his tie-breaking vote to restart the Law School Foundation investigation that kicked off this most recent mess. Foster has also outlined a plan to revamp the board’s way of conducting investigations, pointedly noting a need to look into “whether the information sought [in an investigation] is necessary and likely to be beneficial to the discharge of a board member’s duties.”

Of course, this picture of Hall as the last man standing might change if his December testimony brings with it the often-rumored, but somewhat less frequently-presented, “smoking gun” against Powers, UT-Austin, the legislature, and whatever Hall feels like “investigating” that day. And the displeasure voiced by members of the Committee at the System’s request to require subpoenas for witnesses suggests that both the System and the board may have a difficult road ahead of them convincing the committee that they don’t want to be lumped into the same basket as Hall. 

But all things considered, we’re glad to see that Hall’s now got his own basket, in the minds of not just the regents, but UT students as well. Of course, we know he won’t resign — putting a stop to this argument before it manages to monopolize the higher education conversation for three whole years would be all too kind — but it’s nice to see that he may not take the whole relationship between UT-Austin and its Board of Regents down with him. 

At a specially called meeting Monday, the UT System Board of Regents voted to address issues of attorney-client privilege that have arisen during the ongoing investigation of Regent Wallace Hall, including waiving the privilege in an unspecified, limited manner as recommended by
outside counsel.

The motion, filed by Regent Jeffery Hildebrand, recommended the board authorize Chairman Paul Foster to seek the opinion of the attorney general regarding the obligations and preservations of attorney-client privilege during the ongoing impeachment proceedings. Gov. Rick Perry appointed Hildebrand to the board
in February.

The board passed the motion with six supporting votes, while regents Hall, Brenda Pejovich and Alex Cranberg abstained. In the meeting, Hall said he declined to vote because of his involvement in the issues discussed in the motion but said he otherwise would have voted against it. Pejovich and Cranberg did not provide reasons for their
abstentions.

Attorney-client privilege allows certain communications between clients and their attorneys to be confidential and remain private, unless a court forces a
disclosure.

Questions about the limits of attorney-client privilege arose last month when Barry Burgdorf, former UT System vice chancellor and general counsel, said he could not disclose certain information in his testimony in front of the House Select Committee on Transparency in State Agency Operations. The committee is currently investigating Hall for overstepping his duties as a regent and conducting a “witch hunt” against President William Powers Jr.  

In his testimony, Burgdorf said “there is a clear intent to get rid of Bill Powers,” but declined to answer other questions on the basis of attorney-client privilege. 

Burgdorf stepped down in March, several months after his review of a UT School of Law forgivable loan program, which concluded Powers was unaware of the program when it was ongoing. Burgdorf said Hall was displeased the review did not implicate Powers in the $500,000 forgivable loan granted to Larry Sager, former dean of the law school

“It’s my understanding that Regent Hall wanted [the report] to be more of a look at President Powers’ involvement,” Burgdorf said in his testimony.

At a specially called board meeting in October, Foster requested a new examination of the board’s responsibilities and treatment of transparency as a result of the ongoing investigation against Hall.“In light of [the recent focus on best practices for state governing boards], I believe today is the right time to begin a new discussion on the best ways this board should operate going forward,” Foster said in the meeting. “I have spent [a] significant amount of time thinking about how we can fully discharge our responsibility in the most efficient and transparent way … I am sure each member of the board has done the same.”

The House Select Committee on Transparency will resume hearing testimony Tuesday and Wednesday, though Hall is not expected to testify.

UT System

Barry Burgdorf gives his testimony regarding the possible impeachment of Regent Wallace Hall at The House Select Committee on Transparency in State Agency Operations meeting Wednesday afternoon. 

Photo Credit: Erica Reed | Daily Texan Staff

A former vice chancellor of the UT System was one of many witnesses Wednesday to testify that UT System Regent Wallace Hall has been targetting President William Powers Jr.

“I think there is a clear intent to get rid of Bill Powers,” said Barry Burgdorf, former UT System vice chancellor and general counsel, at the second day of hearings exploring the possible impeachment of Hall.

Hall might be impeached because he supposedly placed a burden on the University through the filing of multiple broad open records requests with the University. The records request total more than 800,000 pages worth of documents, which some legislators have called a “witch hunt” to oust Powers.

