By Jeff Horwitz
Lawson says Texas Ethics Commission should review matter
While State Board of Education member Rick Agosto has accused an investment company of incorrectly reporting that it gave him more than $1000 in gifts before it sought a lucrative contract with the board the company insists its disclosures are generally correct and said in letters to the Texas Education Agency (TEA) the disagreement may partially result from differences in accounting. Agosto a San Antonio Democrat denied that he accepted golf football tickets dinners and entertainment from AEW Capital Management a real estate investment firm.
AEW in a subsequent letter to the TEA said it may have made some minor errors in reporting but most of its original disclosures remain unchanged. It blamed some confusion on the Permanent School Funds disclosure rules which are more rigorous than those of other public funds.
AEW is one of 90 companies potentially seeking a lucrative contract with the board to manage $1.2 billion in real estate investments.
The Dallas Morning News reported last month that Agosto and board member Rene Nuez of El Paso received gifts from AEW and that neither board member reported the gifts in financial disclosure forms.
Mr. Agosto disputes all of the items on the AEW report said Julie Crothers Agostos public relations representative.
Nuez said before the story was published that he believed some of the expense reports had been fabricated by AEW.
Agosto declined to talk to The News before publication. But after the Oct. 10 story he produced credit card receipts that he said prove he took nothing of value from AEW.
I purchased my own football tickets and paid for my own golf Agosto said. The AEW report was wrong.
One expense in dispute was a December 2008 golf outing for eight people at Pebble Beach in California. In its most recent disclosure AEW filed a receipt showing it paid $2811. At the bottom of the receipt was a notation that said Player(s): Rick Agosto.
Agostos American Express bill for the same date shows a purchase at Pebble Beach for $2440.
In its letter to the TEA the investment companys lawyer said AEW and Agosto split the cost of the golf.
That Agosto may take the position that he paid for himself and half the guests (rather than half the bill) doesnt make our disclosure wrong (nor should it make Mr. Agostos position wrong) lawyer James J. Finnegan wrote. It is simply a matter of how one accounts for an expense which is shared.
Crothers said her client did not even play with a foursome associated with AEW. She speculated that an AEW representative asked Pebble Beach employees to put Agostos name on the receipt so that he could impress his bosses.
Comparing records
AEW has declined to comment citing confidentiality requirements. Its disclosures to the school board were provided to The News by a board member who requested anonymity.
Most of the other receipts produced by Agosto show no dollar amounts or details of goods purchased so they provide no direct refutation of AEWs records.
In some cases the two sets of records appear to bear little relation to each other. AEW reported that it paid $12 for a jazz club cover charge for Agosto on Oct. 8 2008. Agostos receipts show that he used his card at a restaurant and a golf course in Pasadena Calif. that day as well as at the Mi Cocina restaurant in Fort Worth. Crothers said no one beside Agosto uses that credit card.
In another instance AEW originally reported spending $220 on Agosto for Big 12 ChampionShip Tix in November 2007.
Agosto produced a receipt from Best Tickets of San Antonio for $810 for Big 12 football championship tickets that same month. According to Crothers Agostos secretary signed for the AEW tickets on delivery but he later returned them to AEW.
State law requires the reporting of any gifts over $250. Education board rules require reporting of any gifts over $50.
Crothers of the Edelman public relations firm in Chicago said many of the dinners and social outings reported by AEW were group settings at which Agosto would throw in a credit card to cover his costs. They were not co-marketing efforts as AEW has described them she said.
AEWs disclosures and newspaper stories about them have caused Agosto to suffer reputational and financial damage Crothers said. Agosto is president of Aureus Partners an investment marketing firm.
Texas for Public Justice a nonprofit watchdog group has filed a complaint against Agosto and Nuez with the Texas Ethics Commission over their nondisclosure of gifts from AEW.
Another complaint
Agosto also has complained about a News story in September that said he championed the hiring of NEPC a Massachusetts-based firm to manage the $22 billion
Permanent School Fund. Agosto had prior business contacts with NEPC.
In October lawyer Gary Lawson the education boards fiduciary counsel wrote that we have not found an ethics violation by Agosto in his dealings with NEPC
because Agosto had recused himself from the selection process.
Agosto did not in any way participate in the selection of the consultant Lawson wrote.
Lawsons findings did not note that Agosto pushed vigorously for NEPCs selection.
The move to NEPC was very strongly influenced by Agosto and theres no way he can get around that said Pat Hardy one of four board members who opposed awarding the contract to NEPC.
Despite Lawsons October assertion Agosto never formally recused himself from the vote; he simply was not present.
The education boards ethics handbook states that a member facing a possible conflict must disclose the matter at a public meeting and file forms with the board chairman and the secretary of education.
But just before a July 15 meeting of the finance committee attorney Lawson suggested that Agosto not participate in the discussion or the votes at which the consulting contract was decided.
The error was mine Lawson said.
Lawson said the
Texas Ethics Commission should be asked to review the matter.
