Who said there are no second acts?
Booted from the leadership of Texas Monthly for bad numbers, not his real crime, bad journalism, Evan Smith is now running the Texas
Tribune both as editor and CEO. As easy as it is to be jealous of his
success, as we say in the African-American community, you have to give a nigger
his due. Smith and his financial backer—venture capitalist John Thornton—are
doing something admirable in the Tribune by creating valuable
content in an information age.
About Evan Smith’s interviewing style: There
are basically two approaches to questioning, whether it’s People magazine
doing the asking or the FBI.
Oprah is at one extreme where the conversation is
just as much about the interviewer as the interviewee and the answers don’t
matter so much. Smith and his people at TT operate fairly close to the Oprah tradition. It’s
a surprisingly effective approach even in public affairs. What’s impressive
about the vibe the Tribune puts out is that its journalists
have taken a leaf from the Obama book, early in his first administration, when
addressing conflict in the Mideast the president reminded Jews and Muslims that
everybody has a narrative. That applies in Texas as well. The bureaucrats who
actually run the Lone Star State Capitol day-to-day have something to say. In the proper
non-threatening setting, public servants talk and talk and talk and Smith and
his people listen.
What the Tribune really does
that’s better than anybody else: not words but numbers, stats, files, literally accessible at your fingertips. There’s bill tracking, governor’s pardons, state
employee salaries, prison populations and more, all there or at least more
there than anywhere else, maintained in databases that are handy. If Evan Smith
and crew never did anything else they’ve already helped change journalism
forever. In fact it’s all about numbers even in understanding the inner working
of the website.
Evan Smith’s salary was an early preoccupation
of Tribune management and a pre-emptive declaration was made
that he must be paid well. “During the initial stages of the business, the
founders determined that a high caliber leader who could lead with integrity
and high standards was necessary to ensure the success of a nonpartisan news
organization,” according to the Trib’s Form 990 required of
non-profits. “CEOs of major foundations and web-based companies, as well as
leaders of other public service organizations including ProPublica, MinnPost
and PBS were approached to further determine appropriate compensation levels.”
Although the current Form 990 is late being posted, Smith’s last cited salary
was $300,000 plus change. He has some memberships covered, as well as what must
be his tab at the Quorum Club, or the like, that's a work-related expense, and it’s of note that the salaries
and bonuses of three names on the Tribune masthead, Smith,
executive editor Ross Ramsey and chief fundraiser April Hinkle approach 20% of
the budget. Salaries like these seem reasonable enough, actually. Austin is an expensive
town and these are talented people, the real issue isn’t how much they’re being
paid but where the money is coming from and what effect that source of funding
has on the news. In that respect—Austin, we have a problem.
Arguably the
biggest story in Texas in the last year or more besides the success of the Tea
Party has been the showdown between University of Texas Regent Wallace Hall and
President Bill Powers of the Austin campus. In a way the Tribune itself
is responsible for the original smackdown reporting, a great piece about a “forgiveable loan”
program offered by the UT Law School Foundation which provided hundreds of
thousands of dollars each to law faculty, who did not have to repay the money.
Call that practice what you will. The Tribune entered the eye
of the storm at that point.
It
wouldn't be fair to say that all the bad blood between President
Powers and UT System leadership has been due to the cash. Bill Powers, who
describes himself as a liberal, was a thorn in the side of the more
conservative Board of Regents even before details of payments became known.
It’s said that Governor Perry doesn’t care for President Powers and that’s a heavy
weight for any public university leader in Texas to carry, especially with this governor,
who can’t let anybody think he can be punked. Since the original Tribune report
broke—as the story developed a life of its own—including impeachment hearings
for Regent Hall and shows of support from various sources for President Powers,
it’s been instructive to watch the Tribune’s coverage which has
been, generally speaking, to roast Regent Hall slowly over a low flame. Until
recently at least, when Hall’s fortunes took a sudden turn for the better.
