AUDIT: George P. Bush, ‘Alamo Trust’ CEO Are Fleecing Texas Taxpayers
A largely underreported official state audit confirms that Texas Land Commissioner George P. Bush lied about numerous illegal and unethical Alamo-related financial activities occurring on his watch, but the audit fails to tell Texans about the one-man ethical wrecking-ball George P. Bush is letting run more and more of the Alamo’s present and future: Douglass W. McDonald.
McDonald gets paid multiple times by Texas taxpayers for the same activity, and the total amount he receives is secret.
As Bush told senators Tue., Dec. 5, 2017, the full financials of his Alamo nonprofit matrix must be kept secret due to “wealthy and successful” board members worried about their “legal liability.”
As Bush stated before the Senate Finance Committee on Dec. 5, 2017,
We have members of our board who are wealthy and successful and they have incredible amounts of liability … The idea is to prevent legal liability.
The commissioner’s comments beg the question, “Liability from what?” — since the Alamo is owned by the people of Texas. Could McDonald be hiding his illegal profiteering behind the complex matrix of three, different Alamo nonprofits condemned by the official state audit?
That’s exactly what board minutes finally released by Bush appear to reveal. CLICK HERE TO READ BOARD MINUTES
A summary of key developments demonstrated in the minutes of the Alamo Endowment:
- McDonald is introduced by Bush as CEO of all three Alamo nonprofits.
- McDonald advocates erasing evidence of impropriety through a “consolidated audit,” saying the current “corporate structure is overly complicated and should be simplified.”
- McDonald announces he is merging the nonprofs into ONE SINGLE MEETING & VOTING STRUCTURE (see, “resolutions” section.)
- McDonald is authorized by a vote to write and sign checks upwards of $50,000, including himself (if approved by board).
See notated images, extracted from the Alamo Endowment minutes released at the behest of Texas’s Attorney General.
Below, here is the part of the minutes proving that McDonald is CEO of “all three” Alamo nonprofits created by Bush, and that he consolidated voting and accounting into one, single structure — reasons being legally dubious:
Name change of ACM, Inc. to “Alamo Trust” to evade AG Paxton’s transparency edict:
Proof that McDonald (“the CEO” as quoted below) can sign checks of $50,000 or less without additional vote by the board:
Proof of “consolidated audit” decision, which does not show line item expenditures or reveal what the money was actually spent on:
In short, taxpayer-salaried Alamo Trust CEO Doug McDonald merged all three non-profit boards into one voting structure and authorized himself to sign checks of $50k or less without additional voting of the board. Nice work, if you can get it.
McDonald has abused his check-signing power quite liberally, according to a report by the San Antonio Express-News. In their story, Express-News reports that McDonald asked for an illegal reimbursement of an Alamo Foundation (not Trust) check worth $68,000.
That’s more than the average annual income for most Texans.
The check in question is pictured below:
Express-News further reported that the GLO’s own attorney says McDonald’s “error” happened more than once — so much so in fact, that he’s been reprimanded.
“Through a Texas Public Information Act request,” the San Antonio Express-News reported it “obtained an electronic scan of a check for $65,078.42 from the Remember the Alamo Foundation to the Alamo Trust, for reimbursement of personnel expenses from October through December 2017.”
Express-News further explains:
The foundation was formed to raise funds for the Alamo and its long-term master plan. It and the trust are subsidiaries of the Alamo Endowment and have their own staffs and salary expenses.
Jeff Gordon, general counsel for the Land Office, said the $65,078.42 check “corrected an error by Alamo finance staff members who had mistakenly paid foundation employees out of funds from the trust, then sought reimbursement from the state to the foundation,” the Express-News continued, adding that “reimbursements should not have included two foundation employees on the replenishment requests to the state since the foundation does not receive state dollars.”
“The Alamo finance department should never have included those two employees on the replenishment request” to the state, Gordon harshly stated. “They have been instructed, ‘Don’t do this.’”
The check, pictured above, features Doug McDonald’s signature, plain as day. These types of repeated, “accounting errors,” are in addition to McDonald’s stunningly large taxpayer salary for being CEO of Alamo Trust.