The relationship between the UT System Board of Regents and University administrators has grown tense in the past few years, including in November 2012, when former UT Law School Dean Lawrence Sager received a $500,000 forgivable loan from the UT Law School Foundation. The loan, which resulted in Sager’s removal as dean, prompted a review, which Burgdorf wrote prior to stepping down. 

When some regents were unsatisified with the report, the board voted for an additional external investigation by the Attorney General’s office, after an original decision to hire an independent investigator proved unpopular with the Texas Legislature. Hall’s massive open records requests came in the weeks following this controversy.

Barry Burgdorf, former UT System general counsel, said Hall was displeased with the law school report Burgdorf produced because he thought it was not critical enough.

“It’s my understanding that Regent Hall wanted it to be more of a look at President Powers’s involvement,” Burgdorf said.

In his testimony, Burgdorf said the role of the regents changed when Gene Powell became chairman in 2011.

“Chairman Powell took the view that individual regents had the right to pursue whatever they thought as best, and he did not shape or constrain that,” Burgdorf said.

Burgdorf said he asked Hall about Hall’s motivation for requesting so many documents, but, as the former System counselor, Burgdorf could not elaborate to the committee under attorney-client privilege. 

During his testimony Tuesday, Kevin Hegarty, UT’s executive vice president and chief financial officer, said he expressed concerns at the legality of responding to Hall’s multiple open records requests, but the UT System did not allow him to get outside counsel from the Attorney General’s Office.

Burgdorf said when he was general counsel, he would always grant requests for outside counsel. Rep. Trey Martinez Fischer, D-San Antonio and a member of the House Select Committee on Transparency in State Agency Operations that is conducting the hearings, expressed frustrations that System general counsellor Dan Sharphorn was not there to testify.

Officials have also questioned whether Hall failed to include information about lawsuits he was involved in when applying for the regent position.

Burgdorf said if there is evidence a regent is using his office in a detrimental way, that is grounds for impeachment. During testimony Tuesday, Rep. Jim Pitts, R-Waxahachie, said he thought there was sufficient evidence to impeach Hall.

As was determined by the committee in September, Hall’s attorney Allan Van Fleet would not be allowed to cross-examine witnesses during the hearings. The committee will reconvene Nov. 13 to continue discussions and hear testimony from additional witnesses.

Editor’s note: This week, the Texas House of Representatives’ Select Committee on Transparency in State Agency Operations has heard public testimony concerning UT System Regent Wallace Hall’s conduct vis-a-vis UT-Austin. Beginning in the fall of 2012, Hall overwhelmed UT officials with open records requests for over 120,000 documents, leading many at UT and in the state legislature to allege that he was on a “witch hunt,” with the goal of creating sufficient grounds for the dismissal of UT-Austin President William Powers Jr. The Committee will attempt to determine whether, as his opponents have argued, Hall should be impeached and removed from office. On Monday, Tuesday and Wednesday the Committee heard from several witnesses, including lawyers for Hall and the UT System, Rep. Jim Pitts, R-Waxahachie — one of Hall’s most prominent critics — and former UT System General Counsel Barry Burgdorf, who resigned in 2013 after submitting a report on unfairly favorable loans granted to UT law school faculty. Burgdorf claims he was encouraged to leave after several regents, Hall foremost among them, wanted his report to lay more blame at Powers’ feet. What follows are some of the hearings’ highlights.

“It’s the first real hearing, but we don’t have a clue what’s going on ... It’s kind of like they’re throwing an impeachment, but we’re not really invited.”

-Allan Van Fleet, lawyer for UT regent Wallace Hall on Monday

“It will be a step toward public disclosure as to what happened and description from live witnesses, as opposed to people announcing their own side of the issue ... The committee’s name is ‘transparency,’ and I think the public will get a chance to look and see what happened and judge for themselves, as will the committee.”

-Committee special counsel Rusty Hardin

“In my opinion Mr. Hall has gone on a fishing expedition in hopes of finding something, anything with which he can use to oust President Powers. If he was truly trying to measure compliance, why would he only target one institution out of the fifteen in the University of Texas System?”

