Texas Tech’s #RegentGate and the Question that Lingers: Part 2
IT ONLY TOOK five votes.
Votes that weren’t technically votes. Whatever one might call them, five of nine Texas Tech Board of Regents, a majority, indicated they had no-confidence.
Then Robert Duncan was summoned into an executive session. He walked in as a chancellor and a storied lawmaker. Five minutes later, he walked out retired.
Themes of what’s become #RegentGate— shrouded secrecy, inexplicable actions, ham-handed statements—have generated both public intrigue and outrage.
But these themes seem to have also pre-dated #RegentGate, which will be highlighted in an overview of five regents below.
But first, there should be consideration of the context that most likely triggered the five-regent majority and five of the most fateful minutes in Texas Tech’s history.
Context[Note: for an in-depth insider account of events from late 2016 through August 2018, see Part 1.]
The story of those five minutes and the five-regent majority began in late 2016.
It was then that Gov. Greg Abbott’s Chief of Staff Daniel Hodge, then 38, a bright, young hand with deep beltway connections— one of the most significant being with Texas A&M System Chancellor John Sharp— imposed a threat upon the Tech board: Choose between a dental school and a vet school. One or the other, but not both, the governor’s man directed.
This was hardly a choice. The El Paso-based dental school had millions of dollars worth of commitments, thanks in large part to Board Chairman Rick Francis’ El Paso business ally Woody Hunt. The vet school proposal, however, was almost entirely funded by hope.
To drive the point home— lest there be any confusion that a choice wasn’t actually being offered— Hodge, according to sources, instructed regents up for reappointment in January 2017 that helpfulness in getting Duncan to hit the brakes on the vet school could be significant determination in reappointment considerations.
Shortly thereafter, the Tech regents rendered a consensus statement to put the vet school on pause.
Tensions mounted when Tech walked away from the 2017 legislative session with a $4 million appropriation for the “on-pause” vet school proposal. Tensions evolved to hostilities in the fall of 2017 as the 2018 budget was being prepared.
Francis is said to have demanded budget-flat approach, new costs of System overhead growth be damned. This was retribution, sources say, for Duncan’s vet school feat. The point was to put a boot on Duncan’s throat, and, I’m told, newly re-appointed regent John Steinmetz, the board finance chairman, was obliged to redouble the pressure of Francis’ boot.
One year prior, in 2016, Francis was enamored with Duncan’s vision for Tech. One year later, in 2018, Francis believed Duncan’s vision was incompatible with that of the regents. Incompatible with at least five anyway: Francis, Steinmetz, Mickey Long, Christopher Huckabee and Ronnie Hammonds.
Assessed individually, one can take a pretty good stab at how these five regents could eventually compound into a majority that would bring about #RegentGate.
First appointed by former Gov. Rick Perry in 2003, Francis is very successful El Paso banker whose current regent term expires in January 2019. His week-late statement justifying Duncan’s “retirement” by citing budgetary disagreements has been easily debunked. But this isn’t the first time Francis has provided misleading information.
According to his own personal financial statements, Francis, a regent aiming to break 20 consecutive years on the board come January, has failed to disclose at least five companies with which he’s associated. Some as recent as this year.
For instance, on June 29, 2018, Mr. El Paso made a $100,000 contribution to Abbott and cited his employer as Prime Capital Management (PCM); not only had Francis failed to disclose PCM as a business entity in which he had an interest on disclosures, he also failed to list PCM as a source of occupational income.
Lacks of transparency can make business transactions seem more suspicious than they might actually be. Like the one Francis conducted in February 2015, when ownership of an El Paso commercial property was transferred to Francis’ Red Raider Capital LLC, which obtained a $1.28 million loan from First United Bank in Lubbock for the acquisition.
On December 23, 2015, Red Raider Capital transferred ownership of the property to L. Frederick Francis. That same day, L. Frederick Francis transferred ownership to Francis Properties I, Ltd.
The loan from Lubbock, likely used for the El Paso property, appears to be noted in personal financial disclosures, but the property, to which El Paso Central Appraisal District continues to reflect Francis as the owner, isn’t listed on his disclosures.
PCM, Inc and Red Raider Capital LLC are two of at least five entities Francis, a numbers man, hasn’t properly disclosed on personal financial statements. Which seems mighty bold for a board chairman who seems to be justifying the ousting of Duncan based on a numbers disagreement. Such an ouster assumes those doing the ousting have their own numbers in order.
Appointed by Perry in 2011 at the age of 32, Steinmetz stumbled out of the gate when it was discovered that false educational information was listed on three different regent applications. As president and CEO of Vista Bank, Steinmetz seems to be the most notable name currently involved in two simultaneous Lubbock controversies: the bankruptcy filing by Reagor-Dykes Auto Group and #RegentGate. His bank could absorb damages in excess of $6 million in #ReagorGate. More than a few Lubbock banks might be dreading the posting of Reagor-Dykes bankruptcy schedules in the days to come.