Alamo CEO Douglass McDonald is using Alamo preservation funds to enrich himself, according to a separate report by San Antonio Express News.
“The General Land Office is paying Alamo CEO Douglass W. McDonald $2,000 a day to oversee the state-owned shrine,” the report states.
“The yearlong agreement limits payment to 14 days a month, meaning McDonald’s annual compensation could reach $336,000, more than double what Land Commissioner George P. Bush earned last year,” it continues.
And that’s not accounting for McDonald’s possible travel expenses, which state contract promises to recoup the Cincinnati, Ohio native — including his year-round hotel stay in San Antonio.
Considering that McDonald is paid 14 days a month, we can multiply 14 by 12 months to arrive at roughly 168 days of housing costs at an estimated average hotel rate of $100-a-day to arrive at an extra $16,800 (at least) yearly cost to Texas taxpayers. And that’s not including McDonald’s assumed roundtrip airfares or other nonspecific travel expenditures Texas may compensate.
But that’s not a fair conclusion, says GLO Communications Director Bryan Preston, who alleges McDonald voluntarily does not charge for housing accomodations, though records show he does get reimbursed for travel.
McDonald was reimbursed for roughly $8,050 in travel costs as of May of 2018.
The agency did not provide a breakdown showing the hours McDonald worked each month, but Preston said McDonald billed for 128 of the 150 days worked through May of 2018.
Though McDonald’s contract limits pay to 14 days a month, his services can be reduced or expanded “by mutual agreement.”
And then there’s McDonald’s blatantly illegal management contract with the GLO, where his private company NGOgro, LLC., is being paid to oversee all Alamo-related subcontracting and communications concerning the redesign plan.
Thiscontract is in addition to his already taxpayer-funded role as Alamo Trust CEO ($300k per year, according to SA Express-News), and in addition to any checks written in his roles as CEO of the Alamo Foundation and Alamo Endowment nonprofit boards.
Between its effective start date and May, 2018 when the audit was completed, the GLO paid McDonald’s company NGOgro, LLC a staggering sum of $264,049, reports the Houston Chronicle.
So, Doug not only has a de facto taxpayer salary as CEO of Alamo Trust, he’s also paying himself second and third taxpayer salaries from preservation funds too.
A subsequent review of all available public records by Big League Politics reveals Bush’s involvement in the decisions condemned by the audit to be the result of one “original sin.”
Specifically, Bush erred legally by creating a complex maze of overlapping nonprofits with conflicting missions, extensive conflicts of interest and zero transparency to public.
Conflicts of interest alone are inherently unavoidable due to the way he “organized” his nonprofit archipelago.
We reported on these concerns a year ago, before the audit was even released in full. BLP’s analysis confirmed the results of the audit.
As BLP then reported,
Texas Land Commissioner George P. Bush is giving Douglass McDonald — head of the 100 percent taxpayer-funded “Alamo Trust” — lucrative private contracts, as well as appointments to oversee potentially millions of dollars at two other nonprofits.
Bush maintains “competing fiduciary duties” and obligations to multiple entities, a textbook conflict of interest. Bush can’t “rule” impartially if there’s a dispute, for example.
And, without question, Bush is the responsible party in all Alamo-related nonprofits. Bush is effectively signing contracts with himself(GLO). As head of the GLO and as chair of the both the Endowment and Alamo Foundation boards, Bush signs contracts between the GLO and the identified nonprofits for both parties.
GLO should reconsider the structure and funding model it uses for operating the Alamo. A contractor performs the daily operations, but it uses state resources to do this, as it does not have its own funds or other assets. This is an unusual situation that has created complexity and a lack of clarity regarding the nature and the use of the funds used for Alamo operations. It is also the root cause of several of the observations in this report.
In effect, the BLP and the GLO arrived at the same analysis, and almost identical conclusions — now that’s “big league” research reliability.
The audit also notes that GLO was noncompliant with state laws governing limits on petty cash accounts in excess of $500. Improper accounting methods had permitted the Alamo Trust to shovel petty cash into non-state accounts totalling $793,295.60 — quite an inordinate sum of money not reported in the state treasury’s annual revenue figures — in essence, concealing cash.