-Rep. Jim Pitts, R-Waxahachie, on Tuesday

“Are regents above the law? Transparency in government does not trump the privacy of those involved.”

-Pitts on Tuesday

“We do not have to show Mr. Hall broke the law, we only have to show misconduct and abuse of power.”

-Pitts on Tuesday

“I do believe that there is enough evidence to show that Mr. Hall should not be allowed to continue in his current capacity as a regent.”

-Pitts on Tuesday

“The chancellor [Francisco Cigarroa] met with me and told me that Regent Hall was unhappy with me and the regents aligned with him were unhappy, they were going to make my life difficult.”

-Former UT System general counsel Barry Burgdorf on Wednesday 

Texan In-Depth

UT President William Powers Jr. sits with Sarah and Ernest Butler in a 2008 photo after the couple's bequest of $55 million — the largest contribution to a public university's music school. The College of Fine Arts' School of Music was named in their honor (Photo courtesy of Christina Murrey).

Read the University External Foundations Profiles to learn more about the history and financial figures of each foundation.

Recent public battles over lack of oversight in the University of Texas Law Foundation threaten to bring substantial changes to a complex mechanism of private fundraising developed over several decades that has successfully raised billions of dollars alongside internal fundraising efforts.

As early as next month, an advisory task force led by UT System Regents will present guidelines for a uniform structure and record-keeping procedures for all external foundations to avoid situations where UT employees receive direct benefits from external sources without administrative oversight. University fundraising is divided among internal development operations and a handful of external foundations set up as non-profits with independent governing boards.

External foundations raise their own funds and contribute to the University but have limited involvement or oversight by UT administrators.

College, school and unit specific endowments total $3.1 billion, according to development office numbers. The total net assets of the actively fund raising external foundations total $341.9 million, according to IRS documents.

In an email to The Daily Texan, Regent Alex Cranberg said the task force’s review and report will help prevent oversight problems similar to those encountered with the School of Law Foundation.

The regents commissioned the task force following a report by Barry Burgdorf, System vice chancellor and general counsel, on the relationship between the School of Law and the School of Law Foundation — one of the external foundations affiliated with the University. In 2011, Lawrence Sager, then dean of the University of Texas Law school, was asked to resign by President William Powers Jr. after receiving a forgivable $500,000 loan from the UT Law Foundation without administrative oversight. Fallout from the foundation’s loan program resulted in Burgdorf’s report, but in a contentious vote that drew criticism from state lawmakers, the regents decided to pay for another external investigation specific to the Law School Foundation. Burgdorf resigned amid the contentions, and declined requests for comment.

The regents agreed to let the Texas attorney general’s office handle the investigation after pressure from lawmakers, and Cranberg said that scrutiny is distracting from the purpose of the committee’s review.

“The context in which individual foundation oversight efforts have been made is in fact being overlooked,” Cranberg said. “This context is the demonstrated potential abuse of private foundations that are affiliated with public institutions not just at UT, and not just in Texas.”

Cranberg said the lack of clarity on the relationship between external foundations and the University can leave donors misinformed.

“Another issue is that many donors do not realize that they are giving money not to the University of Texas, or to a publicly accountable charity, but rather to a private foundation which is not subject to the same oversight or guidelines,” Cranberg said. “Sometimes donors prefer the greater flexibility that private foundations have, but this preference should be fully informed by disclosure of the options and trade-offs associated with giving to a private versus a public entity.”

Cranberg has a history of identifying flaws between foundations and the institutions they serve. He was involved in identifying “abusive practices” within an external foundation that serves three institutions during his time on the board of Metro State College in Denver regarding the sale of two building below market value.

Cranberg also said the work of private foundations and their contributions is important and of “unquestionable integrity.”

Shannon Ratliff, former law foundation trustee and former UT System regent, said he hopes the law foundation will maintain its independence from the University.

“It would be a shame if there was any sort of pressure to try to terminate the foundation or try to control it, because the one advantage of the foundation has been that it’s not an arm of the state,” Ratliff said. “It has always been to the University’s advantage for well-intentioned people to be able to act independently.”

The task force is also expected to recommend guidelines for the locations of external foundation offices and foundation employees. UT administrators serve as directors or serve on the board of some external foundations and some foundations also share employees with the University, including professors and administrative support.

