Inside the Capitol

Wednesday, July 26, 2006

7-28 A generous Buyout?

Syndicated Columnist
SANTA FE -- Did Manny Aragon receive an overly-generous buyout from New Mexico Highlands University? That is the prevailing sentiment. But it may not be accurate.
Aragon had two years left on a four-year contract at Highlands. His base pay was $165,000 a year, plus benefits. His golden parachute, as many call it, was $200,000 plus 18 months of health insurance.
It takes a long time for most of us to make that kind of money. I happen to think that executives in higher education and industry are overpaid. But that isn't the point. We're talking contract law here.
When a coach is fired for one or more losing seasons, the common practice is to buy out the remaining years on his contract. When it happens to an executive, it usually involves health, retirement and other benefits added in.
Aragon's buyout is considerably less than that. But couldn't he have been fired for cause and save the public forking over any money for a buyout? It's possible, but the attorney fees would be substantial and a loss in court could greatly increase the taxpayer cost.
How likely was NMHU to win its case? The regents' biggest beef against Aragon was an insubordinate attitude. Insubordination is the easiest cause for firing. The problem with Aragon's insubordination was that it was an attitude, not an act. Acts are easy to prove. Attitude is tricky.
The deterioration of the relationship between Aragon and the board began when Aragon bullied the regents into giving him a performance bonus when they didn't think he deserved it. You can't fire a guy for that.
Incompatibility is grounds for divorce, but it won't uphold a firing in court. The board would have had to start reining in Aragon with an increasing number of directives until he clearly broke one.
The board expressed problems with Aragon's use of the "president's fund," for which he solicited donations and made expenditures without informing the regents.
Aragon transferred some $50,000 of his unused political campaign contributions into the fund and used it mostly to fund expenditures for needy students. He said all the regents needed to do to get information about the fund was to ask.
Nevertheless, board chairman Javier Gonzales said the school was looking into whether the fund complied with state law. Aragon funneled the money into a university account as required by state law.
As far as the necessity of accounting for the expenditure of those funds is concerned, governors receive an expense account from state funds, for which there is no requirement to report. Some governors have reported, some haven't. It doesn't appear Aragon is in much trouble there.
The use of private money for public purposes is a very gray area. I was concerned about that when the sheriffs reinvestigating the Billy the Kid case used private funds to conduct an official criminal investigation.
They didn't report receipts or expenditures or run them through the county budget. But I couldn't get any public officials, including the attorney general, interested in looking at it.
The major disappointment of the board with Aragon was that he wasn't accomplishing goals of the regents, such as increased fundraising, increased student enrollment in key program areas, and generation of new policies and long-range plans.
That's not insubordination. It's unsatisfactory work performance, similar to a coach's losing season. Such acts usually result in contract buyouts rather than firings because of the necessity to prove to a court that the unsatisfactory work performance was uncorrectable.
And that involves documenting clear directions from the board and efforts to help correct the unsatisfactory performance.
If the regents had voted to fire Aragon, would he have fought it? Though Manny is an attorney and influential in politics, he hasn't gotten rich in life so far. He probably could have found an attorney to represent him on a contingency basis. But as a former legislator, Aragon was much more attuned to working something out.
FRI, 7-28-06

JAY MILLER, 3 La Tusa, Santa Fe, NM 87505
(ph) 982-2723, (fax) 984-0982, (e-mail)



Post a Comment

<< Home