When a University Regent Tries to Blow the Whistle: The Wallace Hall Case

Like all public universities, the University of Texas has a governing body that is supposed to oversee its management—the Board of Regents. Trouble can arise when a member of such a governing body takes his job seriously and tries to investigate action by the university president that influential people would rather stay hidden.

One member of the UT Board of Regents who believes that he should look for threats to the integrity of the university and diligently pursue any he finds is Wallace Hall. Mr. Hall, a graduate of UT himself, was appointed to the University of Texas Board of Regents in February 2011.

It wasn’t long before he began to suspect corruption and mismanagement.

First, there was a scandal involving a large slush fund run by the dean of the law school, allowing him to hand out “forgivable loans” to select faculty members. The university’s president, William Powers, promised an investigation by an in-house lawyer, who dutifully produced a “nothing to see here” report. Hall argued that the matter required a more objective assessment, but his complaints were ignored.

Quoted in this piece, Hall said, “I was overruled. That’s when I first felt like, one, there’s a problem at UT, and, two, the system has set up a scheme that gives the opportunity for a less than robust investigation.”

But Hall kept pushing the Board to insist that the Texas attorney general’s office dig into the matter. It did, and then the truth finally came out that the dean of the law school was using the fund simply to hand out favors, including a $500,000 “loan” to himself. The AG’s report brought down the house of cards. The dean resigned and the scandal contributed to the pressure on president Powers to choose between resigning and being fired.

That fight was just a minor skirmish compared with the coming war over the secret, back-door admissions process at UT-Austin.

In 2013, Texas media began running articles such as this, suggesting that some students, despite their low scores and grades, were being admitted to UT as a favor to influential people.

In response, then-chancellor Francisco Cigarroa asked university general counsel Dan Sharphorn to investigate. The result was a mild report saying that the study had found “no evidence of overt pressure on Admissions Office staff to admit applicants based on the recommendations of persons of influence.” Sharphorn’s findings were accepted by president William Powers, who said that the report would be helpful.

Powers hoped that would be the end of the matter, but shortly afterward, Hall announced that he had found evidence in internal UT emails of blatant admissions favoritism at UT’s law school. That led to furious demands for his removal from office by Texans who didn’t like the way he kept turning over rocks. Several members of the legislature called for Hall’s impeachment and the Board of Regents formed a committee to see if there were legal grounds for doing so. When the lawyers it hired concluded that there was no ground for impeaching Hall, the committee voted to censure Hall for “disloyalty.”

By 2014, Hall’s persistence had won him many enemies in the state. He was being called “the most dangerous man in Texas” and as reporter Jim Schutze of the liberal Dallas Observer wrote, “Every major newspaper in the state has either called for Hall’s head or questioned his integrity, most of them basing their complaints on an allegation that Hall asked for too much information from the university—in other words that he did too much reporting.”

Meanwhile, chancellor Cigarroa had commissioned Kroll Inc., a New York-based consulting firm that specializes in uncovering fraud and corruption, to study the UT admissions system to see if there was truth in the allegations of favoritism.

Kroll issued its report on February 6, 2015. Based on an inspection of admissions records over six years, the researchers concluded that there had in fact been favoritism by president Powers towards well-connected Texans who wanted their children to get into UT as undergraduates or into its law and business schools.

In defense of the favoritism, a spokesman for Powers (who had already resigned but was remaining in office until mid-2015) told Inside Higher Ed, “Good will with constituents has a beneficial long-term impact on the university.” That was a euphemistic way of avoiding the truth: UT’s president was intervening to make sure that children of key Texans who couldn’t get into the university on their merits were admitted anyway.

UT’s new chancellor, William McRaven, acknowledged the Kroll report and immediately declared that there was no need to further investigate secret admissions favoritism or take any disciplinary action.

