UT Law's Forgivable Loans to Faculty "Not Appropriate"

Thursday, November 15, 2012

The process Larry Sager, the University of Texas School of Law's former dean, used to secure a $500,000 forgivable loan for himself was not transparent, created "an impression of self-dealing that cannot be condoned," and should be permanently suspended, according to a University of Texas System report released Tuesday. 

The report, written by UT System Vice Chancellor and General Counsel Barry Burgdorf, examines the forgivable loan program the University of Texas Law School Foundation used to supplement some professor's salaries — including the money Sager received at his own suggestion. 

The revelation of the loan played a key role in UT-Austin President Bill Powers' decision to ask Sager to step down from his post last December. It also prompted the UT System board of regents to further investigate the relationship between the law school and the foundation, a separate organization that supports the school financially with a current endowment of about $111 million. The foundation halted the loans in the wake of Sager's departure. 

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