The
missing detail in countless pieces of Tribune reportage has
been that the University of Texas at Austin, i.e., Bill Powers, is the news
site’s major business partner in recent years. Those one-line admissions at the
end of Trib stories that UT Austin is a contributor to the
website don’t do the relationship justice. They’re practically
fucking—Evan Smith and President Powers—in a businesslike way.
What we’ve seen in the last year and a half or
so is battle by proxies, with Governor Perry represented by Regent Hall and
President Powers’ flag waved by the Tribune. In the later case, for
a price. This hasn’t been an example of journalism at its best but it has been
journalism at its most entertaining. The Tribune tried
simultaneously to do two things—protect President Powers and take Regent Hall
down. In the end Evan Smith almost hit his numbers.
A recent reluctant release of information on
spending by UT Austin shows that during roughly the same period as the fight
between Powers and Hall, the Tribune received about $200,000
from the university (the exact amount isn’t clear from the figures released by
President Powers), for ads and sponsorships of the Tribune and
Evan Smith’s various events. That sum may include money from the business school
and LBJ School of Public Affairs which also do business with Smith’s non-profit
news source, to say nothing of the campus radio station KUT which does polling
with/for the Tribune and for which Smith allegedly pays the
university forty large.“Transparency in all things,” Evan Smith likes to
tell audiences, “even your own business,” although he has previously objected
to efforts to make public the extent of his ties to KUT.
We only know that the $200,000 does not include
$63,000 a year Smith also receives as a lecturer at the LBJ School, or the
deals the Tribune gets for various festivals that take place
on the Austin campus which have included rent-free use of university space. In
the context of a significant on-going business relationship it’s almost
certainly not coincidence that the Tribune did
not report, as others have, that Powers himself also received a large Law
School Foundation loan and—as the Austin newspaper pointed out—did not follow
the rules correctly in getting the money. The Tribune represents
the majority of state government reporting today—as Evan Smith himself likes to
note—and was heavily focused for a long time on the alleged sins of Regent
Hall. In the midst of the showdown in September of
last year the editor-in-chief wrote to President Powers after a Tribune event
on campus: “It was the best festival ever, Bill, and UT-Austin and your team
are absolutely one of the main reasons. We had so many people, so much energy,
and so many media organizations on this campus. And so many students
participated—an unprecedented number. It really came together. Sincerely
grateful, E.”
From Powers: “Thanks, Evan. I had the same impression. You are
great partners.” Prior email included birthday wishes from Smith to President Powers,
all in the timeframe of the dispute with the Renegade Regent. Smith has previously been
an invited guest in Powers’ presidential box for Longhorn games. That’s
cool—it’s not a big deal—but exactly how does that translate into impartiality?
It is part of a pattern, though. At Texas Monthly,
according to study done at the UT School of Journalism, Evan Smith was documented to
be first editor of the magazine to provide the business side the calendar of
journalistic production, in order to synchronize ads to content. At magazines, that’s kind of expected, although perhaps not optimal. At a newspaper it’s
something different altogether. Evan is fond of telling audiences, as he
recounts the Tribune’s successes, that he often thinks of himself
as editor “in the morning” and chief fundraiser/CEO “in the afternoon.” A much
more likely scenario is that he is fundraiser and editor simultaneously, all day
long.
Critics want to look at corporate contributors
for conflicts of interest but the Tribune is devoted to state policy
and its ethical underbelly involves government not corporate sponsors. Among the Tribune’s biggest
“partners” are the state’s public universities.
If for example you review the TT website, A&M stories are without exception positive, detailing
university outreach or new programs: C’mon now, this is Texas, it’s not like
controversy is hard to find. Choose an A&M campus at random—Corpus Christi
for example, where leadership seems to be particularly challenged—and the university
president has been using public funds to pay his dues at the Corpus Christi
Yacht Club and his administration refuses to release details of a big drone
development program. It's not like there are no hard questions to ask. Certainly the Tribune tries to go soft in order to encourage
disclosure, but it also seems not to be above picking targets according to
who’s paying.
