By Jeff Horwitz
Two members of the Texas State Board of Education have received thousands of dollars in gifts from a company seeking a lucrative contract with the board records show and those members have not reported the gifts on financial disclosure forms.
Bidding documents submitted to the board by the company AEW Capital Management of Boston say its employees bought 53 gifts worth more than $5000 for board finance committee members Rene Nuez D-El Paso and Rick Agosto D-San Antonio.
Since 2006 the gifts included golf games wine tours dinners and souvenirs. One line item showed that Agosto received $220 worth of Big 12 Championship Tix and $324 for Golf Caddy Fees & Tips. Another said the firm spent $729 to host Nuez at a USC v Ohio Event.
Agosto said he had not seen AEWs disclosure which was made in response to a Request for Qualifications from the board. Asked if he should have reported the gifts Agosto declined to comment.
Nuez a 20-year veteran of the board said Thursday that he believed the gifts were made to him as a private investment marketing consultant and not as a board member.
I had no idea he the AEW representative was reporting it Nuez said.
Not reporting such expenditures is a common practice Nuez said. In 90 percent of the cases we dont put anybodys name on any report.
He suggested that some of the disclosures may have been fabricated. Sometimes they put names in there just to cover their expenses. ... I dont know if I was there or not he said. At my age 68 I dont know what happened a year ago.
Nuez also expressed incredulity at the amounts listed for some of the gifts. Regarding the USC v Ohio Event a football game theres no way a ticket could cost $700 he said.
He said an AEW representative extended the invitation informally. He said Hey you want to go to the Ohio State game? I thought I was going as a friend. I had no idea I was going as a trustee.
Because he thought the gifts bore no relation to his board membership Nuez said he did not report them. And he vowed to return a golf shirt AEW gave him.
Its still in the package he said. Im going to send it back.
Looks bad
Steve Corkin AEWs client services director said the company will check its records for errors. The company had no comment on its reasons for making the gifts to Agosto and Nuez.
Board member Bob Craig R-Lubbock said lack of disclosure reflects poorly on the board. It looks bad Craig said. You just have got to be totally clean and
transparent. We have a fiduciary duty to the citizens of the state of Texas.
The 15-member elected board is in the process of allocating $1.2 billion for real estate investment firms to manage lucrative work for which more than 90 firms have submitted their qualifications. AEW is among them.
AEWs disclosure forms were provided to The Dallas Morning News by a member of the state board. This member requested anonymity because it is board procedure to withhold such information until contracts are awarded. But because of the appearance of possible impropriety the board member said the existence of the gifts ought to be public.
Board member David Bradley chairman of the finance committee said the records should not have been released. Any information that is released in those ... is confidential he said. That unnamed board member having a political agenda has violated the very same ethics policy and procedures he is talking about.
Bradley R-Beaumont cited a reminder issued last week by the general counsel for the Texas Education Agency declaring that state procurement statutes prohibit public disclosure of proposal information before a contract is awarded.
AEWs filings do not detail the circumstances under which the gifts were given. But based on their timing a number of them appear to have been presented at institutional investment conferences Nuez and Agosto attended as representatives of the Permanent School Fund.
The $20.5 billion school fund is partly overseen by the boards finance committee of which Agosto and Nuez are members.
Neither disclosed the gifts from AEW in their filings with the Texas Ethics Commission. There is a requirement under government code section 572 to disclose gifts that are over $250 said Tim Sorrells deputy general counsel of the ethics commission speaking generally.
Some of AEWs individual gifts to the board members exceeded $250. Others such as $12 to Agosto and $12 to Nuez for a jazz club cover charge fall well below that.
Because all the gifts came from one company Sorrells said it would be a matter of legal interpretation to determine whether they should be considered in the aggregate thereby making all subject to reporting requirements.
Board finance committee chairman Bradley said he believes such gifts should be disclosed in board members financial reports. Im not criticizing a board member that may have shared a meal with someone in the industry he said. But it should be disclosed.
A non-story
Bradley said a private firm that has been hired by the board would make recommendations on which consultants should be considered for real estate investment management contracts. So this is a non-story he said because neither Agosto nor Nuez could determine which firms would be chosen as finalists.
