One can understand the impulse of some bureaucrats and legislators to shield themselves from oversight. But it’s surprising to find a citizen — a businessman, no less! — cheerleading for such recklessness… Until you realize he presided over “one of the largest financial institution failures in U.S. history.”
Kenneth Jastrow, the disgraced former CEO of Temple-Inland and board member of Guaranty Bank, is accused with others in a billion-dollar lawsuit by the failed banks’ creditors and the FDIC of causing “the failure of [the bank] by fraudulently looting… the Bank of assets exceeding $1 billion.”
Yep, Mr. Jastrow clearly knows a thing or two about governance.
The apologists for higher education bloat were apparently interested in how they can loot their institutions and taxpayers. They found their man.
So, of course, the Texas Legislature’s special committee on higher ed listened raptly to Mr. Jastrow’s every word at a hearing on Monday. Mr. Jastrow was invited to testify on the virtues of mismanagement… though that’s not what he (or they) called it.
The accused bank looter, whose actions allegedly forced a massive taxpayer bail-out, essentially told lawmakers that bureaucrats in Texas’ universities need less oversight from the boards of regents.
Unsurprisingly, Mr. Jastrow is one of the key leaders in a pro-bloat organization called the “Texas Coalition for Excellence in Higher Education” which sprung up this year to oppose reform and transparency efforts.
If Kenneth Jastrow defines “excellence” in education the same way his bank defined “guarantee” to its depositors and creditors, anyone taking his higher-ed advice is putting Texas in serious trouble.
Ironically, Mr. Jastrow chairs the University of Texas’ $3 billion capital fundraising campaign. (Someone might want to double-check the UT books; under Jastrow’s leadership Guaranty’s balance sheets were allegedly misrepresented.)
Kenneth Jastrow is being pursued legally under the Texas Fraudulent Transfer Act.
So, of course, he is just the kind of fellow the legislature needs to be listening to about ethical governance structures!
According to Mr. Jastrow (who allegedly stripped his bank of “assets beyond the point of solvency”), the problem in higher education is — apparently — that the bureaucrats have been too constricted in spending taxpayer money and tuition revenues.
This alleged bank looter wants the boards to have more regents, all serving much shorter terms. The net effect? Diffusing the power of the regents and empowering unelected, unaccountable bureaucrats.
And make no mistake, that’s precisely what the bloaters want to see.
By removing meaningful governance from the universities’ governing boards, taxpayers and tuition-payers will face even higher escalation of costs and a reduction in quality.
If you have money to burn and are looking for ways to create insolvencies and force organizational implosions, Kenneth Jastrow is probably the right guy to talk to.
If, on the other hand, you want to control costs and protect students and taxpayers…
Frankly, Texans should be outraged that State Sen. Judith Zaffirini and State Rep. Dan Branch — the special committee’s co-chairs — would take testimony from someone who presided over corporate actions “fatally crippled and doomed-to-fail” the bank, resulting in “the American taxpayers to suffer the enormous losses…”
Letting someone like Kenneth Jastrow, accused of breaching fiduciary responsibility to an almost unimaginable degree, lecture Texas on fiscal management is a bit like asking Jeff Skilling and other Enron execs talk about transparency.
Kenneth Jastrow presided over a bank collapse that has cost taxpayers a fortune. Texans cannot afford to be ‘Jastrowed’ in higher-ed by the legislature.