As
the Hall story developed critical mass it was interesting to see who denounced
the “renegade” regent. The first cut is always the deepest. The main
accusers seemed to be Senator Judith Zaffirini, Democrat of Laredo, reported in
the pages of the Tribune, and Representative Jim Pitts of Waxahatchie at the
hearings of the Select Committee on Transparency brought to us without
commercial interruption by Speaker Joe Straus. As it would turn out all
three—Straus, Pitts and Zaffirini—while complaining that Hall was on a witch
hunt—were in jeopardy from what he was looking into. Surprise. The Tribune’s
coverage was mentioned during the impeachment hearings and even footnoted in
the final report recommending Hall’s trial. That maybe is merely coincidence, and good
reporting, nothing else.
More likely is that journalists are part of
this story, a big part, especially in the context of the new interplay between
traditional news sources and upstart online operations. It’s not pretty having to sort out roles and responsibilities, who gets money from what source and
the issue of who is the reporter. A particularly
apt example—of a similar kind of preferential reporting and how it arises—comes
from California not Texas, and points to the selectivity in reverse you see in
Austin at the Tribune.
This incident also involved a familiar player
from the University of Texas.
Almost five years ago, the same time the Tribune started
to publish, the Bay Citizen was launched with the same
business plan—but in Northern California, an online startup promising to reveal
how the world really works, through the eyes of good reporters.
The very next year the Citizen ran
an extraordinary report that University of California President (former
University of Texas Chancellor) Mark Yudof had spent $600,000 of the
university’s money to rent a home for his wife and himself. For one year.
The context was mind-boggling: California was
in the midst of a budget meltdown, the University of California was in the
worst financial straights imaginable—calling for large tuition increases
accompanied by student protests daily
Yudof’s wife, at taxpayer expense,
was modifying an elevator for her own use in the rental, capped by the trashing
of the property, leaving a $50,000 repair bill for which the university was
also responsible. Neither the San Francisco Chronicle which
is the Hearst paper in Baghdad by the Bay—traditional first responder for
University of California Office of the President news—nor the Los Angeles Times followed
the story, even after Yudof was reprimanded publicly by the regents. The Times higher
education reporter, who has been covering UC for a long time and has
consistently soft sold UC, tried to cover
Yudof’s ass by writing about the poor state of repair of the UC president’s
official residence but not the reprimand by the regents. Chronicle reporter Nanette Asimov wrote
nothing at all. In this case, personal relationships between traditional
journalists and the people they cover, something which startups are supposed to
avoid, appeared to bar “doing the right thing.” In the case of the Tribune there
seems to be a simpler dynamic at work. It’s all about money.
“From the beginning, we talked about this has
got to be a sustainable model,” Evan Smith said in meetings of non-profits two
years ago and again last year. “What that means is you’ve got to diversify your
sources of revenue. You’ve got to have enough buckets so that if one bucket is
not as high at the end of the year as you anticipated another bucket is
overfull and flowing into that bucket.
“We literally have been willing to put a price
tag on everything up to the point at which it compromises our integrity. We’re
running a business here.”
Evan specifically noted in these talks to the non-profit community, as he taught
others what he just learned, that while big donations from
corporations—foundations and the rich, and such—are welcome, his business model
relies more on smaller regular donations, on a yearly basis, which exactly
describes what he’s getting from Texas’s public universities. What a coincidence!
This is, like,
regular income—reliable cash flow from the people of the state. UT, A&M and
Texas State University System are all among those paying. In what may be another
example of editorial payola—the evidence is only circumstantial—but
points to Evan Smith and the Chancellor of the Texas State System, Bruce
McCall. Last year the Tribune ran a piece on the sudden
departure of the first Latino president of a public university in the state. Richard Maestas of the Big Bend campus was literally in West Texas one day and
recalled to Austin the next. Locals say they knew an administrative hit was in
progress when Texas State officials arrived by plane at Alpine’s tiny airport in the Trans Pecos,
on the morning in question. It was like something out of Conrad—Maestas’s
methods had been judged unsound in Austin, out there in the High Desert. He was to be terminated, no further
duties, removed from his office but Texas State would pay out his salary for
the rest of the year. To set the scene.