Back to the #RegentGate, Steinmetz has long and publicly touted his friendship with powerful Aggie, former Texas Governor and current U.S. Sec. of Energy Perry. These ties might gain higher levels of scrutiny as #RegentGate unfolds and if concerns of Aggie collusion heighten.
And some of these concerns might be validated by the fact that Vista Bank holds a mortgage of a “$1 million or more” for a Perry residential property, according to Perry personal financial statements. Whatever other relationships Perry might hold with the bank, if any, isn’t determinable by public record.
Long a graduate of Angelo State University, is president of Westex/WLP Well Service, L.P. in Midland and was originally appointed by Perry in 2009. [Update 08/25/2018: Long may not be part of Westex/WLP any longer, according to sources. More details to come.]
He also currently serves as Chairman of Vista Bank.
Like Francis, Long has undisclosed businesses on documents, which creates difficulty evaluating possible conflicts. But what’s clear for now is that Long seems to have at least seven undisclosed, and at least one undisclosed real estate transaction in 2017.
Huckabee is an Abbott appointee and the CEO of Huckabee Architecture, Engineering and Program Management.
In June 2016, it was announced that Huckabee landed the renovation and expansion of Tarleton State University’s football stadium. Tarleton is a part of the A&M System, which appropriated around $24 million for the project.
Huckabee owns “10,000 or more” Vista Bank shares, according his personal financial statement filed in January 2018. [Note: “10,000 or more” is the highest amount of required disclosure on a PFS.]
More below on what might be termed as the Vista Trio.
Hammonds, the owner and president of the real estate investment firm Grason Communities, Ltd., was appointed by Abbott in 2015.
Sources see him as an anomaly to the other four regents who gave Duncan no-confidence. He’s noted for treating his regent appointment like “being a member of a local United Way board.” On multiple occasions, Hammonds has asserted that he wants to see the Texas Tech Health Sciences System become the MD Anderson of mental health. Sources say this is his primary focus; some say its his only focus.
This focus might help make sense of comments from a TTU System spokesperson on the night of Duncan’s retirement announcement, in which “the dental and vet school, and a mental health institute” were singled out as legislative priorities.
“I had not previously seen or heard those three priorities put together like that,” a source told me.
A mental health institute was suddenly, upon the evening of Duncan’s departure, on priority par with a dental and vet school.
The question that lingers in #RegentGate is this: What happened in those five fateful minutes, after which Duncan walked out retired?
To this simple question, no answer has been given.
And when answers to simple questions do not come, much more difficult questions tend to follow. Questions that might well help answer the question not being answered.
Questions like these:
Did Francis and/or any of the Vista Trio (Steinmetz, Long and Huckabee) make a deal with Hammonds to build a majority?
Will Francis and Long be submitting more thorough disclosures on personal financial statements?
How did Empower Texans’ Michael Quinn Sullivan know? Sullivan– a long-time political ally of former Gov. Rick Perry and, apparently, a recipient of perks provided by Texas A&M System Chancellor John Sharp– tweeted at of 2:07pm CST on Monday, August 8, 2018, that “a chancellor of a major Texas university system is being canned (or forced to resign)” later that day? Was he tipped that the regents had five no-confidence votes, and, if so, when and by whom? (Sullivan, an all-round profile in courage, eventually deleted the tweet.) [Update 08/25/2018: Sullivan, who’s presents himself as Texas brass, but has silky thin skin, preemptively blocked me on Twitter. Upon further verification after publish, he never deleted this tweet. I regret the error, but not the sentiments expressed above.]
When was the last time the board, in accordance with Regents’ Rules 01.01.4, completed a self-evaluation?
Is the relationship between Steinmetz and Long above board, in accordance with 03.01.1(c): “officers shall accept other appointments or any employment or compensation that could reasonably be expected to impair officers’ independent judgment”?
Is the relationship between Steinmetz, Long and Huckabee above board, in accordance with 03.01.1(d): “Officers shall not make personal investments or engage in other activities, including having a direct or indirect financial or other interest, engaging in a business transaction or professional activity, or incurring any obligation that could reasonably be expected to create a substantial conflict with the proper discharge of the officers’ or employees’ duties related to the public interest”?
Are business relationships between the Vista Trio and Perry, as well as Huckabee and the A&M System, above board and in accordance with 03.01.3: “that state officers and employees may not have direct or indirect interests, including financial and other interests, engage in business transactions or professional activities, or incur any obligation of any nature that is in substantial conflict with the proper discharge of the officers’ or employees’ duties in the public interest”?
And finally: Wouldn’t it just be easier to tell the public what happened in those five minutes?
Jay Leeson is the founder of Other Side of Texas. You can hear the radio program by the same name each weekday 5-6pm CST on AM 580 Lubbock, streaming OtherSideofTexas.com. Each episode is posted as a podcast, subscribe at Apple podcasts.