Texas Board Follows Its Own Ethics Policy

No, really. The Board was about to vote on an RFQ for Real Estate Management Services for Real Estate. Geraldine "Tincy" Miller (R-Dallas, of the Henry S. Miller Realtors family) announced to the Board that she was recusing herself from any discussion or votes on the matter, according to recently approved policy. (Inside story: she shared reports about another member's apparent conflict of interest, which was the trigger that led to several months of controversy and a new ethics policy.)

Immediately thereafter, Pat Hardy joined her, saying that she did not know for certain if her investments might be affected, but wanted to avoid the appearance of impropriety. Then Rene Nunez (D-El Paso & real estate business) and Rick Agosto (D-San Antonio & investment professional) did the same, "following the lead of my distinguished colleague from Dallas, in order to avoid any apparent impropriety."

After Gail Lowe dismissed the members from the circle (lest their body language be considered to be "communicating" during the discussion), it came out that Rick Agosto had presented agency staff with e-mails and newsletters from one of the applicants for the RFQ, a firm called "AEW." Cynthia Dunbar (R-The Faction, Richmond) asked to have that firm removed from the list of qualified real estate participants, and it was so voted unanimously.

Now there are 67 qualified respondents for the real estate investment management RFQ.

Bob Craig (R-Lubbock) wishes this wasn't up for consideration, given that the staff of the Land Office is available to fulfill this function, but David Bradley (R-The Faction, Beaumont) pointed out that the Land Office contracts this out to somebody else. His point of view is that this is no vast improvement over hiring the Board's own managers for the real estate portfolio. This manager would be overseen by Courtland Partners, one of the Board's official financial consultant.

Goldman Sachs is being placed on a "watch list" because of concerns raised by the Board's advisors, NEPC (New England Partners), who say they're contacting all of their clients with warnings about investing with Goldman Sachs, due to recent lawsuits by other institutional investors (Sacramento Municipal Utility District, et al.) that allege that Goldman employees "rigged" the municipal bonds market in order to rip off institutinal investors. The Board agreed to reconsider removing Goldman Sachs from the "watch list" at their March 2010 meeting.