A Tribune story noted the
abrupt removal and as followup—nothing. That Dr. Maestas was removed by Texas
State leadership a week after he fired the football coaching staff could have
been established right away, and eventually was—people were talking openly
about his dismissal. But no definitive cause was given. Nor has it ever. The original Trib story was
updated but the obvious next piece was never done. There was no “good” story
possible here for Texas State: Chancellor McCall either screwed up hiring
Maestas in the first place, or firing him later, since his tenure in Alpine was
so short. Texas State System, which is the same kind of sponsor of the Tribune as
A&M—less than UT Austin but still worth about $100,000 a year—didn’t want
the other shoe to drop. Indeed, as part of its publicity contract with Hahn
Communications, Texas State is advised to spend lavishly with the Tribune.
Hahn’s contract also promises help placing stories in senior legislators’
hometown news, during the legislative session. Nothing is left to chance.
Everyone who counts is properly connected to everybody else. Increasingly,
the Tribune provides the wiring. At a price. It’s a business
model—a startup model—take risks, be willing to make mistakes, don’t look back.
That’s what Evan Smith advises his non-profit audiences. That is what he has done
and it is mostly good. Mostly.
The recent spotlight has been on the
University of Texas and for good reason. Among the accusations against Regent
Hall was that, while looking at possible cooking of fundraising figures by
President Powers, Wallace Hall somehow forced out the law firm Vinson &
Elkins, which was involved in the fundraising review. Those of us with institutional
memory will recall Vinson & Elkins as lawyers for Enron, the most corrupt
company in America of its generation, and Bill Powers as an Enron board member,
so the real question was not if the law firm was forced out but how V&E was
placed in a post-Enron position of trust in the first place. Another accusation
against Regent Hall appears to have greater validity. That he targeted Bill
Powers. Once again there may have been good reason.
Wallace Hall is reported to have shown an
abnormal interest in Powers’ travel and in his wife: if you look at Texas
Department of Transportation flight logs for the period prior to the showdown,
President Powers appears as one of the most frequent users of state airplanes
in circumstances in which this use is not approved.
President Powers made a series of small-plane flights,
at thousands of dollars per aircraft use, to cities where there was commercial
service readily available. He didn’t need for example to take a state plane as
lone passenger with two pilots and at a cost of almost $4,000 to fly 375 miles
to talk to the president of the University of Oklahoma. But he did, even though
there is commercial passenger service to Norman, OK.
Power's wife appears on
some of the passenger manifests as an employee of the president’s office and if
nothing was made of these violations at the time it’s probably because among
the other passengers on one of these Longhorn Air flights were then-Chief
Justice of the Texas Supreme Court Wallace Jefferson and Associate Justice
Harriet O’Neill.
Both High Court jurists retired shortly thereafter. The point is that
where there’s smoke there’s usually fire at UT, and for that reason it helps to
know Powers’ origins in his present position. He had a godfather, named Mark
Yudof. Yudof served as an assistant dean at the law school when Powers was
first a professor there, UT Executive Vice-President and Provost Mark Yudof
later groomed Powers for a position of authority at the School of Law, when
Mark Yudof became chancellor of UT System he helped make Powers president of
the biggest and most prestigious university in the state. If President Powers’
tenure has been ethically-challenged, so was that of his mentor. The issue that
will remain the defining aspect of the Hall-Powers fight is legislators’
improper influence on admissions. It did not start with Bill Powers but he has
embraced the practice with apparent zest.
Favoritism shown to the children of the
connected likely occurs at all the campuses in the state,
maybe in the nation; at some schools it’s written into the rules. But not here.
The favoritism was extraordinary in regards the UT Law School and marked by
literally incredible testimony of Rep. Jim Pitts, powerful Republican chairman
of the powerful House Appropriations Committee, who has announced his retirement
from office.
Rep. Pitts claimed that his request to President Powers to get
his son into the Law School was a mere “form letter,” he accused Regent Hall of
a variety of sins, while denying that he himself had done anything improper.