In the event of a court case, some foundations, although they are separate nonprofits, can be deemed branches of a university if they share office space, employees, public funds or state legal services, Washington attorney Thomas Arden Roha said. The laws that govern foundations vary from state to state, Roha said.

He said arguments over the independence and possible mishandling of foundations tied to state universities are not common, but are not unheard of. Roha wrote a paper in 2000 at the request of the Governing Boards of Universities and Colleges that listed general guidelines for foundations.

“It doesn’t get a lot of press from state universities, the press, or donors because most foundations are well run,” Roha said. “But where problems arise there can be litigation. Court cases can be filed.”

Burgdorf’s report, which was set aside by the Board of Regents, recommended the UT Law Foundation separate itself from the University by moving to its own location and not sharing staff.

But taking those steps wouldn’t necessarily mean the UT Law Foundation is safe from legal repercussions.

“As a general rule, I would say the law is not clear cut. You have to examine each relationship between the state, University and its foundation independently,” Roha said.

The formation of foundations at UT grew from a need to supplement declining state support. State funding currently makes up 13 percent of the University’s operating budget compared to 47 percent of the budget in 1983.

“We used to say that philanthropy was the icing on the cake, but I think now that it’s really more of the gas that drives the engine at a world class institution,” said Julie Hooper, associate vice president for development — the University’s internal fundraising unit.

Each year the University’s colleges and departments receive $343 million in payouts from more than $3.1 billion that has been endowed to the University, Hooper said. She said these endowments help fund scholarships and academic chairs that increase the University’s ability to recruit top faculty and students.

Within the Office of Development a team is assigned to monitoring endowment creation, administration and compliance of both internal and external endowments.

Martha King, executive director of development, said her office oversees 5,237 endowments, including approximately 250 held by the Law Foundation. The McCombs School of Business Foundation and Lyndon Baines Johnson Foundation also have endowments that are monitored by the office, King said.

She said external foundations write their own agreements with donors.

The endowments also allow UT to develop academic programs that rank among the best in the nation, Hooper said.

The Jackson School of Geosciences has the largest endowment of any school at UT, with $432 million and ranked ninth among other earth science schools in the 2010 U.S. News and World Report Rankings.

Some schools at UT are ranked highly despite their smaller endowments. The School of Social Work is ranked seventh nationally, although its $13 million endowment is the third smallest at UT.

The process of networking with the University’s 460,000 living alumni and other potential non-alumni donors requires an army of volunteers in addition to development staff, Hooper said. Each college has its own team of volunteers, most taking the form of advisory councils. These councils, which vary in size from a couple of dozen board members to more than 100, have different roles in the development of UT. 

At the Cockrell School of Engineering, the Engineering Foundation Advisory Board consists of volunteer members responsible for securing most of the school’s endowment and for plans to build a new school, according to assistant dean Jeff Halton. 

“It’s an interesting process where you are able to have people say you need the building, help design the building for the purposes which they want it designed and then give money to make it happen or  ask other people for money to make it happen,” Halton said.

With this 60 year old fundraising model, Halton estimates the Engineering Foundation Advisory Board has raised 75 percent of the  engineering school’s total endowment.

The Cockrell School of Engineering decided earlier in March to discontinue the name “Engineering Foundation Advisory Board” in its near future to avoid confusion, Halton said. The Cockrell School of Engineering is one of the few schools that still has the term “foundation” in the name of its advisory board.

There has been a shift in advisory boards formerly known as foundations to disassociate themselves with that moniker. Halton said the need to distinguish the internal fundraising units from external foundations caused the change. 

The college is late to dropping the “foundation” name according to  Kathleen Aaronson, development director for the  College of Liberal Arts.

“We haven’t been called a foundation in several years,” Aaronson said. “Most schools haven’t.”

The internal fundraising unit for the Jackson School of Geosciences has kept the name The Geology Foundation.

The foundation precedes the Jackson School of Geosciences. The internal foundation, made up by administrators, alumni and geology experts, was created in 1953 to support the former Department of Geology founded in 1888.

The volunteer councils meet biannually, but work with development throughout the year, in most cases to help raise funds, said Michael Oldham, chairman of the School of Nursing Advisory Board.

