Tuesday, April 13, 2010

UC's Legal Bills Aren't Huge Enough

UC does indeed have huge legal bills as noted by Changing Universities


SB 650

In July 2008, the California Supreme Court ruled (Miklosy v. the Regents of the University of California (S139133, July 31, 2008) that UC employees who are retaliated against because they report wrongdoing cannot sue for damages under the state’s Whistleblower Protection Act, so long as the University itself reviews the complaints in a timely fashion. The ruling uncovered an oversight made by the Legislature when the Act was amended in 2001, which provided legal standing for all other state employees to seek damages.

“This is the classic case of the fox guarding the hen house,” said Yee. “UC and CSU executives should not be judge and jury on whether or not they are liable for monetary claims. This was not the intent of California’s whistleblower law.”

In the Miklosy decision, three of the seven judges urged the Legislature to consider changes to the law, as the current statute undermines the purpose of the Act.

“The court’s reading of the Act, making the University the judge of its own civil liability and leaving its employees vulnerable to retaliation for reporting abuses, thwarts the demonstrated legislative intent to protect those employees and thereby encourage candid reporting,” wrote Justice Kathryn Mickle Werdegar, joined by Chief Justice Ronald George and Justice Carlos Moreno. “If the same government organization that has tried to silence the reporting employee also sits in final judgment of the employee’s retaliation claim, the law’s protection against retaliation is illusory.”

The Miklosy decision deals with the plight of two former scientists at UC’s Lawrence Livermore National Laboratory, who repeatedly told their supervisors about equipment problems and poorly trained operators of a project designed to determine the safety and reliability of the nation’s nuclear weapons stockpile. One of the scientists, Leo Miklosy, was fired in February 2003 and the other, Luciana Messina, resigned a few days later after overhearing a supervisor say she would also be fired.

“SB 650 will resolve the ambiguity in statute referenced by the Supreme Court and will ensure that all UC and CSU employees are given the same real – and not illusory – whistleblower protections as other state employees,” said Francke. “Fraud, waste and corruption in government cannot succeed if public employees are well-protected against punishment for blowing the whistle on wrongdoing.”

“SB 650 would protect UC and CSU employees, who continue to face reprisal for reporting bad behavior and, without protection, will likely no longer be willing to provide journalists, the Legislature and the public with essential information about the operations of these high profile institutions in an era where available financial resources are increasingly scarce,” said Ewert.

SB 330

The UC and CSU have often evaded the public records act by shifting some responsibilities to foundations and other auxiliary organizations operating on campuses. Several recent examples demonstrate the need for increased public oversight and accountability provided by SB 330:

• At Sonoma State, a $1.25 million loan issued to a former foundation board member two days after he resigned. He is now defaulting on that loan, which leaves less money in the foundation’s endowment for scholarships and other more important causes.

• At Fresno State, a no-bid managing contract was given to a foundation member for a theatre complex in which he held a financial interest. In addition, the Fresno Bee newspaper was denied information in 2001, specifically concerning the identity of individuals and companies that received luxury suites at the Save Mart Center arena. 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.

• At San Francisco City College, a campus executive has been indicted for using money from the San Francisco City College Foundation for personal and political purposes. At San Jose/Evergreen Community College, the Chancellor was found to have engaged in lavish travel and other examples of financial impropriety that prompted her resignation. Since local community college campus auxiliaries are already subject to the CPRA, these instances of waste and abuse have lead to the parties being held to account.

• Sacramento State President Alexander Gonzalez recently acknowledged his campus is being investigated by the Attorney General in relation to inappropriate expenditures of campus auxiliary money, including $200,000 to remodel President Gonzalez’ kitchen in 2007. Additionally at Sacramento State, $6.3 million of public funds was transferred to University Enterprises Inc., a campus auxiliary, to backfill losses from a property acquisition.

• Campus leadership at Cal Poly San Luis Obispo appears to be under the influence of a well-heeled donor. In October, Cal Poly eliminated a guest lecture at the request of executives from the Harris Ranch Beef Company, who threatened to withhold $500,000 in support for a new campus meat-processing center. Emails recently obtained by the San Luis Obispo Tribune also found that Harris Ranch may have also forced the resignation of a faculty member who taught a course on sustainable farming. Harris officials are now requesting a meeting with Cal Poly administrators to determine whether or not they will continue with their donation.

According to the CSU Chancellor’s Office, 20 percent of its $6.7 billion budget, or $1.34 billion, is held in their 87 auxiliaries and foundations, and out of public view.

“SB 330 would remove the cloak of secrecy that prevents the public from understanding whether significant amounts of educational funding for public colleges and universities is being spent for the benefit of all Californians or just a privileged few,” said Jim Ewert, Legal Counsel for the California Newspaper Publishers Association.

“In just the last month alone, the scandals involving these foundations have expanded significantly to reveal that money has been used inappropriately for personal expenses, questionable loans, no-bid contracts, and executive perks for college administrators,” said Taiz.

“If government agencies can spin off front groups to handle their income with no transparency, those who provide that funding will never know quite where their money goes,” said Terry Francke, General Counsel for Californians Aware.

Both bills will now be considered by the State Assembly.

source: http://dist08.casen.govoffice.com/

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