Wednesday, August 19, 2009

Universities May No Longer Hide Public Funds Or Evade Public Records Act

Universities May No Longer Hide Public Funds Or Evade Public Records Act
Wednesday, August 19, 2009

Assembly Appropriations Committee Approves Yee’s Transparency Bill

SACRAMENTO – The Assembly Appropriations Committee today approved legislation to ensure greater access to public records at the State’s public higher education institutions – the University of California (UC), the California State University (CSU), and the California Community Colleges.

SB 218, authored by Senator Leland Yee (D-San Francisco/San Mateo), will bring greater accountability to UC and CSU by updating the California Public Records Act (CPRA) to include auxiliary organizations that receive public funds or perform government functions on state campuses. UC and CSU have often evaded the public records act by shifting some responsibilities to foundations and other auxiliary organizations.

A shocking betrayal of the public trust was recently uncovered at the Sonoma State University Academic Foundation, which used donated funds to provide huge personal loans (now in default) to a former board member. These dollars may never be recovered, resulting in fewer funds for scholarships and other worthy goals.

In another recent incident, a Superior Court judge ruled in July that a CSU trustee had a conflict of interest when, as the chief executive officer of a movie-theater company, he cut a deal for his company to build a movie theatre at Fresno State University.

The CSU argued in court that the conflict of interest law did not apply because the deal was made with the CSU Fresno Association, which they argued was a private entity. Just days prior to the ruling, a CSU lobbyist – in testifying against SB 218 – gave a contradictory response, stating that CSU foundations and auxiliary organizations adhere to state conflict of interest laws.

“With 87 foundations and auxiliaries operating on 23 CSU campuses, the SSU and FSU scandals may be just the tip of the iceberg,” said Yee. “It is imperative that we pass SB 218 to ensure that these organizations comply with the state’s public records act and are held accountable.”

“It creates a noxious brew when we combine large sums of money with little or no public openness. And, it’s an obvious invitation to corruption,” said Lillian Taiz, president of the California Faculty Association (CFA), who is a history professor at Cal State Los Angeles.

According to the CSU Chancellor’s Office, 20 percent of its $6.7 billion budget, or $1.34 billion, is held in auxiliaries and foundations, which is out of public view.

“Taxpayers and students deserve to know how their public universities are run,” said Yee. “SB 218 will ensure that our public higher education systems operate in the light of day and are held accountable.”

In 2001, the Fresno Bee newspaper was denied information, specifically concerning the identity of individuals and companies that purchased luxury suites at the Save Mart Center arena at Fresno State. The denial resulted in CSU v. Superior Court (McClatchy Company), in which the Court opined that although it recognized university auxiliaries ought to be covered by the CPRA and that its ruling was counter to the obvious legislative intent of the CPRA, the rewriting of the statute was a legislative responsibility.

“Placing college and university auxiliaries under the authority of the state's public records act will safeguard the use of public funds and provide much needed accountability and oversight to state policymakers,” stated John Travis, Humboldt State University professor and legislative committee chair for the CFA.

“SB 218 reinforces the need for greater transparency and open government,” said Jim Ewert, Legal Counsel for the California Newspaper Publishers Association. “This bill ensures that students, the legislature and the public will have access to detailed information about how over $1 billion annually is moved through these government agencies.”

SB 218 will be considered next by the full Assembly.


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