PEYTON WOLCOTT - SANDY KRESS / AKIN GUMP TEXAS LOBBYING CLIENTS

Conservative Commentary - Akin Gump/Texas Lobbyists

Cy-Fair's David Anthony
(C) at resort with bar cart
girl (L), AIG vendor Ken
Coffey (R) at 2:30 pm on
Friday, Apr. 20 of TAKS
testing week

P E Y T O N W O L C O T T

How we take back our children's education:
one person, one question, one school at a time.

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"Superintendents and school boards
would have to be willing to be perceived
as being anti-open government and
anti-transparency to turn down requests
that they post their check registers online."

SEEING IS BELIEVING
Although Katy ISD supe Leonard Merrell has just retired, his self-
named "Leonard E. Merrell Center" (above) at Katy ISD still bears his name not
once but twice, and remains the only such edifice in the U.S. which a working
supe named for himself. (Updated July 4, 2007)

UNBELIEVABLE BUT TRUE

Another day in paradise:
Texas' hardworking supes
golfing with vendors during TAKS
testing week
By Peyton Wolcott
Tue., Apr. 24, 2007/1:04 am

Remember Dallas ISD's tech guy
Ruben Bohuchot's use of
vendor Micro System's"Sir
Veza"? The yacht's
been-- forgive us -- "Rehabbed."

You're Gov. Perry
for a day: Your
pick for Texas'
next edu-
missioner is ____?
By Peyton Wolcott
Monday, June 25/1:08 am

You've got one
basic decision; on
it everything else
hinges:

Are you really ready to do something about
the mess our current vendor-driven public
school system has become, or are you
going to appoint someone from the same
old tarnished Education, Inc. gene pool
we've been culling from for the past dozen
years?
As guv-for-a-day, the person you hire will either
continue to plunge Texas public education deeper into
the subjective touchy-feely fuzzy math
whole-language abyss in which it's become mired --
the one which has already produced a generation of
young adults who can't tell you what six times nine is
without a calculator and who don't know where
Alsace-Lorraine is and why knowing that's important to
the future of our Southern border with Mexico -- or
you'll find a way to appease business interests and still
put someone in charge who is smart and savvy
enough to make the changes that are necessary.

The nominees
The names most frequently presented this
past week: Robert Scott, Sandy Kress, Bill
Hammond, Ric Williamson, Kent Grusendorf,
Talmadge Heflin, John Folks, David Anthony,
Leonard Merrell and Mike Hinojosa.

what's wrong with our public schools today
for many diverse reasons--including being a paid
education lobbyist--one of the biggest practical if not
political strikes against Kress is the fact that his son
does not attend Austin ISD public schools but instead
attends a private preparatory school in Austin.
Somehow it doesn't seem quite cricket that a fellow
who's made a fortune from public education would be
sending his child to a private school--especially if he
really believes, as again and again he says does.

Is Kress tied to growing
New Orleans PS scandal?
Former NOPS board president Ellenese
Brooks-Simms pleaded guilty to bribery charges earlier
this week and "has agreed to cooperate fully with the
FBI and the U.S. Attorney's office.... The plea by
Brooks-Simms marks the zenith thus far of a five-year
federal probe into Orleans Parish schools that has
netted 28 additional indictments of employees and
contractors on various bribery, fraud and theft
charges....Records show the company has paid
lucrative fees to lobbying juggernauts including...Akin
Gump." (SOURCE--New Orleans Times-Picayune)
Sandy Kress is a partner in Akin Gump.

For those of you just back from ten years Zimbabwe,
Kress is also a former Dallas ISD school board trustee
and was the education advisor to President Bush
credited as being the primary architect of No Child Left
Behind.

Among the groups with which he's been associated:
Texas Business & Education Coalition on whose board
he serves with the likes of Mike Moses, Bracewell
partner David Thompson and TASA's Kay Waggoner.

According to Texas Ethics Commission records, for
just one activity--as paid lobbyist for Texans for
Excellence in the Classroom--
Kress expects his annual compensation to be in the
neighborhood of $100,000 to $149,999.99.

Sandy Kress
(2nd from left)

Education, Inc.
candidates
Business
sector

Although Sandy Kress
epitomizes for many parents
and taxpayers

The blogospher on Kress
I still consider it one of life's great mysteries as to how
anyone who listens to Kress for as long as it takes to
spell c-o-r-r-u-p-t-i-o-n could be impressed by anything
he has to say about any legitimate conception of
education. (SOURCE--School Matters)

Kress has used his knowledge and connections to
earn millions as a high-powered lobbyist for test
publishers...He’s made about $4 million in lobbying
contracts, in large part from companies that profit from
provisions of the law he helped to design. (SOURCE--
Emily Pyle/Texas Observer)

[Regarding NCLB/Reading First] Surely from the
beginning, from the crafty engineering and writing of the
law to its implementation, cronyism and conflicts of
intereset have abounded. Who has benefited from this
regressive and oppressive law? The financial benefit to
Sandy Kress alone is probably staggering. (SOURCE--
Educator Roundtable)

Thanks to Sandy Kress, several brand-new spigots
had begun to pump billions in federal dollars out of
public schools and into the private sector, where
corporate interests had only to hold out their buckets
and fill ‘em up. (SOURCE--Daily Kos)

Bill Hammond is another
business lobbyist--he's
president of the Texas
Association of Business--
and someone else many
parents and taxpayers

Bill Hammond

To make this easier for you, guv-for-a-day,
assuming you're short on time, here's the short-form
EZ graphics version; the longer form with factual
supporting data follows:

Sandy Kress, Bill Hammond, Ric Williamson and
Kent "Pushing Laptops Is My Middle Name"
Grusendorf are profiled at right.

