U. T. System Public Affairs Director Jenny LaCoste-Caputo forwarded information to you yesterday related to your inquiry concerning consideration of issues related to a childrens' hospital in San Antonio by the U. T. System Board of Regents on September 7, 2012. It is possible that you did not receive all or part of my response. Please consider the following note as well as the attachments above as my complete and formal response: This note will confirm our conversation from last week regarding whether Board of Regents Chairman Gene Powell had any conflict of interest related to the Board's decision to approve a partnership with Vanguard Baptist for the building of a children's hospital in San Antonio. As we discussed, state law governing this issue is very clear; there is absolutely no prohibited conflict barring the Board's action. Chairman Powell was not required by state law to disclose a previous indirect business relationship through AirStripTechnologies Inc. with Vanguard Baptist or similar previous relationships with the other two proposers Methodist HCA and Christus Healthcare, and he was not required to excuse himself from the September 7, 2012, meeting during which the vote was taken. (Meeting posting, meeting minutes, and a chart prepared by UT Health Science Center - San Antonio and distributed at the meeting are attached above and the audio recording of the meeting may be accessed at http://www.utsystem.edu/board-ofregents/meetings/board-meeting-2012-09-07.) As we have previously discussed, Chairman Powell did not vote on this matter, although state law would not have prohibited his participation by discussion or vote. Chairman Powell has, from the start of his term as a member of the Board of Regents, been forthcoming about his interests in AirStrip and clear that his actions as a Regent would comply, in all respects, with those laws. Section 51.923 of the Texas Education Code, attached, controls in this situation and requires disclosure and refraining from vote for a Board member with a substantial interest in the entity with whom the Board wishes to contract. The test under Section 51.293 for both Chairman Powell and his spouse and sons, as relatives within the first degree, is whether there is a substantial interest in Vanguard Baptist, not AirStrip. Under the definition of substantial interest in Section 51.293, Chairman Powell does not and has never had a substantial interest in Vanguard Baptist. In addition, information provided by Chairman Powell's son Dr. Cameron Powell and by AirStrip confirms that Dr. Powell does not and has never had a substantial interest in Vanguard Baptist. Dr. Powell's salary is paid by AirStrip and he advises that he does not hold Vanguard stock and has not served as an officer or board member of Vanguard Baptist. I have attached for information a copy of the Minutes of the Board of Regents meeting of September 7, 2012. The meeting was properly posted and conducted. You have had an opportunity to view the webcast of the open portion of the meeting. The meeting also included a short, properly posted executive session on legal issues related to the proposed children's hospital. While I am precluded by law from disclosing what was discussed in executive session, I can inform you that a legal issues session is limited to receiving advice from counsel and directing questions to counsel on legal issues. The Board members and the Chairman may not speak to one another or engage in discussion with one another. Accordingly, there was no discussion of the merits of the three proposals between or among members of the Board. I appreciate the opportunity to provide the additional information concerning Chairman Powell's relationship with AirStrip to assure you have the most complete and correct facts even if they do not relate directly to the legal inquiry. As you note, Chairman Powell's most recent personal financial disclosure statement, covering calendar year 2011, reports that he is associated with several AirStrip limited liability corporations. The reporting on the LLCs was made in error by Chairman Powell's CPA. Chairman Powell resigned as CEO of AirStrip and from all manager positions with AirStrip LLCs effective 12/31/2010. I am advised that this overreporting error will be corrected immediately. Therefore, on September 7, 2012, his only involvement with AirStrip was as a minority shareholder.