“You contact the people that you know and know of and encourage them to give,” Oldham said. “Each school has really ramped up and improved the ranks of the development officers. Development officers can call us and say, ‘we’re going to have lunch with an alum, would you come with us?’”

Although the most generous contributors often receive recognition in the naming of campus facilities, small donations make up the bulk of giving, Hooper said.

“We’ve had 48 gifts from individuals more than $5 million, and we’ve had 950,000 gifts in the range of $1,000 or less,” Hooper said. “That’s how these campaigns work. There’s a small number of very, very large gifts and there’s a large number of small gifts. We need both.”

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Regent Stillwell says fellow regents "beating a dead horse" in investigation of Law School Foundation

In what appears to be the next development in the ongoing conflicts surrounding the UT System Board of Regents, the Texas Legislature and President William Powers Jr., individual regents have begun speaking with increased candor about the Board’s decision to seek an external review of the already-investigated UT Law School Foundation.

UT Regent Bobby Stillwell told the Texas Tribune his colleague Alex Cranberg was “splitting hairs” in defending the external review, while Cranberg made references to a potential “cover up” on the part of outgoing System general counsel Barry Burgdorf.

According to the Tribune, Stillwell said the Board should move on from its investigation of the relationship between the UT School of Law and the Law School Foundation.

“There’s no useful purpose to be served by continuing to beat this dead horse,” Stillwell said.

Stillwell also appeared to criticize his colleague’s insistence that an insufficient number of reviews have been conducted. In March, 18 state senators signed a letter to the Board saying that the Board-approved review would be “the fourth review of this matter,” which Cranburg said reflected a misunderstanding of how many reviews have actually been conducted.

“I think whether we’re in round four of one investigation or on the fourth investigation is just semantics,” Stillwell told the Tribune. “The fact is, it’s been going on for the better part of a year.”

In an email to the Tribune on Wednesday, Cranberg maintained that the initial investigation, conducted by Burgdorf, did not adequately address the regents’ concerns about the UT Law School Foundation.

“[The investigation] was so inadequate that I have heard complaints of it being a cover up,” Cranberg wrote in an email to the Tribune.

Burgdorf announced his resignation in March.

In tense meeting, Board of Regents votes to commission external audit of UT Law School Foundation

Update - Reaction from President William Powers Jr. after the Board of Regents' decision: 

"Any implication that what occurred today is [about] not being transparent or forthcoming with information to the System or perhaps to the Regents is simply false.  If that was an implication I think that’s the most important thing to dispel... Executive session is not open and I’m not at liberty to talk about that. But I will say that, again, any impression that there were facts that we were not forthcoming with is simply not true... The Burgdorf report looked into this. The Attorney General looked into this. The audit committee is now auditing. That’s still in progress. We have cooperated and been forthcoming with information at every stage.”

Original story

After an uncharacteristcally heated meeting, the UT System Board of Regents voted Tuesday to continue the investigation of the UT School of Law Foundation’s relationship with the University, including an additional external review at the recommendation of the board's Audit, Compliance and Management Review Committee. The vote passed with a narrow 4-3 margin.

The specially called meeting — held during a period of escalating tension between the regents, the Texas Legislature and President William Powers Jr. — featured several moments of conflict.

The Audit, Compliance and Management Review Committee formerly recommended an external review of the use and management by UT-Austin of funds provided by the foundation to supplement the committee’s investigation.

During the tense meeting, several regents said they were concerned with the use of taxpayers’ money on an additional review. Regent Steven Hicks referred to the $500,000 price tag of an conducting an additional investigation as “beating a dead horse.” Hicks said the System has steered toward a board-driven entity in recent months, and that he did not approve of this shift.

“There have been times in the last two years where not only I have not been proud, I’ve been somewhat ashamed of being a UT regent, and that’s a real travesty to me,” he said.

Regent Wallace Hall defended the committee’s recommendation because he said the System continues to receive documents that were not included in an initial open records request he made recently. The open records request was far-reaching, requesting boxes of University documents over the course of the last 18 months.