The same dubious defense could be made by senators Zaffirini and John Carona,
Republican of Dallas, who was recently defeated in a primary race. Both used
stroke to achieve dubious admissions. It makes you feel almost sorry for
Powers, it's almost a form of blackmail, could he really afford to reject the
application of the son of the chairman of the Appropriations Committee? Not
likely. And then there was the bad press. As crooked admissions suddenly became the
most interesting issue in higher education, the Tribune was placed in an uncomfortable position still trying to protect the man
who, it was suddenly clear, acted on legislators’ pleas. Executive editor and Tribune #2
Ross Ramsey opined that Regent Hall really presented a challenge to the rights
and privileges of legislators to use influence.
“Wallace Hall,” this amazing defense of
corruption began, “has been poking at this for more than a year, in a way that
has prosecutors and impeachment-minded lawmakers questioning what he has done
and why he has done it,” Ramsey wrote just after the Hall story suddenly
changed directions.
“Would it be more surprising that elected
officials can get people into top schools according to a kind of time-honored
friends and family plan, or that they do not have the clout to get someone who
is marginally-qualified into, say, a state college of law or business?”
The Tribune editorial argued that the public wants a legislator who
can get the job done—who can get someone on the phone for example—or, in the
case of the University of Texas, write a letter that will get an
otherwise-unqualified student into class. (A contrary argument, which was not
made, is that the public expects a fair process in admissions to public
universities.) Ramsey was correct however in his use of the term “marginally-qualified,”
to describe many of the legislators’ kids, since the issue of influence arose
when these privileged students didn’t pass their exams.
The Trib #2 was writing his
defense of university President Powers in a context in which it was suddenly not clear who was more
at risk, President Powers or the renegade regent. “Hall is critical of
UT-Austin for allegedly having done the bidding of lawmakers,” Ramsey wrote,
“but the real threat is to the lawmakers themselves. It is their clout that he
is questioning,” a strange claim to make unless the Tribune editorial
board believes that there are two sets of rules, one for legislators and one
and for the rest of us. Since Ramsey's column, other state universities have
moved to cover their own tracks. Both A&M and the medical school at Texas
Tech have said that they will only release documentation on legislators’
influence after requestors pay $110,000, to each school, for a records search.
One of the complaints against Regent Hall at the impeachment hearings was that
he attempted to avoid charges for open records requests. We now know why.
Similar barriers to release were recently
offered by UT Southwestern Medical School and Texas State University System. At
UT Medical Branch on Galveston Island where corruption has a long and storied
history, medical school officials have said they will not look for
influence-loaded correspondence because the search would not be
administratively feasible. “Please be advised,” wrote UTMB records manger Becky
Wilson in July of this year, “that UTMB’s database does not track information
you are seeking. To determine which applicants may have had a legislative
inquiry would require a manual review of thousands of applicants files.”
Ms.
Wilson is not denying that the practice exists, mind you—so-called “legislative
inquiries”—only the university’s willingness to look for them. It’s important
to remember that Gov. Perry chose the nuclear option here. He didn’t have to.
He did the right thing, which was easy for him here because he’s an Aggie, not a
Longhorn. It's no skin off his scrotum. But it is skin off ours, the public's. Cronyism is against society’s rules for a reason, it’s inefficient as
well as unfair, but after being used here, the
revelation of improper influence in admissions will now be hard to get back in
the bottle. There are a lot of scenarios possible of what we have been seeing
for the last year or so at the Capitol but a cynical bet is that the governor
wanted to get rid of Bill Powers and that proved more difficult than first
foreseen. Wallace Hall was chosen to “look for something” on Powers—and, as it
turned out, there was something to find. The public should be happy that a
corrupt system has been exposed but it’s hard to believe UT or anyone else is
going to do an exhaustive and complete review of legislator influence, as UT
has promised. These are bodies that everyone, including legislators and probably
the governor, want to keep buried. Wallace Hall kept his head down
and plowed forward even when he was being accused of every wrong in Texas short
of the Kennedy assassination. Personally, not much is known about him, but from
his behavior he must have a big pair. Early on he was specifically chosen for
investigative tasks as a regent, which sounds very much like he was brought in
for a specific purpose, an administrative hit, so to speak. He certainly seems to have taken
his work seriously. In the end, he got there and he has done the public a great
service.