Austin insiders say Cy-Fair's David Anthony has never
really been in the running and that his and San
Antonio's John Folk's and Dallas' Hinojosa candidacies
may be more a function of contract negotiations with
their boards; you see the idea.

Does Texas really need an education
commissioner who would leave his teachers and
students behind back in his hometown to play golf at a
resort on Friday of TAKS testing week with an
insurance vendor (below)? Or a paid lobbyist with
deep and rich connections to education vendors?
That's what we'd get with David Anthony or Sandy
Kress.

Sandy Kress, Bill Hammond,
Ric Williamson, John Folks,
David Anthony, Leonard
Merrell and Mike Hinojosa.

xxx

The blogosphere on Hammond
BRIEF: The head of one of Texas' largest business
lobbies was taken into custody Monday after refusing to
turn over documents concerning the organization's
secretly-funded advertising campaign during the 2002
legislative races. Texas Association of Business
President Bill Hammond also decided not to pay his
$500 fine for contempt and was ordered held in the
Austin jury room until 5 p.m. when the Texas Court of
Criminal Appeals set bail at $1,500 and he was
released.
(SOURCE--KPFT)

Leave it to Shirley Neeley and her ventriloquists in the
governor's office to appoint a "task force" of political
insiders to investigate cheating on the TAKS test. All five
of the appointees are connected to the Texas Public
Education Establishment....The five are Dr. Carole
Francois, education consultant; Bill Hammond, chief of
the Texas Association of Business; Sylvia Hatton,
former executive director of the TEA's regional
education service center in Edinburg; George McShan,
former president of the state and national associations of
school boards; and A.J. Rodriguez, head of the San
Antonio Chamber of Commerce. Some might
remember Dr. Francois from days when she was
former Dallas ISD Supt. Mike Moses' chief of staff. She
also worked for Moses at TEA. (SOURCE--Scott
Parks/Dallas Morning News Blog)

Kent Grusendorf
The former House Public Education chair was defeated
for a variety of reasons last year including his
relentless pushing of taxpayer-
funded laptops for all students. Putting someone so out
of touch with the populace, including teachers, in
charge of TEA seems not wise. Further, he was
unseated by Diane Patrick, a former teacher and
considered a friend of public schools.

Texas Senate Education chair Florence Shapiro
on Sandy Kress:
"When it comes to public schools and the betterment of
children, I don't know of anyone who cares more
about that than Sandy Kress. Ms. Shapiro said she
sees Mr. Kress as a friend, not one of the estimated
300 Austin lawyer-
lobbyists who represent clients interested in public
education law. ' I have no idea who his clients are,'
she said."

Comment: Apparently Mr. Kress' interest in public
schools and the betterment of children does not extend
to his own son, given that his son attends a private
prep school.

Developing . . . .

Texas supes golfing on Friday, April 20, 2007
during TAKS testing week at
TAS/MUS "Boerne Tourney"

TAS/MUS scrapbook
golfing pix here
1 2 3

Education lobbyist and lawyer Sandy Kress discussing NCLB on PBS

2007

Akin Gump
Strauss Hauer
& Feld LLP
Austin, TX
Less Than
$10,000.00

D.H. Texas
Development L.P.
c/o Darryl Hammond
Port Lavaca, TX
Less Than
$10,000.00

Early Care and
Education
Consortium
Washington, DC
20005
$10,000 -
$24,999.99

would like to see kept as far away from public
education as legally possible.

KRESS: HIS CLIENTS AND HIS ACTIVITIES
Saturday, March 5, 2005
By SCOTT PARKS
The Dallas Morning News

Education adviser to President George W. Bush in the 2000 and 2004 campaigns.
Played key role in helping Mr. Bush push the No Child Left Behind law through
Congress.

Consultant to Council of Chief State School Officers, an association of state
education commissioners. Mr. Kress advises them on how to implement No
Child Left Behind's requirement that all states set up accountability systems based
on high-stakes test scores.

Consultant to the Business Roundtable, a Washington D.C.-based consortium
of chief executives of major American companies. The organization has been
active in education issues for many years.

Co-founder of the Texas Education Reform Caucus. TERC was created as an
advisory committee for state Rep. Kent Grusendorf, R-Arlington, chairman of the
Public Education Committee in the Texas House of Representatives.

Adviser, consultant and lobbyist for Pearson Education, a worldwide company
that publishes textbooks and runs high-stakes test programs in Texas and other
states.

Lobbyist for Kaplan, a division of The Washington Post Co. Kaplan provides a
wide range of educational products and services. It first made its mark in the
test-preparation industry.

Lobbyist for The Teaching Commission, a New York-based think tank started
by Louis V. Gerstner Jr., chairman of The Carlyle Group, a private global

Remember the golfing supes on TAKS testing
day? Sandy Kress' client Pearson was a
sponsor.
Curious who rode in the cart with the
Pearson rep?

SANDY KRESS (AKIN GUMP) - TEXAS ETHICS COMMISSION LOBBY LISTS 1998-2008
ALSO: Information regarding The Broad Foundation (scroll down to grey boxes)

MGT of America
is a management
consulting firm
that provides
consulting
services primarily
to state and local
government organi-
zations, including
K-12 and higher
education.(SOURCE
--MGT of America)

AKIN GUMP
WASHINGTON,
DC
LOBBY LISTS

Total Lobbying
$127,789,000
(1998-2004)_
Pearson PLC
Lobbying
1998-2004:
$940,000

Lobbying 2004:
$220,000

WHEN AKIN
GUMP
CALLS,
WASHING-
TON, D.C.
LISTENS ?
In addition to
representing
Pearson, half of
whose earnings
appear to come
from taxpayers'
property and
other taxes,
Akin Gump also
represents
online
gambling, a
South Korean
steel maker, a
bank in Japan,
waste
management
and the
de-colonization
of Puerto Rico.

