Eddie Bravenec, Columnist
Daily Texan
January 24, 1996

Now that the dust has begun to settle over the UT System Chancellor William Cunningham's resignation from the board of directors of Freeport-McMoRan, one question still remains: Why did the debate over naming a building for Jim Bob Moffett include Cunningham?

Board of Regents Chairman Bernard Rapoport wrote that no conflict of interest existed because the chancellor's relationship has always been "a matter of public record, their chancellor has never personally gained from any of their [the Moffetts'] relationships with the University, and his ability to fulfill his public duties has not been impaired in any way."

But Cunningham was less than forthright about his relationship with Freeport. In addition to his salary as a Freeport board member, the chancellor owns stock options in Freeport -- options not reported on his financial disclosure statement.

Stock options are the ultimate investment in a company. If the company does poorly, the holder of the options loses nothing. If the stock does well, the holder receives the difference in value between the stock when it was "offered" and when it was "cashed."

In a position of public trust, any potential financial gain connected with the office should be reported. While not strictly required to report stock options, Cunningham was certainly less that honest about his financial stake in Freeport. The article in The Daily Texan was the first time Cunningham's possible conflict of interest in regard to stock options before was publicly disclosed.

Rapoport's statement that Cunningham never benefited personally from Freeport's relationship with the University is inaccurate. Freeport wanted close ties with the University. They got Cunningham, and Cunningham received money and stock options. Freeport has suffered a number of attacks in the press by environmental groups (such as Save Our Springs) for its attempted development of environmentally sensitive areas. The UT System chancellor serving on the Freeport board implies that the power and prestige of the University back Freeport.

Jim Bob Moffett is an influential and generous contributor to the University. As the CEO of Freeport, he is in a position to further his standing among alumni as a UT supporter. What better way to gain support in the eyes of the alumni and administration than to hire the chancellor?

William Cunningham is an intelligent and capable man. But the primary reasons that he was hired to serve on the Freeport board are almost certainly based on his public positions as chancellor (and his previous position as president) rather than his abilities as a private citizen.

Rapoport's argument that Cunningham was attempting to serve the University's interests by his service on the board must be tempered by the fact he accepted compensation for his service.

If board membership is part of his "primary responsibility," his salary as chancellor should be adequate compensation. Accepting financial profit for a position gained from a public trust is a clear conflict of interest.

Cunningham's decision to serve on the Freeport board was understandable. His decision to accept financial compensation for the service created a conflict of interest.

Bravenec is a senior in math.