But neither Hall nor other skeptics in the state were satisfied with the Kroll report. One was Watchdog.org’s Texas Bureau, which did its own analysis of Kroll’s finding (but based on files with much pertinent information redacted) and concluded that Kroll had badly understated the problem. Watchdog’s Jon Cassidy calculated that 746 students (not 73 as Kroll had said) with grades and scores that would otherwise merit prompt rejection were admitted to keep legislators and wealthy university supporters happy.

Hall requested access to the unredacted Kroll data so he could see if there was indeed more to the story than officials were admitting. But his request was denied by McRaven, who said that Hall was trying to undermine his authority by reopening a matter he had declared closed.

University administrators are not supposed to prevent regents from doing their oversight work, so Hall filed a lawsuit to compel McRaven to release the information.

Both the trial court and the court of appeals sided with McRaven on the spurious grounds that Hall sued the wrong party. He should have sued the Board of Regents, not McRaven, the courts ruled, because a majority of the Board had voted to endorse McRaven’s refusal to allow Hall access to the Kroll data.

That decision has been appealed to the Texas Supreme Court. The case poses very important questions for university governance.

Hall’s brief to the Court first makes short work of the facile argument that he sued the wrong party. For one thing, McRaven, not the Board of Regents, has possession of the Kroll data. Moreover, the Board’s vote took place after Hall’s suit had been filed.

And most important of all, nothing in Texas law allows a majority of the Board of Regents to interfere with the efforts of any individual regent to get information that’s relevant to the work of overseeing the University of Texas. That’s crucial since some Board members themselves appear to be implicated in the scandal. Therefore, the Board’s vote to “endorse” McRaven’s refusal to allow Hall access to the Kroll data (and thereby immunizing itself from scrutiny) had no legal consequence.

The brief also responds to McRaven’s alternative argument that it would be illegal for him to give Hall access to the Kroll data.

This argument is based on the federal Family Educational Records and Privacy Act (FERPA), which states that federal funds can be denied to an educational institution that “has a practice of releasing education records of students without their consent other than to school officials who have a legitimate educational interest.” (Emphasis added.)

McRaven’s astounding claim is that Hall, while undeniably a school official, has no legitimate interest in the information Kroll analyzed. How could a regent not have a “legitimate interest” in finding out the truth about admissions practices that violate official university policy?

Furthermore, since the university has already provided all of the admissions information to Kroll’s personnel, how could it possibly be illegal to allow a member of the Board of Regents to have access to the same records?

Hall’s brief sums up the case succinctly: “University officials involved in this secret process knew it was wrong and tried to eliminate any paper trail.” If the Texas Supreme Court lets them get away with their cover-up, that would have “massive implications for state governance.”

The Court has been asked to hear the case soon, since Hall’s term of office expires next February.

In the recently concluded Fisher v. Texas case, university officials defended their use of racial preferences, saying that affirmative action improves the educational climate. At the same time, they were secretly running a system of affirmative action for the rich and advantaged. Both policies meant that large numbers of students with stronger academic records had to be rejected.

Last June in Fisher, the U.S. Supreme Court decided that UT’s overt admissions favoritism based on race could continue. (See Roger Clegg’s discussion of Fisher here.) We’ll soon learn if the Texas Supreme Court will allow UT to sweep the evidence of its hidden admissions favoritism based on influence under the rug.

  • DavidRHenderson

    Wow! Hall sounds impressive. BTW, when McRaven was head of JSOC and spoke at my school, I asked him if he does his own due diligence when ordered by Obama to kill someone on the “kill list.” In a long-winded answer, he seemed to say he did but when I relistened to the answer later, I concluded that he hadn’t answered.

    • George Leef

      Thanks for your comment, David. Evidently, McRaven is practiced at saying things that don’t really say anything. Just what people shouldn’t want in a university chancellor (but usually get).

      After reading about Hall’s long war with the UT bigwigs, I must say that I admire him. A lesser man would have caved in and quietly gone along with the administration’s “just let us do things our way” stance.

      • DavidRHenderson

        You’re welcome. Yes, Hall does sound admirable.

