(Note to literalists: the Watched column presently contains only a smattering of 'warblogs' because the facilitator of the template-change--Dr. Menlo--is not very familiar with them, and will be adding more as they are sent to him. Also, this blog may contain areas of allusion, satire, subtext, context and possibly even a dash of the surreal: wannabe lit-crits beware.)
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[Watch this space for: Pentagon and Petroleum, The Media is only as Liberal as the Corporations Who Own Them, Wash Down With, and Recalcify]
WARBLOGGER WATCH
Wednesday, July 24, 2002
I was hoping Andrew Sullivan would have realized the depths of the waters into which he so recklessly dove when tackling the threatening UTIMCO mess and removed himself accordingly. Alas, the idiot continues to splash about, making a dreadful spectacle of himself and calling attention to his immense ignorance when charitable souls would rather have looked away out of embarrassment.
Sullivan couldn't help himself, actually. He saw Paul Krugman and the big boys swimming in the deep end and just had to follow. As a corrective to the paleoliberal Krugman, Sullivan today goes to the most credible and least tainted sources: a "former chancellor and former chairman of the board of regents of the University of Texas System" offered space on the pages of the Austin American-Satesman The piece only bears the byline of William H. Cunningham, former chancellor, though it is written in the first-person plural, suggesting Mr. Cunningham needs to reacquaint himself with terra firma.
Allow us to review the "factual data" as presented by Mr. Cunningham:
"* "Bush changed the rules governing that endowment, eliminating the requirements to disclose" all matters related to investment and income. Not true. Gov. Bush was not involved in any decisions related to rules governing university endowments. Any changes in rules were recommended by the vice chancellor for asset management and the chancellor to the entire Board of Regents for their consideration."
This is perhaps true in the narrowest factual sense. As the Austin American-Statesman reported on June 1, 1996: "The University of Texas has created a nonprofit corporation to invest $9 billion of the Permanent University Fund and other UT system assets," though that ignores events the year prior. Here's how liberal scumbag Joe Conason put it in the Febrauary 2000 Harper's: "Determined to secure passage of this far-reaching plan, [regent] Thomas Hicks met with Bush, Lieutenant Governor Bob Bullock, and legislative leaders. 'I paid for a separate lobbyist to make sure that it was done, too,'Hicks boasted last December. It was one of the most significant changes to the governance of Texas made during Bush's tenure in the statehouse and among the first important bills that he signed. With Bush's support and the sponsorship of legislators associated with the governor, the UTIMCO bill passed through the capitol in 1995 with very few questions asked."
The Multinational Monitor of March 2000 reported Hicks spent between $50,000 and $100,000 on lobbyists to proselytize on behalf of the bill. To help Lil' Andy get his head around those numbers, $100,000 is twice what Krugman was given by Enron, or more than 13 times the pittance PhRMA offered you. [The market being the best gauge we have for human worth, Krugman seems over 6.5 times the man Sullivan is, a criminal underestimation in my view.]
"* Bush "privatized university assets by transferring them to a nonprofit organization known as Utimco." Not true."
Again, Mr. Cunningham is playing word games of the crudest sort, not even correctly excerpting Krugman's piece, in which the word privatized is placed in quotes and attributed specifically to Bush. Krugman chooses his words judiciously. The "president" chooses them without heed to, and possibly knowledge of, their meaning. The imprecision is solely on Bush's part.
"* University endowment money "was put under the control of Utimco's Chairman, Tom Hicks." Not true."
Nice to see the selfless Mr. Cunningham so willing to jump on grenades and spare the platoon leader. He notes that all private equity (but one class of investments of many) investments were vetted by the UTIMCO board as a whole. Let us note then the following remarkable symmetries of interest between Mr. Hicks and the board, these examples being reported in the March 21, 1999 Houston Chronicle:
"Almost a third of the $ 1.7 billion directed by UTIMCO, $ 252 million, has been committed to funds run by Hicks' business associates or friends. Another $ 205 million has gone to five funds run by major Republican political donors...In one case, Hicks insisted that UTIMCO increase by $ 10 million an investment commitment to a company in which he had an indirect financial interest" [an investment that was scuttled at the last minute]"
"The UTIMCO staff recommended in June 1996 that the board commit $ 15 million to The Beacon Group III-Focus Value Fund, L.P. But Hicks insisted the amount be raised to $ 25 million, according to board minutes."
"Beacon received $ 15.6 million from UTIMCO before the staff discovered a "back-door" conflict of interest that violated state law and halted further investments with Beacon. Long refused to say what the conflict was."
"According to SEC records obtained by the Chronicle, Hicks sat on the board of directors of Stratford Capital Partners, which along with The Beacon Group in 1996 was buying a chain of movie theaters. Stratford is an affiliate of Hicks, Muse."
"Hicks in January 1998 signed a conflict-of-interest statement saying he had no "personal or private interest" in the Beacon investment. At the time Hicks signed that document, Stratford and Beacon owned $ 52 million of the theater chain stock."
And lest you think these were somehow aberrational, consider the opening paragraph to a July 11, 1999 Dallas Morning News piece: "Tom Hicks handles public dollars by the hundreds of millions. But sometimes he's not sure it's worth the trouble - ethics controversies have arisen at three of the largest government entities he's worked with."
"* Due to Bush's alleged changes in investment rules "these investments were hidden from public view." Utimco does not operate in secret. Board meetings are open to the public in accordance with the state open meetings law."
As of the preparation of the above Chronicle article (i.e., when Bush was still governor), "UTIMCO's investments were made in closed-door, off-campus meetings - including one in Hicks' boardroom at the Ballpark in Arlington." Recall from Krugman's piece that Bush's $606,000 investment in the Texas Rangers yielded $14.9 million when the franchise was sold to Hicks nine years later.
The last factual Mr. Cunningham offers is worth quoting in full.
"* The investments that were created by UTIMCO "seemed to have done quite badly." Utimco has made a large number of investments. While some of them have not turned out as well as the board had hoped, others have been quite profitable. UTIMCO's overall investment record has been profitable for the people of Texas. The most recent data indicates that during the first six months of 2002, The University's general endowment fund had lost 2 percent, which was substantially better than most market indexes over the same period."
Mr. Cunningham's report on performance is very helpful in evaluating the returns generated by Mr. Hicks - who stepped down in 1999. I suspect Sullivan didn't even notice. posted by Anonymous11:49 PM
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