Friday, December 3, 2010

Yee to Reintroduce Public University Transparency Bill

Bill to expand public records law to be introduced Monday

SACRAMENTO – Senator Leland Yee (D-San Francisco) is hoping the third time’s a charm – or more importantly having a new governor – as he reintroduces legislation to bring greater transparency and accountability at California’s public higher education institutions.

As the Legislature convenes the 2011 Session on Monday, Yee will introduce a bill that has twice been vetoed by Governor Arnold Schwarzenegger (R-Los Angeles). Yee’s bill would update the California Public Records Act (CPRA) to include auxiliary organizations and foundations that perform government functions at the University of California, California State University, and California’s community colleges.

“I am confident that unlike his predecessor, Governor-elect Jerry Brown will match his action with his rhetoric and sign this bill into law,” said Yee. “Our public universities should not be allowed to hide billions of dollars without any accountability. Most of these auxiliaries are fully staffed by public employees who administer public funds, yet their decisions are made in complete secrecy. Taxpayers and students deserve better.”

The most recent scandal of an auxiliary organization involved the CSU Stanislaus Foundation. The Foundation negotiated a speaking contract with Palin, but originally refused to disclose her compensation. They first claimed they had no documents pertaining to her June visit. After emails written by administrators regarding the visit were uncovered, they then claimed the Foundation was exempt from the state’s public records law despite being fully staffed by taxpayer-funded employees.

Students later found pages 4 through 9 of the Palin contract in the administration’s Dumpster, which showed her visit requirements included a hotel suite, first class airfare or a private Lear jet, pre-screened questions, and “bendable straws.” After a lawsuit filed by CalAware, a judge ruled that the CSU acted illegally and forced them to disclose the complete contract which showed she also received $75,000 plus expenses.

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 Yee’s legislation:

• At Sonoma State, a $1.25 million loan issued to a former foundation board member two days after he resigned. A bankruptcy court forced the Sonoma State Foundation to return a portion of that loan which the former board member attempted to pay outside of the bankruptcy court proceedings. The Attorney General’s office and the FBI are investigating a number of auxiliaries at Sonoma State.

• 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 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.

• 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 spent $200,000 from the campus auxiliary money to remodel his kitchen in 2007 which created “the appearance of impropriety,” according to an Attorney General audit. 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, which is completely contrary to UC and CSU claims that no taxpayer dollars are used for campus auxiliary operations.

• Campus leadership at Cal Poly San Luis Obispo appears to be under the influence of a well-heeled donor. In October 2009, 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, in 2009, 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.

While the community college administration was neutral on Yee’s bill, the administrations of the UC and CSU succeeded in getting a veto by falsely claiming it would result in a “chilling effect” on private donations. The bill, however, allows donors to stay anonymous under all circumstances unless they receive something of value over $500 in return. Also, another state saw significant increases in donations after a similar law was enacted.

California’s major newspapers endorsed Yee’s previous bill, SB 330, including the San Francisco Chronicle, Los Angeles Times, Sacramento Bee, San Jose Mercury News, Santa Rosa Press Democrat, Merced Sun-Star, Fresno Bee, Stockton Record, Bakersfield Californian, Monterey County Herald, Modesto Bee, Long Beach Press-Telegram, Chico Enterprise Record, San Mateo County Times, Salinas Californian, South Bay Daily Breeze, and Woodland Daily Democrat, among others.

What others are saying about the bill’s reintroduction

“This bill would ensure that auxiliaries are accountable to the public and end the environment of secrecy in which corruption, mismanagement and self-dealing has thrived.” –Jim Ewert, Legal Counsel for the California Newspaper Publishers Association

“CSU campus foundations are nonprofit organizations for no other reason than providing tax write-offs for those who donate to their universities. Otherwise, their functions are as governmental as are the universities, and often rely on university housing, staffing, equipment and other resources. Once donors are guaranteed anonymity, there's no reason in the world why the foundations should not be as operationally transparent as the universities themselves.” –Terry Francke, General Counsel for Californians Aware