  • DrOfnothing

    Excellent that Leef finally comes out to shine a light on the corrosive effect that big money and favoritism have on public universities. I join him in condemning the pernicious influence of men like Art Pope and the Koch brothers on institutions that should remain entirely accountable to the tax-payers who fund them, rather than swayed by the policy recommendations and political views of an elite few.

    • George Selgin

      This comment’s comparison of the underhanded favoritism and abuse of funds that has been taking place at UT Austin with some public universities’ willingness to receive Koch money is absurd. Where is the fraud and deception, or abuse of _taxpayer_ funds, in the latter?

      • DrOfnothing

        “Koch officials routinely cultivate relationships with professors and deans and fund specific courses of economic study pitched by them.
        Detractors argue the Koch brothers’ college-focused money, by helping advance a philosophy of economic liberty, is eroding a fundamental aspect of higher education: academic freedom.”

        My understanding was that the Pope Center was committed to academic freedom of speech first and foremost. I agree that the Koch funding represents a different _kind_ of corruption, but it is part of the larger issue identified by Leef, which is the perversion of academic principles of merit (either of the individual or the idea in question) through the infusion of capital with the purpose of favouring either individuals or viewpoints.

        But, yes, I was being a bit facetious. Nonetheless, it is a bit hypocritical for the head of an organization that is bank-rolled by a wealthy oligarch and benefits significantly (if indirectly) from public funds to lambast the influence of the “rich and influential.”

        The other issue here is the sense of scale. Granting wealthy and influential donors favours via admissions is, sadly, an age-old practice. It is definitely nepotism, without a doubt. But we should also recognise the actual scale of the problem.

        UT admits over 15,000 students annually (of which slightly less than half enroll).
        Let’s assume that the actual number of “favored sons and daughters” admitted is half-way between the original number of the Kroll report (73) and watchdogs more inflated claim (746). Call it 400 even.

        So, across 6 years, when UT admitted nearly 100,000 students, 400 of them came in on the golden carpet.

        That’s .004%. I’ll bet you my college loans that five times as many were admitted as a result of computer errors.

        One must also ask the question of how much these donors (or legislators) contributed. That is to say, if the university gained millions or tens of millions in scholarship funds or facilities that significantly enhanced the quality of instruction, and allowed those excellent students without funding to attend, does the overall good for the university balance out the moral damage of the nepotism? That, I suppose, is for the individual to determine.

        Again, I’m not arguing that it isn’t a problem, simply that the scale of it is really quite small. The power of the Koch brothers to sway the character of instruction, or the lobbying efforts by Pope and his allies are far, far more consequential, yet those are largely ignored here. They may not be fraudulent, but they are certainly pernicious and they definitely favour the “rich and influential.”

        • WORSEKarma

          Ah, yes… Koch Derangement Syndrome… Another symptom of being a Brownshirt moron. Try looking into such Leftie-Fascist “heroes” as Warren Buffet and Tom Steyer, hon.

          • DrOfnothing

            I offered no praise of either Steyer or Buffet. Excellent to trot-out the “Leftie-Fascist” trope (which makes no sense, since Fascism is an ideology of the extreme RIGHT). When you have no argument, best to resort to insults, darling.

          • goldushapple

            indeed, DrOfNothing i just a another “Brownshirt moron.” He has demonstrated this countless times on this site.

          • DrOfnothing

            Most of my shirts are blue. Please refer to me as a “Blueshirt moron,” for accuracy’s sake. Or come up with some original insult instead of just parroting the same idiocy as the previous poster. Think outside the box, bronzeapricot!

        • Lonestar78730

          Not to nitpick….well, yeah, to nitpick.
          400/100,000 is NOT .004%; it’s EITHER .004 or .4%

          • DrOfnothing

            Arrgh, defeated by MATH 🙂

          • Lonestar78730

            My sympathies – I also am a casualty in that battle….

        • Governor Squid

          How much the legislators contributed? I’m not sure how “If you let my unqualified son into your law school, I’ll make sure to force a bunch of strangers to give up more of their money to you” is the sort of contribution that any taxpayer would recognize as valid.

