Most observers expect Gov. Greg Abbott’s three nominees for the University of Texas System Board of Regents to work cooperatively, with fewer fireworks, than the trio they would replace, assuming confirmation by the state Senate.
But one of Abbott’s picks, former state Sen. Kevin Eltife, once tangled famously with a regent who was also at the time chairman of the UT board’s investment arm.
It was February 2009, and Regent Robert Rowling and University of Texas Investment Management Co. CEO Bruce Zimmerman had been summoned to appear before the Senate Finance Committee for a dressing-down. A day earlier, then-Gov. Rick Perry and then-Lt. Gov. David Dewhurst sent a letter to Rowling calling more than $3 million in bonuses to UTIMCO employees, including $1 million for Zimmerman, “irresponsible” when the multibillion-dollar higher education endowments overseen by the company had posted significant losses and the country was in a recession.
Never mind that the bonuses were based on investment performance during the year that ended months earlier, before the financial markets tanked. In fact, the returns were in the top quarter of comparable endowments and pension funds nationally, Rowling told senators. He said UTIMCO board members felt an obligation to award bonuses that were part of the pay packages negotiated with employees.
“We made a deal with these people, ” Rowling said.
That explanation didn’t sway the senators. And the harshest words came from Eltife, a Republican from Tyler, who directed some of his comments at Zimmerman.
“This is shameful, ” Eltife said. “Most people out there on the street are scared to death and we just paid you a million-dollar bonus.”
At that point, Rowling, a billionaire businessman from Irving who is one of the richest people in the state, abruptly said he would resign from the UT and UTIMCO boards. “Watching the way Mr. Zimmerman was treated at this morning’s hearing truly does meet the definition of ‘shameful, ‘” Rowling wrote in his formal resignation letter to Perry and Dewhurst.
There undoubtedly was some politics at play in this episode. Rowling had given more than $200,000 in campaign contributions and more than $100,000 to Dewhurst. And although he was a Perry appointee, Rowling was part of the campaign leadership team of U.S. Sen. Kay Bailey Hutchison, who was planning a run for governor against Perry.