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    3 Indicted for Closed Meeting

    BY Janet Elliot
    08/31/2002
    by Janet Elliot on 8/31/02.

    AUSTIN - Two current members and one former member of the State Board of Education have been charged with violating the state's open meetings law.
    The three are accused in indictments handed up Thursday by a Travis County grand jury with conspiring to circumvent the Texas Open Meetings Act and holding a closed meeting two years ago when they met for lunch with three outside advisers at a popular Austin deli.
    Board members David Bradley, R-Beaumont, and Joe Bernal, D-San Antonio, along with former board member Robert Offutt, face fines of up to $ 500 and six months in jail if convicted of the misdemeanor charges. Also named in the indictments are Russell Stein of Houston, Brian Borowski of Austin and Joe Alderete of San Antonio.
    Bradley said Friday that he expects to be exonerated.
    "I am disappointed that after cooperating and waiting on the county attorney that he is now two years later pursuing a false misdemeanor charge," said Bradley, who owns a real estate and investment business in Beaumont. "I am confident that when the facts are told again that I will be cleared of any misdeed."
    Bernal told the San Antonio Express-News, "I adamantly deny discussing public business at lunch."
    Houston attorney Rusty Hardin, who represents Bradley, said "there's not a snowball's chance in hell" of any convictions.
    "These guys were not doing school board business in a closed meeting in a public restaurant," said Hardin. "They were having lunch."
    Offutt could not be reached for comment.
    The charges stem from an Aug. 30, 2000, lunch at Katz's Deli in Austin.
    Bradley, Bernal and Offutt were members of a five-person committee that made recommendations to the full 15-member board on the hiring of managers for the Permanent School Fund. About half of the fund is managed by outside investment advisers and the other half by staff of the Texas Education Agency.
    Three TEA employees reported the possible violation after arriving at the restaurant and observing the board members and the outside advisers seated at two nearby tables.
    The employees stated that they saw on both tables documents related to the hiring of external money managers.
    Later that day, the full finance committee screened applicants for consultant positions to invest a portion of the school fund.
    Wayne Meissner, an attorney for Stein, had no comment. Stein is a former adviser to the education board, hired to oversee the Permanent School Fund's private money managers.
    An attorney for Alderete, a publicist and former member of the San Antonio City Council, could not be reached.
    Austin attorney Bill Allison represents Borowski, a financial consultant who served as an informal adviser to Bradley and Offutt. Allison said the fact that prosecutors have been investigating the meeting for 18 months and waited until the statute of limitations was about to run out to seek indictments indicates their case is weak.
    "Little-or-no-evidence cases are filed the same way you put a bookmark in a book. Use it or lose it," said Allison. "I've had this case for two years and I don't think there is any violation at all."
    The education board has been at odds with the Legislature over its management of the school fund and decisions on textbooks.
    Allison suggested the indictments may be politically motivated, coming before the November election. Bradley faces Democrat Richard Hargrove while Bernal is unopposed for re-election.
    Travis County Attorney Ken Oden didn't return a call. Assistant County Attorney Jim Connolly said an investigation will continue into allegations of conflicts of interest regarding board investment decisions about the $ 17 billion school fund, which is primarily used to buy textbooks.
    Connolly said with billions of dollars at stake, all decisions about the school fund must be debated openly.
    "The purpose of the Open Meetings Act is to safeguard the public's interest in knowing how decisions are made with regard to that money," said Connolly.
    David Donaldson, an Austin attorney and director of the Freedom of Information Foundation of Texas, said he can recall no other elected state officials being charged with violating the Open Meetings Act since it was passed in the 1970s.
    "I hope it sends a message to other state officials that the Open Meetings Act is a real deal," said Donaldson.
    However, Donaldson said that winning convictions might be difficult if the Committee on School Finance/Permanent School Fund didn't have authority to take independent action. Donaldson said lawyers for the board members could argue that the three did not constitute a quorum of the 15-member full board.
    Texas Citizens for a Sound Economy, a conservative group that monitors the content of school textbooks and other issues, criticized the indictments. Peggy Venable, director of the group, said that the education board has been outstanding in managing the school fund.
    "These efforts are being engineered by several legislators who have been eyeing the $ 17 billion fund as a potential revenue source to pay for their overspending," said Venable.