The firm doing that vetting is Courtland Partners a Cleveland real estate investment consultant hired by the board late last year. A review of Courtlands own bidding documents shows that it too reported taking Nuez and Agosto out for food and golf.
The Courtland documents also included a lunch with Bradley in 2007. I enjoyed the sandwich Bradley said. It was under $250.
Split board
Nuez said he would recuse himself from any vote involving AEW.
AEWs acknowledgment of the gifts arrives at a time when the board is already deeply split over the management of the school fund which is used to pay for textbooks and other school supplies. The fund also serves to guarantee bonds issued by local school districts.
In July the boards conservative faction joined by Nuez voted to fire its longtime general investment adviser R.V. Kuhns. It replaced the firm with rival NEPC though NEPC cost more and was less well reviewed by staff.
Agosto who had previous business contacts with NEPC lobbied his colleagues for the switch.
Concerned about potential conflicts of interest raised by Agostos actions TEA staff declined to sign off on routine forms vouching for the ethics of the selection process this spring.
Agosto after telling a reporter that he intended to continue his support for NEPC was absent during the first July vote leading to its hire and called in with the flu for the second.
Texas Education Agency Commissioner Robert Scott has said that his agency lacks the authority to dictate ethics rules to elected officials. Board chairwoman Gail Lowe R-Lampasas said shes equally powerless to address ethical concerns although she hopes to make this part of a coming ethics review.
But now even if an egregious ethics violation were to be committed Lowe said there arent any enforcement or follow-up steps for me to take.
Jeff Horwitz is a freelance writer based in New York. He can be reached at jhorwitz24@ yahoo.com.
WINING DINING AND GOLFING
AEW Capital Management gave State Board of Education members Rick Agosto and Rene Nuez dozens of gifts worth thousands of dollars from 2006 to 2009. This is a partial list.
To Rick Agosto
Aug. 17 2007 Dinner $82
Aug. 18 2007 Dinner $50
Aug. 19 2007 Dinner $122
Aug. 20 2007 Dinner $30
Nov. 29 2007 Big 12 Championship Tix $220
May 4 2008 Dinner $136
May 5 2008 Lunch and dinner $130
Dec. 15 2008 Golf caddy fees and tips $324
To Rene Nuez
Feb. 27 2006 Golf lunch and souvenirs $117
May 30 2006 Golf tips and souvenirs $193
May 31 2006 Golf and souvenirs $162
June 1 2006 Dinner $144
Sept. 5 2008 Football game ticket $729
Dec. 13 2008 Wine tour dinner and logo glasses $89
Jan. 22 2009 Golf $231
SOURCE: Disclosure documents filed by AEW with the
State Board of Education
transparent. We have a fiduciary duty to the citizens of the state of Texas.
The 15-member elected board is in the process of allocating $1.2 billion for real estate investment firms to manage lucrative work for which more than 90 firms have submitted their qualifications. AEW is among them.
AEWs disclosure forms were provided to The Dallas Morning News by a member of the state board. This member requested anonymity because it is board procedure to withhold such information until contracts are awarded. But because of the appearance of possible impropriety the board member said the existence of the gifts ought to be public.
Board member David Bradley chairman of the finance committee said the records should not have been released. Any information that is released in those ... is confidential he said. That unnamed board member having a political agenda has violated the very same ethics policy and procedures he is talking about.
Bradley R-Beaumont cited a reminder issued last week by the general counsel for the Texas Education Agency declaring that state procurement statutes prohibit public disclosure of proposal information before a contract is awarded.
AEWs filings do not detail the circumstances under which the gifts were given. But based on their timing a number of them appear to have been presented at institutional investment conferences Nuez and Agosto attended as representatives of the Permanent School Fund.
The $20.5 billion school fund is partly overseen by the boards finance committee of which Agosto and Nuez are members.
Neither disclosed the gifts from AEW in their filings with the Texas Ethics Commission. There is a requirement under government code section 572 to disclose gifts that are over $250 said Tim Sorrells deputy general counsel of the ethics commission speaking generally.
Some of AEWs individual gifts to the board members exceeded $250. Others such as $12 to Agosto and $12 to Nuez for a jazz club cover charge fall well below that.
Because all the gifts came from one company Sorrells said it would be a matter of legal interpretation to determine whether they should be considered in the aggregate thereby making all subject to reporting requirements.
