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Continued from page 3

Published on January 06, 2000

But that doesn't necessarily mean e-Texas is a self-fulfilling prophecy on privatization, Sanders says. Hammond says e-Texas will ask independent experts to analyze the costs and benefits of business doing certain government services. Those are complicated analyses, Hammond admits, but ones he thinks can be done free of bias.

Michael Granof, a University of Texas professor who wrote the textbook for the governmental accounting course he teaches, warns that assessing the benefits of outsourcing is a tricky endeavor.

"There are many ways to determine cost and benefit," Granof says. "Give me ten minutes, and I can make an argument both for and against outsourcing the same service by making different assumptions. I can tilt the argument either way."

When social and political issues come into play, such as state employee job security, the outsourcing debate gets more difficult to assess objectively. Granof says some government functions should be outsourced but the public should be skeptical of any recommendations because of the difficulty in doing an objective cost-benefit analysis.

"Should Carole Rylander do this kind of review on outsourcing? I offer a resounding yes," Granof says. "Should we privatize everything that comes under review? I would say probably no."

So how can the public fairly assess whether the e-Texas outsourcing recommendations are good for the state or merely good for the businesses that would get the work? Essentially it's a question of whether the public believes Rylander wants to do what is best for Texas or simply what is best for herself. It comes down to whether the public can trust her.


The Texas Democratic Party got a tip during the summer that Steve Koebele, Rylander's general counsel, had recorded phone conversations in his office without the other party's consent. Playing on a hunch and a hope, the party asked the comptroller's office in a formal open records request for copies of the tapes.

The office responded that the tapes did not exist. Reporters began asking Sanders, Rylander's spokesman, what his boss knew, when she knew it and what she was hiding. He again responded: "There are no tapes."

"The questions were answered honestly," Sanders still says.

There's a fine line between honesty and dishonesty, trust and mistrust. Sanders's statement was true, but only because Rylander allowed him to play an insulting game of semantics with the press and the public. There were no tapes because they already had been destroyed. Only when the Democrats and reporters got wise and asked if there ever had been any tapes did Rylander begin to come clean. She conceded that Koebele had taped four phone conversations without her knowledge or permission but that the tapes no longer existed.

Koebele, who had left the agency under the guise of a voluntary resignation, wrote a memo ultimately supplied to reporters that described each of the four recordings. According to his accounts, none of the tapes contained anything inflammatory that could be used against Rylander.

"No other audio tape was made. No other audio tape exists," his memo ends. Sanders says the agency was within its legal right to toss the tapes because they were the equivalent of written notes taken during meetings.

As the comptroller's story about the tapes kept changing, so did the original line that Koebele had left the agency on his own to pursue other interests. Rylander decided it was in her best interest to let everyone know that she had fired him for secretly taping phone conversations. She wanted the public to know that she wouldn't allow such deception to occur in her office.

She didn't have a problem, though, in allowing herself and her aides to purposely mislead the public and press for a time about the existence of the tapes.


The Texas Tomorrow Fund is a state-run program that allows families to set aside money to cover a child's future college tuition costs. Earlier this year the Rylander administration decided to create a liaison post with the professional advertising and public relations firms hired to market the fund.

Eight job applicants stepped forward, some of them with impressive résumés for the position.

Jeff Whitehurst applied, citing his graduate degree in international marketing and his company, which developed private, prepaid tuition loan programs for financial institutions -- experience that might have come in handy in trying to market the Texas Tomorrow Fund.

Another applicant, David Hurlbert, had been executive director of an outpatient mental health and substance abuse center in Belton since 1992. His résumé noted that he "manages all community relations" for the center.

Hurlbert says he has conducted numerous management training and education seminars and has had 75 research articles published. "I have advanced knowledge of human behavior. I also have experience in public relations, and as a consultant, I've done marketing studies for various businesses," he says.

However, the comptroller's office never got the chance to explore the breadth of experience of Hurlbert, Whitehurst or five of the other applicants. "I did not even get an acknowledgment," Hurlbert says.

Instead, the only job hopeful interviewed was a 27-year-old woman who was just 18 months out of college. Helena Colyandro had only five months of full-time work of any kind.

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