In 2011, Powers asked Larry Sager, former dean of the School of Law, to resign after concerns arose regarding the foundation’s forgivable loan program. Though Sager received $500,000 through the program, Powers has said he was not aware of the loan at the time it was made. This assertion was contradicted at the meeting, when Hall said he had discovered evidence that Powers was aware of the forgivable loan and had chosen not to address the matter. Powers denied to reporters that he had been anything less than transparent in his dealings with the regents.

The program was used as a tool to recruit and retain top law faculty from across the country to UT by offering them forgivable loans if the faculty members agreed to stay for a certain number of years. The foundation and its program are funded by UT alumni and other donors. 

 
The Regents' audit committee also recommended setting aside a previous report on the foundation’s relationship with the University released last November.

System vice chancellor and general counsel Barry Burgdorf, who announced his resignation earlier this month, wrote the report, which concluded that the forgivable loan program was conducted in a manner that was “not appropriate.” The report laid out the history of the forgivable personal loan program, which began in 2003 while UT-Austin President Bill Powers served as law school dean. The program was then expanded under Sager.

In the report, Burgdorf recommended permanently ending the program and awarding compensation to faculty through restricts gifts rather than direct payouts during hiring.

At a House hearing on transparency in state operations last week, foundation board president John Massey said the foundation was in the process of phasing out the forgivable loan program and finding new incentive programs to help attract top faculty to the University.

The System created a task force to look into the incident last year and was supposed to provide their results later this spring.

Earlier this week, Pedro Reyes, executive vice chancellor for academic affairs at the UT System, directed Powers to not delete any emails from electronic devices in or accessed by the Office of the President over the course of the audit review of the Law School Foundation.

Regents Hall, Alex Cranberg, Paul Foster and Brenda Pejovich voted in the majority to continue the investigation with an external review, while regents Hicks, James Dannenbaum, and Robert Stillwell voting against continuing the review process.

Cranberg said the external review would provide a more comprehensive view of the events that led toward lapses in governance that have been fixed. Stillwell said he was happy with Burgdorf’s report, which was also reviewed by the staff of the Office of the Attorney General.

Tensions surrounding the Board of Regents have escalated in recent months. In February, after a meeting at which Powers was intensely questioned by the board, Lt. Gov. David Dewhurst and House Speaker Joe Straus relaunched the Joint Oversight Committee on Higher Education Governance Excellence, and Transparency. At the committee’s first meeting yesterday, members requested information from the system required to investigate allegations the board was “micromanaging” UT administration.

The Texas Legislature also recently passed three resolutions honoring Powers. At the ceremony following the resolutions, Dewhurst became emotional, telling Powers “we are lucky to have you.”

I believe in reform, and I know that Bill Powers believes in reform,” Dewhurst said. “That’s why I’m particularly troubled when I see UT regents go around this man. I see them trying to micromanage the system.”

Dewhurst also referred to what he called “character assassination” plots launched against Powers and his family.

In a statement, board chairman Gene Powell said these allegations “surely had to be the result of misinformation and were either incorrect or inaccurate.” Powell, regent Printice Gary and student regent Ashley Purgason were not present at Wednesday's meeting.

UT System General Counsel Barry Burgdorf resigns from post

Barry Burgdorf, UT System vice chancellor and general counsel, has resigned.

Burgdorf, who has served since 2005, could not be reached for comment, but Dan Sharphorn, associate vice chancellor and deputy general counsel, said Burgdorf is leaving to pursue other endeavors.

“He saw opportunities come along, and he has decided to explore them,” Sharphorn said.

According to system spokeswoman Jenny LaCoste-Caputo, Burgdorf told UT System chancellor Francisco Cigarroa that he is leaving to pursue a career in the private sector.

“The chancellor is proud of the work Barry has done here,” LaCoste-Caputo said. “He is sorry to see him go, and wishes him well.”

Rumors of Burgdorf’s departure appeared in late January on an online forum dedicated to UT news and discussion. According to documents obtained by The Daily Texan through the Texas Public Information Act, Paul Casey, System information security analyst, sent a link to the post, which said Burgdorf had been fired, to Lewis Watkins, chief information security officer, three days after the unattributed information was posted.

The UT System Board of Regents took nearly one year to review and address disclosures about loans to the faculty from a foundation established to support the UT School of Law. In December 2011, those disclosures forced the resignation of former UT School of Law Dean Larry Sager.

