Texas school board members charged with violating open-meetings act

By The Associated Press

09.03.02

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AUSTIN, Texas — Two members of the State Board of Education and one former member have been charged with violating the state's open-meetings laws after an 18-month grand jury investigation.

A Travis County grand jury on Aug. 29 indicted board members David Bradley and Joe Bernal and former board member Bob Offutt on two misdemeanor charges.

The elected board's responsibilities include managing the $17.4 billion Permanent School Fund, which sends money to Texas' public schools.

"Because of the huge amount of public money that's involved, it's especially important that members of the State Board of Education who are managing that money comply with both the letter and spirit of the open-meetings act," said Jim Connolly, assistant county attorney.

The charges stem from a lunch the three had at a popular New York-style deli in August 2000 with three financial advisers. The three advisers — Joe Alderete, Russell Stein and Brian Borowski — also were indicted.

All six are charged with conspiring to circumvent the Texas Open Meetings Act and holding a closed meeting. The misdemeanor is punishable by a fine of up to $500 and six months in jail.

"I am disappointed that after cooperating and waiting for the county attorney that he is now, two years later, pursuing a false misdemeanor charge. I am confident that when the facts are told again that I will be cleared of any misdeed," Bradley told the Associated Press Aug. 30.

Numerous calls by the AP to the others were not immediately returned. Board Chairwoman Grace Shore also did not immediately return a message.

Bradley said last month that he believed the investigation by Democrat Travis County Attorney Ken Oden's office was politically motivated.

Bradley, a Republican from Beaumont, is running against Democrat Richard Hargrove and Libertarian William McNicoll in the general election for the District 7 seat on the board. Bernal, a Democrat from San Antonio, is unopposed this year. Offutt, a Republican from San Antonio, lost in the 2000 primary.

At the time of the lunch, the three board members were on the board's finance committee and would have constituted a quorum of the committee.

Bradley's attorney, Rusty Hardin, told the Austin American-Statesman that the men ate at Katz's Deli and Bar that day but said it was not an illegal meeting.

"How can you have a closed meeting in a public restaurant, where other members of the public are present?" Hardin said. "They were not conducting official business at that meeting, or that lunch."

Three Texas Education Agency employees saw one board member dining with a financial adviser, and the other two members dining with other advisers at a nearby table, according to a report by the House General Investigating Committee, a bipartisan group of lawmakers that is still looking into the issue.

The employees said they saw documents on both tables pertaining to the hiring of money managers and reported seeing members reviewing reports.

Later that day, the full finance committee screened applicants for consultant positions to invest a portion of the school fund. The full 15-member board ultimately awarded contracts to manage $3 billion in taxpayer money based in part on the committee's recommendations.

To prove an open-meetings violation, Oden must prove that the six knowingly and willingly violated the law beyond a reasonable doubt, said Lubbock attorney Don Richards, a board member of the Freedom of Information Foundation.

The education board, particularly its handling of the school fund, has been under the microscope for several years.

Oden's investigation into the matter started in fall 2000, and last legislative session, the state auditor and the House committee accused the education board in separate reports of a lack of financial expertise. Some members also were accused of having adversarial relationships with TEA staff and conflicts of interest with money managers.

The grand jury will continue to hear testimony regarding allegations of conflicts of interest and improper use of influence regarding investment decisions about the Permanent School Fund.

Peggy Venable, director of the conservative Texas Citizens for a Sound Economy, believes opponents of the board are trying to distract attention from the member's protection of the school fund during a state budget crunch.

"These efforts are being engineered by several legislators who have been eyeing the $17 billion fund as a potential revenue source to pay for their overspending," Venable said.

Schoolteacher and supporter of the indicted board members Donna Garner agreed.

"The powers that be don't take kindly to principled State Board of Education members who have stood up and said, 'No matter what you do, you politicians are not going to take this Permanent School Fund money out of our children's hands,' " Garner said.

Messages left with the leaders of the House committee — Reps. Terry Keel, R-Austin, and Pete Gallego, D-Alpine — were not immediately returned.

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