American
Express
$500,000
(1998-2004)

American
Family
Enterprises is a
direct-mail
subscription
agent with
sweepstakes--
and financial
problems,
"response rates
down and lawsuit
settlements
costing millions,"
and "a flurry of
lawsuits and
lower response
rates"
.(SOURCE--The
Magazine for
Magazine
Management)
$420,000
(1998-2004)

Business
Roundtable
"is an association
of chief executive
officers of leading
US companies
with $4.5 trillion
in annual
revenues and
more than 10
million
employees.
Member
companies
comprise
nearly a third of
the total value of
the U.S. stock
markets and
represent over
40% of all
corporate income
taxes paid."
(SOURCE--Busines
s Roundtable)
$60,000 (2006)

Cassava
Enterprises
(Gibraltar) Ltd.
operates several
high-profile
gambling
websites.
$1,040,000 (all
firms)
(1998-2004)

Citizens'
Educational
Foundation is a
non-
profit organization
dedicated to the
decolon-
ization of Puerto
Rico.
$4 million paid to
all lobbyists.
(1998-2004)

Commerce
Clause
Coalition, a
waste
management
company.
$940,000 to all
lobbyists
(1998-2004)

eBay
$220,000
(1998-2004)

Foundation
Executives
Group; "in a
sign of growing
concern among
foundations about
a controversial
legislative
proposal that
could force them
to increase their
annual
contributions to
charity, a group
of 18 large funds
has hired an
influential former
member of the
House of
Representatives
to lobby against
the measure in
Congress. The
Foundation
Executives
Group...
represents such
organizations as
the Carnegie
Corporation and
the Ford
Foundation."
(SOURCE--The
Chronicle of
Philanthropy)
$480,000
(1998-2004)

Granite
Broadcasting;
reorganized after
bankruptcy.
$680,000
(1998-2004)

Hosts Learning
is "a leading
provider of
classroom and
mentoring &
interven-
tion solutions that
support the
teaching
process."
(SOURCE--Hosts
Learning)
$560,000
(1998-2004)

Hyjek & Fix,
lobbyists, spent
$1.5 mil lobbying
in 2006.
$280,000
(1998-2004)

Indoor Tanning
Ass'n
$760,000
(1998-2004)

Inter-American
University
(Puerto Rico) is
the largest private
institution on the
island and in all
of the Caribbean.
  $360,000 (2006)

Linebarger,
Goggan is
Texas' largest
property-tax
collection law
firm.
$600,000
(1998-2004)

Nehemiah
Foundation
"You'll be
amazed at the
number of great
ministries that the
Nehemiah
Foundation
supports. And
100% of
donations goes
directly to these
ministries!"
(SOURCE--Nehemi
ah Foundation)
$420,000
(1998-2004)

Pohang Iron &
Steel Co.
(South Korea)
"From its
beginnings in
1968 as a small,
government-owne
d steel company,
Pohang Iron &
Steel Co.
(POSCO) has
grown into one of
the world's
leading steel
producers. "
(SOURCE--Oracle)
  $820,000
(1998-2004)

Samsung
Heavy
Industries is "a
broad range of
ser-
vices in the
shipbuild-
ing industry. SHI
consists of three
complementary
sectors--Shipbuildi
ng
& Offshore
Division, Digital
Control Sys-
tem and
Construc-
tion Division,"
Korea.
$610,000
(1998-2004)

Shinsei Bank,
Japan.
$880,000
(1998-2004)

asf

Akin Gump
Strauss Hauer
& Feld LLP
Austin, TX
Less Than
$10,000.00

D.H. Texas
Development L.P.
c/o Darryl Hammond
Port Lavaca, TX
Less Than
$10,000.00

Early Care and
Education
Consortium
Washington, DC
Less Than
$10,000.00

Governor's
Business
Council
Austin, TX
$10,000 - $24,999.99

Kaplan Inc.
New York, NY
Less Than
$10,000.00

Akin Gump
Strauss Hauer
& Feld LLP
Austin, TX
Less Than
$10,000.00

Kaplan Inc.
New York, NY
Less Than
$10,000.00

Linebarger
Goggan Blair
& Sampson
Austin, TX
Less Than
$10,000.00

Pearson
Education
Upper Saddle River,
NJ
$10,000 - $24,999.99
Texas
Businesses for
Educational
Excellence
Houston, TX
$50,000 - $99,999.99
The Teaching
Commission
New York, NY
Less Than
$10,000.00

2004

Affiliated
Computer
Services, Inc.
(ACS)
Washington, DC
Less Than $10,000.00
Akin Gump Strauss
Hauer & Feld LLP
Austin, TX
Less Than $10,000.00

2003

Akin, Gump,
Strauss, Hauer
& Feld, LLP
Austin, TX
Less Than
$10,000.00

K12 Inc.
Mc Lean, VA
$10,000 - $24,999.99
Kaplan, Inc.
New York, NY
Less Than
$10,000.00

Linebarger
Goggan Blair
& Sampson,
LLPA
Austin, TX
Less Than
$10,000.00

PRIMEDIA Inc.
New York, NY
Less Than
$10,000.00

Charter
Schools USA,
Inc.
Fort Lauderdale, FL
Less Than
$10,000.00

Horace Mann
Insurance
Company
Springfield, IL
Less Than
$10,000.00

K12
Mc Lean, VA
Less Than
$10,000.00

Kaplan, Inc.
New York, NY
Less Than
$10,000.00

2001
No clients
listed for
2001.

Community
Education
Partners
Nashville, TN
$ 0.01 - 9,999.99

ForeLogic
LLC
Richardson, TX $
0.01 - 9,999.99

FreeMarkets, Inc.
Pittsburg, PA
$ 0.01 - 9,999.99

1998

AT & T
(American
Telephone &
Telegraph)
Austin, TX
$ 0.01 - 9,999.99

Community
Education
Partners
Nashville, TN
$ 0.01 - 9,999.99

Millers Mutual Fire
Insurance Co.
Fort Worth, TX
$ 0.01 - 9,999.99

PG & E Corp.
San Francisco, CA
$ 0.01 - 9,999.99

Texans For
Education
Austin, TX
$ 0.01 - 9,999.99

Texas
Instruments,
Inc.
Dallas, TX
$ 0.01 - 9,999.99

Texas Surplus Lines
Assn., Inc.
Austin, TX
$ 0.01 - 9,999.99

1999

AT&T
Austin, TX
$ 50,000.00 -
99,999.99

Cinemark USA, Inc.
Plano, TX
$ 0.01 - 9,999.99

Community
Education
Partners
Nashville, TN
$ 25,000.00 -
49,999.99

ForeLogic
LLC
Richardson, TX   $
10,000.00 -
24,999.99

McGraw-Hill
School
Division
New York, NY   $
10,000.00 -
24,999.99

PG&E Corp.
San Francisco, CA
$ 0.01 - 9,999.99

Texans For
Education
Austin, TX
$ 25,000.00 -
49,999.99

Texas
Instruments,
Inc.
Dallas, TX
$ 10,000.00 -
24,999.99

Texas Surplus
Lines Assn., Inc.
Austin, TX
$ 0.01 - 9,999.99

Mobile Satellite
Ventures L.P.
Reston, VA
Less Than
$10,000.00

Pearson
Education
Upper Saddle River,
NJ
Less Than
$10,000.00

From Kaplan ad:
"You have high
expectations of a
premium LSAT or
MCAT preparation
program.You should
—a successful
performance on
your standardized
exams will open
many doors for
you."
"Kaplan Test Prep
and Admissions--
The World Leader
in Test Preparation"

2006

Mobile Satellite
Ventures L.P.
Reston, VA
Less Than
$10,000.00

Pearson
Education
Upper Saddle River,
NJ
Less Than
$10,000.00

Texans for
Excellence in
the Classroom
Austin, TX
$100,000 -
$149,999.99

NOTE: Early
Care has no
standing with the
Texas Comptroller

Edvance
Research Inc.
San Antonio, TX
Less Than
$10,000.00

Governor's
Business
Council
Austin, TX
Less Than
$10,000.00

MGT of
America Inc.
Tallahassee, FL
Less Than
$10,000.00

Full view of
Texas Ethics Commission
Lobby Lists here:
http://www.ethics.state.tx.us/dfs/loblists.htm

SEC Filing (8-K)
03-22-07:
"Affiliated Computer
Services, Inc. today
announced that on
March 22, 2007,
one of its
subsidiaries, ACS
State Healthcare,
(continued below)

Affiliated
Computer
Services,
Inc. (cont'd)

("ACS State
Healthcare"), and
the North
Carolina
Department of

2005

Affiliated
Computer
Services Inc.
(ACS)
Washington, DC
Less Than $10,000.00

PRIMEDIA
Education
includes Films
Media Group, a
leading source of
educational
video, and
PRIMEDIA
Healthcare, a
continuing medical
education business.

Films Media Group
is a leading
source of videos,
DVDs, and
CD-ROMs to
schools, colleges,
and libraries in
North America,
with approximately
2,900 owned and
10,100 licensed
educational videos,
DVDs, CD ROMs
and related
products.

PRIMEDIA
Healthcare (PHC)
is the unrivaled
leader in Continuing
Medical Education
(CME)
programming.
Since 1992, PHC
has built a solid
reputation for
award-winning
programs that
combine
authoritative,
compelling content
delivered with
immediacy and
convenience.

2002

RW Durham &
Co. (see below)

R.W. Durham &
Company
Torrance, CA
Less Than
$10,000.00
(continued below)

Security Benefit Life
Insurance Company
Topeka, KS Less
Than $10,000.00

Texans for
Education
Austin, TX
Less Than
$10,000.00

Texas Ass'n
for the Gifted
and Talented
Austin, TX
Less Than
$10,000.00

VeriTrust
Financial, LLC
Austin, TX
Less Than
$10,000.00

K12 Inc.
Mc Lean, VA
Less Than $10,000.00
(continued below)

Kaplan, Inc.
New York, NY
Less Than $10,000.00

Linebarger
Goggan Blair &
Sampson, LLP
Austin, TX
Less Than $10,000.00

Pearson
Education
Upper Saddle River,
NJ
$25,000 - $49.999.99

The Teaching
Commission
New York, NY
Less Than $10,000.00

K12 Inc.
(In Business Week)

When Lowell Milken and Ron Packard,
executives at education investment
company Knowledge Universe,
approached Bennett in November, 1999,
about heading up K12, Bennett insisted
that he would chair the company only if
Yale computer-science professor David
Gelernter, a fellow
computer-in-the-classroom skeptic,
signed on as the company's technical
adviser.

"I've been an anti-cheerleader of comuters
in education," says Gelernter, who lost
part of his right hand in 1993, when a
package he received from the Unabomber
exploded. "From what I've observed in
schools, we'd be better off unplugging
the computers and throwing them out."
Bennett says that Gelernter's presence
on the K12 team reassured him that the
company would emphasize old-
school academic achievement rather than
simply training kids in the newest
computer technology.

(SOURCE-- Alexandra Starr/Business Week)

Bill Bennett
Then at K12, Inc.

Lowell Milken (L),
Eli Broad (More
about Broad below)

expressed interest in becoming a trustee.
    "Eli is a tenacious, impatient, extraordinary person — I love him dearly," he added. "But I would never
expect that I was going to look up around my board table and see Eli."
    But Getty expense records show that Munitz has a business relationship with Broad that involves the
Getty.
    In August 1998, after a tour of Greece on Broad's yacht that included visits to Getty-sponsored projects,
Munitz was reimbursed by the trust for a $3,200 check he wrote to Broad to cover "gratuities and the use of
the phone" on Broad's boat. A cover letter to Broad from Munitz said the check was "only a very small token
of adequate participation, and stands only to reflect our gratitude for your support and for your elegant energy."
    The Getty paid for Munitz and his wife to dine at Valentino in Santa Monica with Broad and his wife,
Edythe, Getty trustee Louise Bryson and her husband, John Bryson, chairman of Edison International, and
another couple. The "working dinner" included conversations about the Getty, education and public television,
expense records show.
    In 2001, expense records show, Munitz was reimbursed $5,000 by the Getty for "yacht expenses" after
another trip to Greece, this time with the Broads, Riordans and Burkles, as well as AIG SunAmerica Chief
Executive Jay S. Wintrob and his wife.
    During Munitz's tenure, more than half the seats on the Getty's board of trustees have opened up. Some of
those who traveled with Munitz and Broad have filled those spots. Today, at least six of the 13 trustees have
links to Broad.
    Burkle and former Univision President Luis Nogales sit with Munitz on the board of KB Home. Wintrob,
added to the Getty board earlier this year, is chief executive of AIG SunAmerica, where Broad is chairman.
In addition, Ramon C. Cortines, former interim superintendent of the Los Angeles Unified School District, who
was on the Getty board when Munitz arrived, and USC President Steven Sample, who joined the board this
year, are advisors to Broad on education initiatives.
            --------------------------------------------------------------------------------
    In the late 1990s, the Getty did what officials say was a routine review of the trust's property holdings and
decided to sell the land across the street from Broad's front gate. The trust had acquired the land years earlier.
    Today, Munitz downplays the value of the lot. "At an 89-degree angle to the earth, this is not an attractive
lot to build on," he said.
    But an independent appraisal obtained by the Getty in 1992, which only considered about 60% of the land
included in the 2002 property sale, painted a different picture.
    The land is located in "the most prestigious neighborhood in West Los Angeles and the standard by which
all others are measured," it said, estimating its value at $1.55 million. Despite the "moderately steep terrain"
on its eastern side, the property's "highest and best use … is as a site for a single-family residence."
In 2000, a second appraisal done for the Getty put the value of the full lot at $2.7 million.
    The initial plan was to list the property publicly, soliciting competitive bids, Getty documents show. The
asking price was $2.295 million.
Real estate broker Joan McGoohan said the Getty asked her to approach Oakmont Drive residents first to
assess their interest. Specifically, she was asked to approach Broad.
    "He basically said, 'Not interested, too expensive,' " McGoohan said.
    At the same time, Broad's representatives say he made it clear that he did not want the Getty property
developed. A former Getty employee said Broad's attorneys raised a gamut of potential building and fire code
issues that could stall construction indefinitely.
    Broad's interest in blocking development on the land would be obvious to anyone who has visited his
home, designed by renowned architect Frank Gehry. A large new home there could have crowded the
dramatic entrance to Broad's estate and detracted from the sense of space surrounding it.
    Broad would not agree to an interview. Through a spokeswoman, he said he counteroffered $1
million for the land.
    At that point, the Getty reversed its plan to list the property publicly, McGoohan said, instead opting to
negotiate directly with Broad.
    "They didn't want to offend Mr. Broad," she said. "They didn't want to upset him."
    Officials at large nonprofits say there are ways to protect a foundation's interests when dealing with
potential conflicts of interest and property of debated value.
    "I would advise that it be marketed publicly," said Janne Gallagher, vice president and general counsel for
the Council on Foundations.
  "We would certainly have it appraised and sell it through an established broker or independent source," said
Nancy Feller, associate general counsel of the Ford Foundation. "We would not do it ourselves."
    In fact, Ford Foundation policy prohibits the sale of foundation property to employees, their friends or
relatives, even at fair market value, she said.
    In the case of the Getty property, Munitz stepped into the process.
    In a document obtained by The Times, he instructed two senior deputies on options for dealing with Broad
and directed them to send a formal memorandum back to him that included those options.
    Munitz's draft ordered his staff to delay listing the property and proposed several alternatives to a direct
sale to Broad. One option he suggested was for the Getty to promise not to develop the property in exchange
for a tax- deductible donation from Broad.
    Another was for Broad to donate "an appropriate residence, named for the donor" to the Getty in exchange
for a commitment not to develop the land. The only negotiating partner mentioned in the outline was Broad.
    Yet, aware of his ties to Broad, Munitz also instructed his deputies to include a sentence saying, "It is
essential to emphasize that our attorneys and advisors feel very strongly about certain alternatives that would
not be beneficial to either party, and there [sic] concern that you [Munitz] must maintain some reasonable
distance from this decision given your close relationship with Eli."
    Munitz sent his draft to Stephen Rountree, the Getty's chief operating officer, and Russell Gould, the senior
vice president for finance and investments.
They responded on Jan. 12, 2000, with a final memo addressed to Munitz. "At your request, we have now
delayed the listing of the Oakmont properties with Joan McGoohan in order to allow you a chance to discuss
the property with Eli Broad next week," it began.
    The Gould-Rountree version dropped Munitz's idea of a swap or donation from Broad, but otherwise
closely followed his draft.
It added that the Getty had set the asking price on the land at $2.295 million, factoring in the obstacles to its
development. It said the trust already had interest from multiple potential buyers, including from an employee
of the Getty Center's own architect, Richard Meier.
    "We have received many requests to purchase the property, so our expectation was that the property
would sell fairly easily for the construction of one great house or as additional personal property for one of the
neighbors," Rountree and Gould wrote.
    Stressing the property's sharply increasing value, Rountree and Gould suggested that the trust might
simply hold on to it.
    The yardstick for whether the Getty had received fair market value would be the appraisals and the real
estate agent's assessment, the memo said: "As you know, our auditors and the attorney general will
examine any sale of the property to determine that the board acted as responsible fiduciaries."
Negotiations with Broad continued for two years.
    Broad said he did not recall meeting with Munitz to discuss the property, and said he never negotiated
with Munitz himself, only with Rountree, Broad's spokeswoman said.
    The Getty did not seek a new appraisal for the Oakmont land, a step the state attorney general's office
recommends that all foundations take in such circumstances.
    "If you're exercising good business judgment, why would [you] sell it without a current appraisal?" asked
Belinda Johns, senior assistant for the attorney general's charitable trust section. Although Johns would not
comment on any specific case, she said in general, "You'd want to maximize your assets. In fact, you have
an obligation to."
    In April 2002, Rountree approved the sale of Getty land to Broad. The final price: $2 million.
    The board did not vote on the transaction but was informed of it, Getty officials said. John Biggs, the
current chairman of the board of trustees, referred questions about the land sale to the Getty spokeswoman.
    The Getty says the documents demonstrate that Munitz handled the sale ethically and responsibly.
In a written response to The Times, Getty general counsel Peter Erichsen defended the trust's actions. "The
lot was sold at arm's length for fair market value to the most practical and possible buyer," he said. "Dr.
Munitz suggested to Messrs. Rountree and Gould language for them to include in a memorandum to Dr.
Munitz, that he could then share with Mr. Broad, to make abundantly clear that it was essential for Mr. Broad
and his representatives to work directly with Messrs. Rountree and Gould, because Dr. Munitz could not
negotiate or conclude any transaction with him."
    Erichsen said the Getty had received a lower valuation for the land in 1999 that put its worth between
$1.5 million and $2 million, depending on the usability of the lot.
Further, he said, the property would have required a variance to develop, and as a neighbor Broad would
have been able to protest any proposed development with the city.
    Broad also may have been able to prevent access to Oakmont Drive, a private road maintained by a
neighborhood association, Erichsen said. Claymont Drive, which also borders the property, is a public road.
By negotiating directly with Broad, the Getty saved a broker's commission, Erichsen noted. Realtors say
they usually get 5% of the sale price, in this case $100,000. It also saved on other transaction costs, he
added.
    Rountree is now president of the Los Angeles Music Center, where Broad and Getty trustees Burkle and
Lloyd E. Cotsen are among 12 honorary directors.
    Rountree said the Getty got a fair price because the Getty's appraisals did not factor in a number of limiting
conditions on how the land could be used, such as unresolved questions about access to the two roads it
abuts and the lot's steep terrain.
    The statement from Broad's representative also said "the appraisal did not take into account that the lot
could not be developed because it was in a ravine and on a private street."
    Real estate professionals sometimes do factor in such limiting conditions. The Getty would not provide
The Times with a copy of the $2.7-million appraisal written in 2000.
    "We were overjoyed to sell the parcel for $2 million," Rountree said. "Mr. Broad was well aware of the
negative factors affecting the lot, and I know that he felt that $2 million was a very stiff price under the
circumstances."

A closer look at Eli Broad's 2002 Getty land deal (Los Angeles)

Health and
Human Services
("DHHS"), have
settled the
pending litigation
related to the
North Carolina
Medicaid
Management
Information
System
("NCMMIS")
contract between
them.
The settlement
provides that
DHHS has
rescinded its June
6, 2006 notice of
intent to terminate
the NCMMIS
contract and its
July 14, 2006
notice of
termination and
that the parties
have agreed to a
mutual
termination of the
contract. ACS
State Healthcare
has agreed as
part of the
settlement to
license to DHHS
certain work
product it
produced in
connection with
the NCMMIS
contract and

Getty Deal Raises Questions
Conflict-of-interest specter haunts
land sale to Eli Broad, a close friend
of the trust's CEO.
By Jason Felch, Robin Fields and Louise Roug
Los Angeles Times Staff Writers
December 20, 2004

The J. Paul Getty Trust sold a valuable
piece of Brentwood real estate in 2002

Barry Munitz (PHOTO--LATimes)

ARTNET NEWS/FOLLOW UP
More recently, editor Mark Lacter has reported in the Los Angeles Business Journal that the
Getty plans a full-frontal rebuttal to the L.A. Times investigation, which supposedly "vastly
overstated" Munitz' annual compensation (some of that $1.2 million is deferred, apparently).
Nevertheless, referring to a $7,000 trip on a yacht chartered by supercollector Eli Broad, a
$35,000 trip to Tuscany and a $72,000 Porsche SUV -- all of which went on Munitz's Getty
Trust expense account -- Lacter agrees that Munitz' "spending habits and perks are more
than a little out of whack. So is his judgment." Lacter ends his column with the literary
equivalent of a sigh of resignation, noting that if the Getty simply ignores the controversy and
says nothing, there's a pretty good chance "the questions will fade away."

for $700,000 less than its appraised value to billionaire philanthropist Eli Broad, a
close friend and professional associate of Getty Chief Executive Barry Munitz,
according to trust documents and officials.

Munitz directed his aides to delay listing the property so that he could discuss a
transaction directly with Broad, despite what Getty records call "many requests to
purchase the property," which is adjacent to Broad's hilltop estate.

Getty executives now say they conducted a proper sale and received full value for
the wooded half acre. Broad received no discount, they said, adding that they had
consulted counsel to make sure they followed the law.

Getty Museum/Los Angeles

"I played no meaningful, no material, no in-any-way-relevant role in
the transaction," Munitz said in an interview. "Everything I did was to
try to have the lawyers and the appraisers and the third-party people
be sure that there was no conflict of interest for me."

But Getty documents show Munitz spelled out negotiating strategies
to his deputies, even as he acknowledged that his relationship with
Broad required him to stay out of the deal. He also discussed the
property in person with Broad, he said.

A 2000 appraisal put the property's value at $2.7 million, $700,000 more than the sale price in 2002. Median
home prices increased 12% in Brentwood during that time, according to a real estate information service.
Getty officials say the land was worth less than the $2.7 million appraisal because a number of limiting
conditions would have made it costly and difficult to develop.
Penny Cobey, the Getty's acting general counsel at the time, refused to comment on her advice regarding
the land sale, citing attorney-client privilege. But she said: "It should not be concluded … that I approved the
proposed sale or advised that it go forward."
          Munitz's connection to Broad, which included working vacations abroad with
their wives, gives the Getty president entry into a tight-knit group of leaders in
education, philanthropy and politics. Broad's ties to Munitz and the other Getty
board members gives him sway with those who run the world's richest museum.
          Foundation executives and tax law specialists consulted by The Times about the sale said it raises
legal and ethical questions that could trigger scrutiny from the state attorney general's office or the Internal
Revenue Service, which regulate tax-exempt organizations.
          Private foundations such as the Getty are exempt from paying taxes because their assets are
dedicated to public use, not private benefit. When selling property, they are required to get fair market value.
"The obligation is to always put the interests of the trust first," said Arthur Rieman, managing director of the
Law Firm for Non-Profits in Los Angeles, a center that advises foundations nationwide. "If someone gets a
discount because of a personal relationship, then that duty is violated."
          Munitz's ties to Broad created a conflict of interest that should have kept him
from having any role in the transaction, Rieman and other experts said.
          "It could be argued that Munitz breached his duty to the organization as a
trustee," Rieman said.Munitz's relationship with Broad began over a decade ago and has deepened since
he came to lead the $6.8-billion Getty Trust.
          They met soon after Munitz arrived in California to become chancellor of the California State
University system in 1991.
          Munitz asked his staff for a list of 10 influential people with ties to CSU, and invited them to a small
dinner party at his house in Long Beach. One of them was Broad, a former CSU trustee and one of the
nation's largest philanthropic donors.

Rooted in education, their association soon
branched into other realms.
In 1994, Broad recommended Munitz for a position on the board at
SunAmerica Inc., his giant insurance conglomerate.
  In 1997, Munitz left CSU for the Getty. Two years later, after AIG acquired
SunAmerica, Munitz was appointed to the board of KB Home, a position that
pays $80,000 a year plus stock options. Broad was chairman of that
company until 1993.
  Not long after Munitz took the Getty's helm, Broad invited Munitz to sail
along the coast of southern France on his yacht, mixing recreation with
visits to a string of small museums.
  " 'Don't you think it would be nice if you actually knew something about
what you are about to get into?' " Munitz recalled Broad, a noted art
collector, teasingly asking him. Munitz came to the Getty with no
background in the art world.
   It was Munitz's first invitation to join Broad's "boat trip summers" and

(Top) AIG vendor Ken
Coffey paired with Cy-Fair
supe (golf cart sign below)

travels to such places as Croatia, Greece and Cuba with a circle of entrepreneurs and philanthropists. The
group sometimes included then Los Angeles Mayor Richard J. Riordan and billionaire investor Ronald W.
Burkle.

Tuscany, a Broad-Munitz joint-travel destination

Back in Los Angeles, Munitz and Broad's
collaborations in the arts, education and
politics continued.
Munitz was among a small group of
power brokers who walked down Grand
Avenue with Broad on a Saturday morning
in 1999, helping to inspire the billionaire's
vision for downtown revitalization.
Munitz said Broad's interests never
extended to the Getty. The period of art
that Broad collects is not featured at the
Getty, Munitz said, and Broad has never

Barry Munitz, circa August 2007

Getty Trust Head Steps Down without Severance [Updated]
Amid several controversies surrounting the J. Paul Getty Trust, Barry
Munitz has resigned as head, repay the organization $250,000 and
forego a severance without admitting any wrongdoing. Again as we
have seen recently, a confidentiality clause in the severance agreement
limits our knowledge of more details.

Here is the Getty Trust press release, which can't be found on the Getty
web site. And still here is the LA Times article from last June that first
described the lavish spending, outside income (akin to double dipping),
and use of museum resources by Dr. Munitz to pursue personal
interests.

The LA Times has reported on a number of issues relating to the Getty
Trust:

Marion True, a curator (now ex) on trial in Italy accused
of knowingly receiving looted items,

Board member Barbara Fleischman resigning last month
after making personal loans to that same curator after the
museum closed a $20 million deal to acquire her collection

The lavish spending, travel, and pay of Dr. Munitz, some only disclosed
in footnotes in tax filings

A lack of transparency that prompted the Council on
Foundations late last year to put the Trust on probation
as part of a relatively new process for monitoring ethics
and accountability

Despite the Getty Museum's international reputation and reach (and
nearly $10 billion in assets), many of these stories are treated as local or
specialty interest. It looks like only the New York Times and the Times
of London produced a byline story going beyond the LA Times & AP
coverage. Yet of particular universal interest here are not only the issues
of board accountability and executive compensation, but also the
importance of paying attention to the severance agreement whenever
leaders depart under a cloud.

Barry Munitz has been controversial both in his tenure at the Getty Trust
and previously as Chancellor of the California State University system.
Prior to that, he was vice-chairman of Maxxam, Inc. and was involved
in the administrations of both Pete Wilson and Gray Davis.