Evan Smith, for his part, has shown that the
weakness of his business model is mostly ethical. He’s also shown he’s a
formidable guy. If you ignore his reliance on the state for funding, in Smith
you’re left with a kind of journalistic impresario not often seen in our
remarkably staid profession. You've heard of yellow journalism, this is the
green kind.
A recent article in the New Yorker discussed the
concept of “disruptive innovation” in a journalism context (studied and
rejected as a new business model for the New York Times) in
which the traditional wall between the editorial and business sides of a
publication is allowed to fall. Evan Smith has already done that. Twice, if you
include his time at Texas Monthly. While the Hall-Powers coverage
has been one-sided, that’s small price to pay (mostly borne by Regent Hall) for
the good that this conflict ultimately did, and for the on-going good the Tribune does.
There may be corruption at work here, in the Tribune-UT
axis, but if there is, the heavy isn’t Evan Smith.
It’s John Thornton, the Tribune's money guy..
If you look at investments made by the
University of Texas Investment Management Company—the 21-billion-dollar bank
account that funds UT System. If you look at the past few years UTIMCO has had investments
valued at almost $190 million with Mr. Thornton’s Austin Ventures. The current
figure, per UTIMCO, is about $50 million.
Last year the Bay Citizen, which
outed Mark Yudof’s expensive housing back in the day, merged with an
organization called the Center for Investigative Reporting and the CIR has
continued looking into operations at the University of California and recently
published another interesting story. In the last decade, of the top ten
university investment funds in the country the absolutely worst-performing was
UC, per the CIR report. Number nine on the list, the second worst performance
was a familiar name: UTIMCO.
You would think that the performance of the
huge UT investment fund would be a fertile area for Tribune reporting:
maybe one of the website’s much-praised databases, showing state investment
returns and bonuses paid. But in almost five years the Tribune has
produced no examination of this sensitive area of state policy. That’s a
surprise because the really juicy scandals at UT in recent years have almost
always involved UTIMCO—as long as there’s been a UTIMCO—the last two decades or
so, yet the only two significant mentions of UTIMCO activities in Trib history
have been two interviews—one of them video and one print—of UTIMCO CEO Bruce
Zimmerman in which he was allowed to praise his own company’s performance
undisputed. In the most recent, the written interview, a few weeks ago,
Zimmerman claimed that in his seven years as CEO, $3.7 billion has
been added to university coffers.
That may be true but what he failed to add—and
was not asked—was a different standard, what the CIR measured, how he has
performed against his peers. That’s how you tell if an investment fund is
making money.
One might also mention that Bruce Zimmerman has received $6.4 million
in bonuses in the last five years alone. UTIMCO president Cathy Iberg has
received $4.3 million in bonuses in the same time, a period of improving but
still lackluster returns. Indeed, when last we looked Zimmerman’s
brother-in-law was a partner at Austin Ventures. According to UTIMCO, the
Austin Ventures returns have been acceptable but it’s probably also true that
John Thornton has made more money from the University of Texas than he has
“given” to the Tribune. For Smith and Thornton both, relying on the
University of Texas has turned out to be an effective business plan. The issue here is connectedness more than
corruption.
The world is getting smaller everyday and certain businesses, like
venture capital, and the new journalism, rely on relationships that aren’t communicated
clearly by a single line at the end of a story. Ditto, the law. Austin has
become a particularly wired town and that includes the courthouse. Gregg Cox,
the prosecutor who’s investigating Regent Hall, is a Longhorn booster and knows
President Powers personally and has declined to recuse himself. Once again,
also on this legal front, we won’t be getting the real story about why UT's shit
happens the way it does. Not if the Texas Tribune has anything to say about it.