UT regents ease conflict-of-interest rules on investing

AUSTIN — The University of Texas board of regents today voted to relax conflict-of-interest rules to allow members of an oversight board to have co-investments with the state's university endowments.

The board in 2000 had adopted a rule barring all co-investment between the university endowments and members of the governing board of the University of Texas Investment Management Co., UTIMCO.

The rule grew out of reporting by the Houston Chronicle disclosing potential conflicts of interests in UTIMCO investments made by governing board members with friends and well-connected political donors.

The new rule will allow board members to co-invest with the university endowments as long as the investment is less than 5 percent of the total amount in the investment fund.

The University of Texas at San Antonio has fired two tenured engineering professors for allegedly violating the school's ethics policy when they bought a piece of land in Helotes that students were studying for a class project.

In letters sent last month, UTSA President Ricardo Romo accused Alberto Arroyo and Chia-Shun “Rocky” Shih of putting their personal business interests above those of the students when they bought the parcel last September, forcing the students to abandon their project midyear and start over.

Romo also faulted the professors for ignoring a department boss' warning to avoid such conflicts of interest and for failing to tell students or administrators about the purchase.

The professors' behavior violated an ethics rule barring state employees from “making personal investments that could reasonably be expected to create a substantial conflict of interest between the employee's private interest and the public interest,” Romo wrote in a July 25 letter.