The time the regents devoted to the issue appears well spent and, in the best possible outcome, their efforts could lead to more and welcomed transparency about UT faculty compensation.

According to a report released the week before Thanksgiving drafted by UT System Vice Chancellor and General Counsel Barry Burgdorf,  in 2009 the University administration, due to budgeting limits, denied Sager a raise he had requested. Burgdorf’s report states that Sager then approached Robert Grable, then president of the UT Law School Foundation, about receiving a $500,000 forgivable loan. Subsequently, the foundation’s executive committee, which oversees the organization’s $111 million endowment, approved Sager’s loan. The foundation’s executive board also approved a slew of others loans to law school faculty members. Sager, who is still a faculty member of the law school, said through a spokesman in a statement issued following Burgdorf’s report that he did not deliberately try to avoid University oversight. But Burgdorf’s report concludes that flaws existed in the approval and reporting of loans from the foundation to the law school faculty members.

So far, the regents in their response to Burgdorf’s review have been careful not to insult the foundation while simultaneously endorsing Burgdorf’s conclusions, which the Office of the Attorney General also supported.

In a carefully crafted statement issued on Nov. 13, the regents wrote, “We express gratitude to the Law School Foundation which has been cooperative and helpful throughout this process. It plays a significant role in supporting the goals of the UT School of Law.” After a Nov. 15 meeting, Board of Regents Chairman Gene Powell issued a written statement that said, “Let me first acknowledge the importance of the extraordinary support provided by UT affiliated foundations and the many additional foundations and nonprofit corporations, as well as the work of countless volunteers working with these entities.  We are grateful to the individuals who participate on these important boards and who contribute their time and generous financial support to advance the missions of UT institutions.”

But Powell’s statement also added that Chancellor Francisco Cigarroa has asked UT administrators “to identify and cease any impermissible direct payments, benefits, or reimbursements to UT employees for their work on behalf of UT from external sources and to assure that external support is not provided in the form of gifts targeted to specific individuals.” Powell also announced the establishment of an advisory task force on the relationship of UT System institutions to UT-affiliated foundations, which will be chaired by Regent Brenda Pejovich, who will be joined by Regents Bobby Stillwell and Wallace Hall, and, among others, UT and Attorney General representatives.

With the regents, the University administration and the AG’s office now somewhat focused on how and when deans may pass out goodies from foundations to faculty members, we believe transparency — apparently long-needed — will enter into the equation. Transparency, when it comes to University governance, invariably represents a step forward.

Last year, Larry Sager, former dean of UT School of Law, loaned himself $500,000 from a private fund used to sweeten employment offers. When a group of disgruntled law school professors filed an open records request that disclosed Sager’s loan to himself and the whole forgivable loan operation, UT President William Powers Jr. asked Sager to step down from his post, and big questions were raised about the methods our law school employs to compete with higher-paying private institutions when recruiting faculty members. While UT may have one of the best law schools in the country, it’s also a public institution and cannot, in trying to compete with private universities, compromise its responsibility to be transparent. Barry Burgdorf, UT System vice chancellor and general counsel wrote in a recent report, “The idea of Dean Sager’s $500,000 forgivable personal loan was his. Obviously, this lack of transparency and accountability is unacceptable and, at a minimum, it creates an impression of self-dealing that cannot be condoned.”

Burgdorf’s report, which the UT System released on Tuesday, determined that the forgivable loan program is not illegal but “inappropriate.” Burgdorf looked into the relationship between the University of Texas Law School Foundation and the University following Sager’s resignation.

Burgdorf’s report found that the forgivable personal loan program began in 2003, while Powers was serving as dean of the law school prior to his appointment as University president. The forgivable personal loan program expanded under Sager “in response to the departure of various law school faculty members ... The report recognized the foundation’s significant role in the School of Law’s development helping supplement faculty compensation and providing adequate funding to retain the top faculty, but determined it inappropriate for a public institution to grant forgivable personal loans to faculty through an independent foundation.” We applaud Burgdorf’s call for sunlight when it comes to the law school because, in the words of former Supreme Court Justice Louis Brandeis, it is the best disinfectant.