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UT Regent Hall Failed to Disclose Lawsuits

University of Texas System Regent Wallace Hall didn't disclose a long history of courtroom battles before his Senate confirmation two years ago, a lapse that prompted some lawmakers to say they feel misled.

Dallas businessman Wallace Hall, Jr. takes notes at the University of Texas Board of Regents meeting on Feb. 14, 2013 in Austin.

University of Texas System Regent Wallace Hall Jr., who has pressured UT-Austin to be more transparent and accountable, is coming under fire for failing to disclose a long history of courtroom battles before he was appointed to the board.

The Texas Tribune found at least six lawsuits that were not listed on Hall’s regent application as required. One of the lawsuits — a nasty business dispute with multiple appeals — featured Dallas trial lawyer Lisa Blue, who was on Hall’s team, plus a cameo appearance by Sen. Royce West, D-Dallas, who was on the other side.

Hall, a Dallas entrepreneur, acknowledged the omissions and promised to provide new details to Gov. Rick Perry’s office "shortly." He said the failures were unintentional. But several top lawmakers, already upset about the pressure Hall and other regents have put on UT Austin, say they feel misled about Hall’s background when the Senate confirmed his nomination to the UT board two years ago.

Sen. Kel Seliger, R-Amarillo, chairman of the Senate Higher Education Committee, suggested Hall’s omissions were intentional.

“Clearly this was withheld. It would seem to indicate Mr. Hall felt like it was disqualifying for his nomination,” Seliger said. “Withholding that, I think, is a very, very serious thing.”

The lawsuits themselves may or may not prove embarrassing to Hall, but the failure to disclose them provides fodder to critics who think the UT Regents are on a “witch hunt” to hurt its flagship university and take out its leader.

Hall has been at the center of an ongoing power struggle between the system, which has emphasized transparency in recent years and applied some of academia's strongest conflict of interest rules to its institutions, and UT-Austin President Bill Powers.

The Dallas businessman spearheaded the board's controversial effort to seek an external investigation of a forgivable loan program at the University of Texas at Austin School of Law. The program began when Powers was dean of the law school. Because the matter had already been reviewed internally and was subsequently shut down, a majority of senators have deemed the proposed outside review unnecessary.

Hall also drew attention during his own investigation into the matter by ordering the university to provide him with dozens of boxes of the university's responses to open records requests over the last two years, a broad request about which lawmakers have also expressed concerns.

"He's the one that has really led the charge for things like that, and now he's the very one that's kind of hidden stuff," said Rep. Jim Pitts, R-Waxahachie, chairman of the powerful House Appropriations Committee. "This isn't transparent. Admitting it when you got caught, that's just not sufficient." Pitts said he thinks Hall should now resign from the board.

Sen. Kirk Watson, D-Austin, who was on the Senate Nominations committee that considered Hall’s 2011 nomination, called the missing litigation history “very troubling” and vowed to get to the bottom of it at upcoming hearings of a joint oversight committee on higher education, tentatively planned for next week.

“The purpose of the application and nominations process is so that you have this kind of disclosure so that any questions that members of the committee might have, they’re in a position to ask about them or to ask for additional information,” Watson said. “Now, basically two years later, to find that there’s information we may not have had raises a number of serious questions. I think the oversight committee will look forward to seeing that those questions are answered.”

Sen. Kevin Eltife, R-Tyler, said he wants Hall to appear in person before the oversight committee to explain why the information wasn't provided.

“I would be disturbed to find out that someone seeking Senate approval did not disclose something on their application,” Eltife said. “We use that application to make a lot of our decisions.”

The governor’s office has already asked Hall to provide supplemental information about his litigation history.

“The governor expects applicants to provide accurate and complete information as requested on their applications,” said Perry spokeswoman Lucy Nashed. “We have asked Hall to quickly provide any outstanding information.”

Hall, who graduated from UT Austin in 1984, is the founder and president of Wetland Partners, LP. The company operates the Trinity River Mitigation Bank, set up to offset wetlands destruction that has been approved by the U.S. Army Corps of Engineers and that often accompanies private development and government projects. The Texas Department of Transportation, among Hall’s customers, has paid the Trinity River Mitigation Bank $1.1 million since 2010, online records show. 

Hall has also been involved in numerous land deals and oil and gas ventures. And over the years some of them have taken detours into Texas courtrooms, over condemnation, contract disputes, royalty payments and other issues.

When Hall filled out an application in December 2010 to become a UT regent, he listed only two lawsuits, both of which involved his investment partnership, West Fork Partners. But Hall left off at least six state and federal lawsuits involving other companies. Hall, in an email to the Tribune, could not say for sure if there were others. 

“Without engaging counsel to review the previous 25+ years for any and all litigation that numerous business investments have faced, I'm sure I have missed something along the way,” Hall said. He said the cases the Tribune found were mostly interrelated, and involved property disputes or oil and gas exploration.

The most prominent lawsuit that wasn’t disclosed pitted a company Hall founded, Bluff Power Partners, against an ill-fated partnership he formed with Dallas millionaire Bill Esping. The joint venture was formed to sell methane gas extracted from a Dallas landfill. 

Each side blamed the other for the failure of the partnership.

Hall sued Esping and related parties for breach of contract and fiduciary responsibility, saying they fraudulently took the partnership into bankruptcy and financially damaged his company as a result. His star-studded team included Blue, widow of the late Dallas trial lawyer Fred Baron. She helped pick the jury while renowned plaintiff's attorney Mike Kaeske argued the case in court.

Esping’s lawyers claimed Hall engaged in insider trading to help friends and family cash in on his non-public knowledge of a pending bond transaction that was required as part of the deal. Hall denied all the allegations.

A Dallas County jury agreed with Hall, found the defendants acted with malice and delivered a whopping $37 million verdict in his favor. It was one of the largest jury verdicts in Texas in 2011. Settlement papers make it impossible to know the actual amount collected.

In an email, Hall noted that when he filled out his application paperwork he did disclose the federal bankruptcy case, which was related to his separate state lawsuit over the failed business partnership. He also said he briefed the governor’s staff about the vast and complicated legal proceedings at the time he was asking to become a regent.

“I do not recall the specifics,” Hall wrote in an email. “I have been asked by the governor’s office to supplement my disclosure and will do so shortly.”

West, the Dallas senator, said it would have been nice to get that information before the 2011 Senate confirmation hearings. West disclosed on his 2011 Personal Financial Statement that he filed a legislative continuance in the lawsuit on behalf of one of the defendants being sued by Hall's Bluff Power Partners.

“When you don’t have disclosure, the Senate doesn’t have the opportunity to look at everything when considering the nomination,” he said. 

Tribune reporter Reeve Hamilton contributed to this story.

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