The Capitol gossip machine has worked overtime since Thursday’s explosive Senate Finance hearing, but Chairman Steve Ogden vehemently denies any coordination with the Governor’s office to ambush former UT Regent Robert Rowling.
Everyone who hasn’t had a paper sack over their heads knows by now that Dallas billionaire Rowling quit under tough questioning about $3 million in bonuses awarded to UTIMCO’s management, despite investments taking a swift downturn this all in the Permanent University Fund and General Endowment Fund. (UTIMCO management defended the bonuses, noting they were payment for an earlier period in which the funds did better than other colleges’ investments.)
Rowling quit in exasperation in the middle of tough questioning by the Senate Finance Committee last week. The day previously, UTIMCO, which he chaired, was rebuked about the bonuses in a letter from Gov. Rick Perry and Lt. Gov. David Dewhurst.
It has not gone unnoticed that Rowling recently switched allegiance from Perry to his challenger, U.S. Senator Kay Bailey Hutchison.
Did Ogden coordinate with Perry and Dewhurst to ambush Rowling, or prompt the two to send the letter, which was highly critical of the bonuses?
“Hell no,” Ogden said. “It wasn’t me and him (Perry) plotting strategy. I didn’t even talk to him. I didn’t have anything to do with that letter.”
Ogden said he has been extremely concerned about the state’s investment strategy in all of its big funds – the PUF, as well as the Teacher Retirement System fund, etc. Together, he says, the state has lost $45 billion during the last fiscal year. “This cannot be ignored,” he said.
But Ogden noted that “it wasn’t any big secret” that he was unhappy about the UTIMCO bonuses. For starters, he posted the meeting notice with PUF management on the agenda a week previous to the meeting. He characterized Perry and Dewhurst’s letter as “an independent track.”
Furthermore, Ogden says he called Barry McBee (who represents the UT system before the Lege) to give him a heads up the night before the committee meeting. “I told him ‘you need to get your guys ready because we are going to be talking about the bonuses.’”
At 8:30 a.m. the next day, McBee asked Ogden to postpone the meeting until 10:30 a.m. so that Rowling could appear. “I delayed that hearing at his request,” Ogden said.
It should be noted that the stage was set for acrimony when – despite the advance warning – Rowling declined to give prepared remarks when offered the opportunity by Ogden.
Ogden also said he believes Rowling intended to quit before the meeting even began, and chose to resign in the middle of Sen. Kevin Eltife’s tough questioning. “I think he took it basically as an opportunity to play victim,” he said.
“Under no circumstances could you call that an ambush,” he said. “To a certain extent, UTIMCO is out of touch and doesn’t realize appreciate how serious this is.”
I asked Ogden if he had any plans to change the statute creating UTIMCO. “It depends on what UTIMCO does. When the vice chair reports they are not a state agency, it doesn’t help their cause.” (UTIMCO vice chair J. Philip Ferguson was quoted in the Austin American-Statesman proclaiming UTIMCO’s status as “not a state agency.”)
Ogden’s mood was not improved today when he learned that UTMB had planned to award $3 million in bonuses to management, even as the institution was planning lay-offs. The bonuses were scuttled; some think because the faculty senate exposed the plan.
Bottom line for Ogden? It’s time to watch the bottom line. And he is right that he’s not just picking on UTIMCO – he’s got the same questions for all fund managers working for the state of Texas. Though he notes: “There’s no more powerful entity in the state of Texas than the University of Texas. You are taking on a pretty big dog.”