          • DrOfnothing

            Hey, I’m not approving of the policy, don’t get me wrong. I just want the full story rather than merely one side of it. UT, in the past two decades, has gone from a very decent public university to one of the best universities in the world, and it reached its apex during the period under discussion (#35 globally, pulling even with Duke, UNC-Chapel Hill, and University of Manchester). That was largely riding the oil boom, and through massive public investment in both teaching and research (as well as donations from uber-wealthy alums). Whether we like it or not, political favours were part of that process, and while I condemn the practice of nepotism, in this particular instance, I would at least like to know what the school gained in return for a corrupt administrator compromising the principles of fair and meritocratic admissions!

      • goldushapple

        It’s DrOfNothing. He has nothing of true substance to say. As with every modern day leftist he pretzels his way into his reasoning and never ceases to inject grayness rendering any article/argument to his advantage of sophistry.

        • DrOfnothing

          And what do you contribute, besides personal insults? Nothing.

          Why are you cyberstalking me anyway? Is it love? I think it is, you cheeky monkey!

  • bflat879

    I’m one of those who believes this goes on all the time and, in reality, should be allowed. However, I also believe that it should all be in the open and not dealt with using scholarship money. If a wealthy Texan wants his son admitted to UT and is willing to foot the bill fine. However, his son should be expected to pass his courses and earn his degree. That can be done with a low grade point average or a high grade point average, but it can’t be done by paying off the professors.

    Having said that, I have no problem with someone exposing the hidden policies to the public either. Once you get to the stage where you know this was done it’s a lot easier to deal with. Affirmative action has been a problem for some black people because it puts a stigma on the recipients that they only got in because of their color. Well,, for the less intelligent rich folk, if this is all in the open, the same stigma will apply to them.

    Let the games begin.

    • JoeBideyourtime

      If they’re going to “foot the bill” who sets that price and who gets paid?

  • Lou Sander

    A&M is a much better school.

  • Lonestar78730

    Here around the blue island, this has been the biggest story that the local media and institutional players have tried to ignore / cover up that I can remember in my 30+ years around here. You either know about it and are familiar with the details, or you have no clue. What’s really interesting is when I describe it to my Leftist acquaintances. Uniformly, the response is denial, because the limited reporting is always of the ‘that crazy Hall is at it again’ variety, and then because no Leftist institution would do that (‘no true Scotsman’).

    • Jon Cassidy

      Exactly right. You’d think academics would be a little more embarrassed to resort to appeals to motive and ad hominem fallacies, especially after Hall’s allegations were proven true.

  • Glen_S_McGhee_FHEAP

    There should be a special club for folks like Hall, and those that tirelessly seek to bring to light corrupt practices. It is sad that institutions and their leaders consistently put themselves first, and the principles they represent, last.

  • UTMann

    Wallace Hall is a Perry lackey who was appointed to UT Board of Regents solely because he would do Perry’s bidding. Perry wanted President Powers out because he wouldn’t agree to implement Perry’s educations plans upon which he wanted to base his presidential run. Perry then appointed several underwhelming Regents who were more loyal to him than to UT.

    The battle on the board and against Wallace was an attempt to keep Powers until after Perry’s term expired and he couldn’t influence the choice of Powers’ replacement. The battle was won. I don’t believe Hall every had UT’s best interest at heart. It will be a great day when Wallace Hall and the other Perrry lackeys are off the UT Board of Regents.

    • Jon Cassidy

      Name one untrue thing Hall has said. Cite one fact to support your secondhand, irrelevant, and fallacious theory.

  • Edgelady

    I have seen it and know it to be true that children of wealthy and politically corrected with bad GPA’s and LSAT scores were let into UT law school. Carry on and gripe all you want about Hall — Perry’s lackey, whatever — it won’t change the truth or the existence of the Law School slush fund. This is already hurting UT. Straighten up and fly right.