To a certain extent, this Texas vs. California roundup is incomplete, since we’re hot and heavy into the new legislative session and I haven’t had a chance to fully digest the proposed budget numbers yet. By the Legislative Budget Boards numbers, they’re only projecting a 1.5% increase in the 2016-2017 biennium budget over 2014-2015. But see the first link…
Archive for the ‘Budget’ Category
Back when the University of Texas Law School “forgivable loan” scandal broke, I said it was for all intents and purposes a slush fund and a serious ethical problem for UT.
I didn’t know the half of it.
For years before a forgivable loan scandal forced him to resign as dean of the University of Texas Law School in 2011, Lawrence Sager was running up annual six-figure bills on a credit card paid for by the UT Law School Foundation.
From 2007 to 2010, Sager racked up $401,498.29 on that card, all of it paid by the foundation, apart from tens of thousands in other expenses for conferences, computers, club dues, food, travel, storage units and other items.
I can imagine numerous scenarios where a UT law school dean could rack up $400,000 in credit card expenses, but most of them involve words like “gambling,” “hookers” and “blow.”
More from Cassidy:
In all, the foundation has spent more than $1 million in compensating and reimbursing Sager. That’s just a fraction, however, of the $68 million the foundation has spread around UT during the past decade, most of it compensating the school’s faculty and administrators.
The question the attorney general’s report does not answer, or even ask, is whether the members of the Law School Foundation have received anything in return for their largesse. Reporting by Watchdog.org has established that many children of generous foundation members have been admitted into UT Law, although there is little evidence that would cast doubt on their qualifications.
More on that “forgiveable loan”:
The report says that “under Dean Sager’s leadership the Law School provided incorrect or incomplete responses to requests for salary information by both University management and the public pursuant to the Texas Public Information Act. To settle a lawsuit, both Foundation and public funds were expended in order to paper over a climate of non-disclosure.”
Scott also faulted Sager for concealing the $500,000 forgivable loan he procured for himself, reporting that “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.”
Keeping two sets of books is a classic indicator of financial fraud.
Thus far I have only skimmed the official Attorney General report on the loan issue (much less dug through all of the appendices), but there are several other questionable practices highlighted, like an unrecorded, $25,000 payment to one faculty member.
As Dallas Observer writer Jim Schutze notes, the state media continues to ignore the scandal regent Wallace Hall uncovered:
Cassidy’s and Williamson’s reporting was uniformly ignored by reporters and editorial pages of the state’s mainstream media. Most of the state’s major editorial pages joined the exposed members of the Legislature in denouncing Hall. An ad hoc committee of the Texas House of Representatives labored for months to find a way to remove Hall from the board of regents. When their own lawyers told them Hall hadn’t done anything for which he could be impeached and was in fact carrying out the duties of a regent, the committee slapped Hall instead with a gratuitous and toothless “censure,” an act with the legal meaning and gravitas of “fuck you anyway.”
And while he may no longer be Dean, Sager is still listed among UT law faculty.
The report goes to show, once again, that Wallace Hall was right about the need for tighter and deeper board oversight at UT. And that UT’s stables still haven’t been fully swept out…
Here’s your first Texas vs. California update of 2015:
This is all the result of the regents’ irresponsible oversight. In 1990, UCRP had 137 percent of the assets it needed to meet its obligations, so regents suspended employer and employee contributions to the pension fund. State legislators also stopped allocating money to UCRP. This “pension contribution holiday” lasted 20 years. To top it off, during this period, university officials boosted pension benefits a half-dozen times. By 2012, more than 2,100 UC retirees were each collecting six-figure pensions for life.
(Hat tip: Pension Tsunami.)
— HeisenbergHattie (@HBergHattie) January 4, 2015
Just because the European Debt Crisis hasn’t been in the headlines much as of late doesn’t mean it’s gone away.
Greece’s government has fallen again and they’ll be holding general elections next month. “Opinion polls point to a victory by the radical leftist Syriza party, which wants to wipe out a big part of Greece’s debt, and cancel the terms of a bailout from the European Union and International Monetary Fund that Greece still needs to pay its bills.”
The problem is that Greece wants to continue spending other people’s money to prop up a bankrupt welfare state, and the rest of Europe has decided they would really prefer to stop pouring money down that particular rathole. Syriza is against “austerity,” which is to say they oppose the Greek government even pretending to practice fiscal restraint. Because pretending is all they’ve done.
Remember, real austerity is reducing outlays until they match receipts. All those “austerity” street protests were over lowering Greece’s budget deficit from 9% of GDP to 7.5% of GDP. The rest of Europe didn’t ask them to stop digging their own grave, they just asked them to dig more slower. And this year, Greece’s budget deficit stood at 12.2% of GDP. Evidently even fake austerity is too much to ask of them; even the illusion of fiscal restraint is intolerable. This is why all news that Greece has “balanced” next year’s budget should be taken with several grains of salt.
So we’ll see another election, and if Syriza wins we’ll see another round of demands for more bailouts and debt writedowns, with Greece threatening yet again to exit the Euro. We’ve seen this movie before. The most likely outcome is that another cabal of EU-phillic insiders in the Greek government will engineer a last-minute cave-in to demands from Brussels and Frankfurt, ram another toothless austerity measure through parliament in exchange for still more credit (and perhaps even a small symbolic measure of debt forgiveness), dissolve the government again following the inevitable public outrage, then have the Greek bureaucracy ignore even those woefully inadequate reforms, setting the stage for the farce to repeat itself in another 12-18 months, or until mean old Aunt Angela finally cuts up the credit card.
Europe has had several years to acclimate itself to the fact the Greece might exit the Euro, and the possibility of a “grexit” has been priced into the markets for some time now. I do not pretend to understand the intricacies of the European banking system, but my impression is that much of the “stress testing” of European banks this year was to prepare for one or more of the PIIGS leaving the Euro. I suspect that the European elite have minimized their own exposure to a Greek default (which is really all they care about), and that the EU and the European Central Bank has found new, sneaky ways to put taxpayers on the hook for any possible sovereign defaults, strengthening the banking system without addressing Europe’s long-term economic problems (unsustainable levels of debt to support cradle-to-grave welfare states for shrinking populations).
It would be great if Greece actually undertook real structural reforms of their bloated, dysfunctional government, but I see precious little evidence that they’ve actual done so. Expect more pain ahead, and at least one more bailout…
It’s another Texas vs. California update!
In recent years, daily examples of faithful public service inside the Newport Beach Police Department (NBPD) have been overshadowed by alarming corruption. City officials ignore or downplay the misconduct, but NBPD bosses turned the agency into a darker, stupider version of Animal House. Court records and internal documents show the city’s boys in blue have accepted gratuities in exchange for favors, gotten frat-boy drunk at work, lied under oath, passed out confidential information to pals, encouraged oral sex from female job applicants, committed wild adultery on duty, doctored official reports, hurled feces, dished out horrific domestic violence against wives and girlfriends, engaged in intoxicated bar fights, issued criminal threats, vandalized property, converted powerful agency spy equipment to personal use, and rigged promotion systems to ensure mostly see-no-evil, management-loyal employees rise–and let the hijinks continue.
Plus open war against whistle-blowers.
Finally, in case you missed it a few days ago, three Texas budget links from the Texas Public Policy Foundation: