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In fact, all of Bush's regent appointees were contributors to his own campaign and to the Republican Party. But giving lavishly to the governor and his party was a habit that Tom Hicks and his associates adopted rather suddenly themselves shortly after George W.'s election victory. Until then, as measured by his checkbook, Hicks's political sympathies had been bipartisan and even mildly Democratic, but after that initial $25,000 contribution to George W. in December 1994, Hicks and his brother, Steven (who runs CapStar Broadcasting for Hicks, Muse), eventually gave another $146,000 to the governor's election war chests. His partners have donated tens of thousands more. Together they are among the highest donors to George W. Bush since 1995.
During the same period, the Hicks, Muse firm has given $180,000 in soft money donations to Republican committees, while Hicks and his wife, Cinda, have given about $90,000 to various GOP candidates and committees in Texas and elsewhere. Contributions to the Republicans from him, his partners, his lobbyists, and his relatives total well over half a million dollars since his confirmation as a regent.
Even before UTIMCO officially opened for business, the newly aggressive investment policy spearheaded by Tom Hicks took effect. Within the first few months of Bush's inauguration in January 1995, the University of Texas commenced an ambitious schedule of private investment deals that dwarfed those made the year before. In all of 1994, the university had placed a total of $36 million in three limited partnerships; in February 1995 alone, it invested almost twice that amount. The regents' financial plan restricted new private equity commitments for 1995-96 to $144 million, or one fourth of the funded portfolio for the fiscal year. Yet according to a review by the Texas state auditor's office, the actual commitments made in 1995-96 nearly doubled that amount, reaching $285 million.
On what basis did Hicks and his fellow board members direct those rapidly increasing flows of money? No one outside UTIMCO really knows, because until the summer of 1999 they kept their deliberations secret. The "due diligence" reports prepared by UTIMCO employees to evaluate potential investments have never been available to the press and public, and the board meetings were closed until last fall. This obsession with secrecy mirrored the investment industry, in which the names of limited partners and their financial agreements are traditionally kept confidential and are often hidden behind generic corporate names and opaque offshore registrations. Until very recently, the citizens of Texas had no way to ascertain precisely where their largest public university's money had been invested and with whom. Even though considerably more information about UTIMCO's investments is now available, the identities of its limited partners remain hidden without an exhaustive search of SEC filings--and sometimes are impossible to discover even then. Remarkable as this arrangement might seem, it was perfectly lawful according to the Texas attorney general.
With most of those transactions and partnerships safely concealed behind thick corporate veils, it was not easy to discover that the regents--and a bit later, the directors of UTIMCO--were funneling millions of dollars from the university endowments to the friends and business associates of Thomas Hicks, and also to major Republican contributors (who were sometimes the same people). But gradually, under pressure from a few newspapers, public-interest organizations, and legislators, a smattering of names and figures were pried out of the UTIMCO files. The most persistent digging was undertaken by R. G. Ratcliffe of the Houston Chronicle; the task of forcing open UTIMCO's meetings was shouldered largely by Suzy Woodford, the executive director of Common Cause Texas, and State Representative Sylvester Turner, a Houston Democrat. And from that piecemeal information, a familiar pattern began to emerge.
Under the guidance of Tom Hicks, a growing portion of the university's investment choices had a decidedly Republican tinge. On March 1, 1995, the regents voted to place what would prove to be a comparatively modest $10 million with The Carlyle Group, a Washington-based merchant bank that is chaired by Frank Carlucci, the former secretary of defense in the Reagan Administration. The specific fund was Carlyle Partners II, described with exquisite delicacy on the firm's Web site as pursuing "an investment strategy focused upon the intersection of government and business." Among Carlyle's partners are numerous former Reagan and Bush administration figures, including Richard Darman, economic adviser to President Bush, and James Baker III, the polished former White House chief of staff, secretary of state, and Bush-Quayle campaign chairman.
That a firm run by his father's associates would be awarded an investment contract only weeks after George W. took office was unseemly at best. But the Texas governor had his own long-standing and lucrative ties to Carlyle that dated< back almost a decade. Among his more obscure business activities was a corporate directorship at Caterair, one of the nation's largest airline-catering services, which was acquired by Carlyle in 1989. The next year, a seat on the company's board was arranged for George W. by the former Nixon White House aide and longtime Bush associate Fred Malek, who was then an adviser at Carlyle. Although Bush remained on the catering company's board until 1994, his earnings as a Caterair director are not specified on his personal financial forms filed with the Texas Ethics Commission.[br />
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