The audit also states that the Alamo Trust, managed and run by Douglass McDonald, has “not met some contractual requirements. Those include timely submission of monthly financial documents, a museum policy and a written management plan,” according to the San Antonio Express-News.
The written management plan is supposed to include a “current and projected number of employees, staff management structure, budget, etc.” Without that info, illegal money movements can be concealed or their discovery delayed.
McDonald was in charge at the time of these findings.
Bush isn’t innocent when it comes to McDonald’s actions, either. Bush has on multiple occasions fought lawmakers and even forced the Texas Attorney General to require the release of Endowment board minutes, financials and other documents for public review.
On May 17, 2017, Attorney General Ken Paxton ruled that, insofar as Alamo Complex Management, Inc. (the management nonprofit in charge of Alamo’s day-to-day operations) is a creation of the General Land Office, and GLO maintains its records, “we conclude the information is subject to the [public records] act.”
The GLO disputed the ruling, with Bush spokeswoman Brittany Eck contending:
Under the current system, both the GLO and ACM are required to maintain a full set of books. This duplication requires handling the money and the accounting twice, which in turn requires numerous reconciliations to ensure all the revenue and expenses are properly accounted for on the GLO’s books.
Eck says that all three of the GLO’s nonprofit partners “are audited annually by an independent CPA firm.” But Eck’s position is incorrect, since the AG ruled the opposite.
So, how then, did Bush evade transparency? When Bush refused to comply with the AG’s edict demanding release of board minutes, he did so by cleverly changing the name of the nonprofit which manages the Alamo’s day-to-day operation, and is coincidentally, also the largest recipient of the over $100 million dollars in appropriated Alamo renovation funds. Of the money allocated, $75 million was taken out of the Texas “rainy day” fund, adding debt to the already heavy backs of Texas workers.
How did renaming the nonprofit in charge of the majority of taxpayer money allow Bush to evade Paxton’s directive? Answer: by reorganizing the original management company from Alamo Complex Management, Inc. (ACM) to its current name — “Alamo Trust” — AG Paxton’s earlier demands could be legally disregarded.
That’s because, technically, Alamo Trust is not the same nonprofit as ACM, Inc., so all of the AG’s earlier rulings and legal opinions about Bush’s disobedience of basic financial transparency laws are irrelevant.
So, what now?
In the past month, Welcome Wilson, Jr., the wealthiest board member of Bush’s Alamo Endowment (and a voting member of all three nonprofits created by Bush to oversee his “Re-Imagine the Alamo” plan) testified against HB 1400. The bill, introduced by State Rep. Hefner, would merely require the same financial transparency of Alamo nonprofit books required of other state agencies.
Here’s all the bill actually requires of the GLO and Bush’s nonprofits, from the final text of HB 1400 after its report out of committee:
The bill requires a report to be submitted in the format required by the GLO not later than the third business day of the month following the month in which an expense is incurred. The report must include:
· the date the expense was incurred;
· the amount charged;
· the name of the vendor who billed for the expense; and
· a brief description of the expense.
The bill requires the GLO to post each submitted monthly report on the GLO website not later than the fifth business day after the date the report is submitted by posting a link to the report on the GLO home page.
Outrageous, or modest?
Wilson’s testimony against HB 1400 was heard before Texas Rep. Cyrier’s Culture, Recreation & Tourism Committee on April 2, 2019.
After that hearing, a committee substitute for HB 1400 was heard on April 23rd and CSHB 1400 passed by a 7-0 vote out of committee that same day.
In his remarks, Wilson condemns proposed transparency requirements of HB 1400 as “creating more red tape” and diverts “prescious money to honor the defenders” and finally suggests that it “creates bureaucracy and inefficiency.”
Ironic, considering that the audit released in May of 2018 by the General Land Office makes the same charges of Bush’s nonprofits on which Wilson prominently serves.
The audit concludes just the opposite of Wilson: that continued operation through Bush’s nonprofits and outside of Texas transparency laws, is “inefficient” and contributes to “unnecessary bureaucracy.” (See, image below.)