Texas law faculty loans face additional scrutiny

Karen Sloan

The National Law Journal

03-21-2013

The dust hasn't quite settled from a 2011 controversy over faculty loans at the University of Texas School of Law. The Board of Regents voted, 4-3, on March 20 to conduct an outside investigation into the Law School Foundation and its handling of large, forgivable loans to faculty.

The loans, as well as the foundation's relationship with the larger university, have already been the subject of separate probes by the university, a regents committee and the Texas attorney general. All concluded that the loans were inappropriate and lacked proper oversight.

The now defunct loan system was established during University of Texas president William's Powers' tenure as law dean, as a way for to compete for top faculty talent with schools paid higher salaries, both reports said.

The controversy cost Larry Sager, Power's replacement as dean, his job in late 2011. Authorities asked Sager to resign after questions arose about disparities in faculty compensation, and after it was revealed that the foundation had extended him a $500,000 loan.

The regents were split over whether a new, outside investigation—at an estimated cost of $500,000—was necessary. Supporters argued the university's investigation was too soft on Powers and that the resulting report included some discrepancies.

Barry Burgdorf—then the university's vice chancellor and general counsel—conducted the university's investigation and released his findings in November. Burgdorf resigned earlier this month.

"I can't say that I have confidence that the facts that have been set out are all that need to be set out and are fully complete to this day," regent Alex Cranberg told The Dallas Morning News.

Others saw an unfair move to oust Powers. The Texas Coalition For Excellence in Higher Education called the vote a vendetta against University of Texas at Austin leaders.

"From all appearances, UT Austin has been open, transparent and cooperative in regards to the investigation into the UT Law School Foundation, fully complying with three rounds of inquiry—from system's general counsel, from the attorney general and from the board's Audit Committee," the organization said.

Contact Karen Sloan at ksloan@alm.com. For more of The National Law Journal's law school coverage, visit: http://www.facebook.com/NLJLawSchools.