Once again, lawmakers in Texas seem ready to challenge the state school board’s role as the manager of investments for a $19 billion public education trust fund that provides aid to school districts statewide.
The moves are fueled by new allegations that some board members acted unethically, and perhaps illegally, in connection with the fund.
Thanks to Gov. Rick Perry, the board held on to its powerful role despite efforts earlier this year to rein in its exclusive say over the Permanent School Fund’s investments.
The Republican governor vetoed a bill in June that would have forced the elected board to seek the counsel of an outside panel of financial advisers. The board currently hires its own advisers to help it manage the fund’s investment portfolio.
Since the spring, however, fresh allegations of conflicts of interest for some board members and their advisers have arisen. Such charges sparked a legislative probe last year and led to the vetoed bill.
These allegations appear seem more serious.
Documents have surfaced suggesting that two current and one former board member may have been involved in influence-peddling. The documents were given to the Travis County prosecutor, who already was investigating the board for a possible violation of the state open-meetings law.
Speaker of the House James E. “Pete” Laney, a Democrat, wants the latest allegations investigated with an eye to recommending action in the next legislative session, in 2003.
“The gaps in the law regarding conflicts of interest are still there,” said Carlos Martinez, the House investigating committee’s general counsel.
Hoping to deflect criticism, the board of education’s chairwoman, Grace Shore, plans to establish a financial-advisory panel for the board this spring. But the panel, which will be picked by the board, is unlikely to satisfy legislators who opposed Mr. Perry’s surprise veto.
“The governor’s veto proclamation suggests that the state board should obtain expert advice in investments,” Rep. Terry Keel, a Republican member of the investigating committee, said after the veto. “This is the very reason why prior problems and conflicts of interest have plagued the current board.”
—BESS KELLER