February 10, 2006 in Accountability, Boards, Charitable, Charities,
Charity, Foundation, Museums, NGO, NPO, Nonprofit, Nonprofits,
Organizations, Philanthropy | Permalink
http://www.typepad.com/t/trackback/660087/4236091
(SOURCE--Where Most Needed
The Charity Industry Observer Probing the Deeper Links & Linkages)

But the questions did NOT fade away:

Barry Munitz, June
2007
BARRY MUNITZ NAMED
CHAIR OF SIERRA
NEVADA COLLEGE
BOARD OF TRUSTEES
Disgraced former CSU
Chancellor Barry Munitz
resurfaced last week when
he was appointed Chair of
Sierra Nevada College,
Board of Trustees. Sierra
Nevada College is a liberal
arts college in ritzy Incline
Village, Nevada, with an
enrollment of just over 300
students. Munitz, who
resigned as president of the
J. Paul Getty Trust last year
amid allegations of
corruption, was granted a
“Trustee Professorship” by
CSU Chancellor Charles
Reed. He is being paid more
$163,000 during the first year
of his professorship at CSU
Los Angeles despite
teaching only a single
section. It remains unclear
what compensation Munitz
will receive for this new
appointment or how he will
execute his “job” at CSULA
while also serving on the
board at Sierra Nevada
College, which is nearly 400
miles from Los Angeles.

(SOURCE--California
Faculty Ass'n)
To find out more on Barry
Munitz go to: http://www.
calfac.org/munitz.html

THE 2005 BROAD PRIZE
REVIEW BOARD
Russlynn Ali, Executive Director, The
Education Trust West
Anne L. Bryant, Executive Director,
National School Boards Association
Douglas Carnine, Professor and
Director, National Center to Improve
the Tools of Educators
Carl Cohn, Clinical Professor, Rossier
School of Education, University of
Southern California
Christopher Cross, Senior Fellow,
Center on Education Policy
Charles Desmond, Executive Director,
Great Cities’ Universities Coalition
Frederick Hess, Resident Scholar,
American Enterprise Institute
Paul T. Hill, Director, Center on
Reinventing Public Education,
University of Washington
David Hornbeck, President, Children’s
Defense Fund Tom Houlihan,
Executive Director, Council of Chief
State School Officers
Phyllis Hunter, Consultant, Texas
Statewide Reading Initiative
Sandy Kress, Partner, Akin,
Gump, Strauss, Hauer & Feld,
LLP
Sara Martinez-Tucker, President and
CEO, Hispanic Scholarship Fund
Wendy Puriefoy, President, Public
Education Network Piedad Robertson,
President, Education Commission of
the States John Theodore Sanders,
Former President, Education
Commission of the States Anthony
Trujillo, Senior Associate, National
Center on Education and the Economy

Eli Broad / Sandy Kress
One intersection

Miscellaneous examples
of the intersection of
taxpayer-funded public
education & vendors

merit rather than seniority.

Consultant to the Governor's
Business Council, a group
of Texas business leaders
that have recommended a
wide-ranging list of changes
to public education law in
Texas. Charles McMahen, a
retired Houston banker,
chairs the council.

Lobbyist for Texas
Businesses for Excellence
in Education. The group
hired Mr. Kress to help get
the Governor's Business
Council recommendations
into Texas law. It advocates
stricter sanctions for schools
that are judged
"low-performing" based on
high-stakes test scores.
Houston investor Charles
Miller and San Antonio
businessman H.B. Zachry
Jr. are involved in this group.

Former lobbyist for K12,
which in 2003 unsuccessfully
pushed the Texas Legislature
to publicly fund so-called
virtual charter schools. K12
sells curricula that
home-schoolers can get over
the Internet. William J.
Bennett, a former U.S.
secretary of education, is a
director of the company. Mr.
Kress says he no longer
works for K12.

Former lobbyist for
Community Education
Partners. Under contract
with school districts, the
company runs alternative
campuses for problem
students who have been
kicked out of regular
classrooms. Mr. Kress says
he has not worked for CEP
since 1999.

SOURCES: Texas Ethics
Commission, Sandy Kress and
Dallas Morning News research.

2000

AT&T
Austin, TX
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49,999.99

Cinemark USA, Inc.
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Community
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McGraw-Hill
School
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PG&E Corporation
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$ 0.01 - 9,999.99

RIVER LTD.
Dallas, TX
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Texans For
Education
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$ 0.01 - 9,999.99

Texas Ass'n
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and Talented
Austin, TX
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Texas
Instruments
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McGraw-Hill
textbook

Munitz put $72,000 Porsche SUV
on Getty Trust expense account

2007
Bryan, Beth Ann
(00055189)

Akin Gump
Strauss Hauer
& Feld LLP
Less Than
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Early Care
and
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Washington, DC
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Edvance
Research Inc.
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JRL Enter-
prises Inc.
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Knowledge
Learning
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Less Than
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KU Education
Inc.
c/o Maron & Sandler
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Less Than
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MGT of
America Inc.
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Pearson
Education
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NJ
Less Than
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Texans for
Excellence in
the Classroom
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Wireless
Generation Inc.
Brooklyn, NY
Less Than
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BETH ANN
BRYAN

2008

Sandy Kress' ass't
Beth Ann Bryan's
Texas Ethics
Commission
2007 Lobby Lists

investment firm. The
Teaching Commission
advocates more rigorous
teacher-training programs and
paying them based on

R.W. Durham
& Co.
Association
Endorsements
(cont'd)
From "Durham
Marketplace" site:

Association
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value to us in
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Each year R.W.
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In addition to
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HOME

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Austin, TX
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Governor's
Business
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Austin, TX
$10,000 -
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Pearson
Education
Upper Saddle
River, NJ
Less Than
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DHHS has agreed to pay ACS State Healthcare the
aggregate amount of $10.5 million in four installments beginning
on or before March 31, 2007 and ending on or before June 30,
2008. In addition, ACS State Healthcare will provide certain
new services to DHHS under a new contract with a term of
two years and will be compensated based on achieving
certain levels of cost savings.