”For too many years, foundations and auxiliaries of our state’s public colleges and universities have been able to hide billions of dollars from public scrutiny. As a result, California taxpayers have only glimpsed the inner workings of these agencies when scandals revealed appalling examples of mismanagement. It is time, at long last, for these hidden monies to become more transparent and accountable to the people of California.” –Lillian Taiz, a CSU professor and President of the California Faculty Association

“Senator Yee’s legislation would create transparency regarding how auxiliary organizations that are closely affiliated with and provide funding to postsecondary educational institutions spend their dollars. These organizations provide as much as 20 percent of the funding for these postsecondary institutions that also receive general fund dollars. If any of this funding is going toward administrative excess, while student fees are rising, the public has a right to be informed about it. Subjecting postsecondary nonprofits to greater scrutiny under the Public Records Act will hold these organizations and the institutions they fund accountable to taxpayers.” –Michele Pielsticker, Vice President and General Counsel for the California Taxpayers Association

“Open government and transparency is the bedrock of our democracy. Senator Yee’s bill ensures that public agencies like the University of California be compelled to conduct business in the open and within the rule of law. For too long, UC executives’ decisions have been shrouded in secrecy. This bill will finally help end the practice of backdoor deals and give Californians confidence in our public institutions.” –Lakesha Harrison, a UCLA nurse and President of the American Federation of State, County, and Municipal Employees, Local 3299, representing UC patient care and service workers

“This bill will strengthen the California Public Records Act and force public institutions to comply with how the original law was intended to work. The nurses that work for UC understand how important it is for the public to have transparency when dealing with their hospital; it improves patient care and ensures that the UC continue to fill its roll as part of the safety-net system.” –Stephanie Roberson, Legislative Advocate for the California Nurses Association

“Senator Yee’s bill reflects the intent of Proposition 59 – approved by 83% of voters in 2004 – granting the constitutional right of the public to access public records, with the assumption favoring ‘open disclosure.’ Campus auxiliaries are used to hide public contract information about the expenditure of public funds. This legislation will provide the public and state policy makers greater transparency in determining how publicly-funded college campus auxiliaries are operated, and how student revenues are used to enhance the educational mission of our state and community colleges.” –Terry Brennand, Senior Government Relations Advocate for Service Employees International Union

“Auxiliary organizations have more and more taken on the role of providing services and performing the mission of these higher education institutions. Yet, they operate in the shadows because they do not have to comply with the transparency rules like those that work right alongside them. That simply creates too much opportunity for shenanigans.” –Shane Gusman, California Teamsters Public Affairs Council, representing UC clerical workers

“This bill will result in greater transparency as to how private donations and student campus fees are used. We are extremely pleased and gratified to endorse it.” –John S. James, Vice-President of the Academic Professionals of California, representing academic support staff at CSU


1 comment:

  1. When UC Berkeley announced its elimination of baseball, men’s and women’s gymnastics, and women’s lacrosse teams and its defunding of the national-champion men’s rugby team, the chancellor sighed, “Sorry, but this was necessary!”
    But was it? Yes, the university is in dire financial straits. Yet $3 million was somehow found to pay the Bain consulting firm to uncover waste and inefficiencies in UC Berkeley, despite the fact that a prominent East Coast university was doing the same thing without consultants.
    Essentially, the process requires collecting and analyzing information from faculty and staff. Apparently, senior administrators at UC Berkeley believe that the faculty and staff of their world-class university lack the cognitive ability, integrity, and motivation to identify millions in savings. If consultants are necessary, the reason is clear: the chancellor, provost, and president have lost credibility with the people who provided the information to the consultants. Chancellor Robert J Birgeneau has reigned for eight years, during which time the inefficiencies proliferated. Even as Bain’s recommendations are implemented (“They told me to do it”, Birgeneau), credibility and trust problems remain.
    Bain is interviewing faculty, staff, senior management and the academic senate leaders for $150 million in inefficiencies, most of which could have been found internally. One easy-to-identify problem, for example, was wasteful procurement practices such as failing to secure bulk discounts on printers. But Birgeneau apparently has no concept of savings: even in procuring a consulting firm, he failed to receive proposals from other firms.

    Students, staff, faculty, and California legislators are the victims of his incompetence. Now that sports teams are feeling the pinch, perhaps the California Alumni Association, benefactors and donators, and the UC Board of Regents will demand to know why Birgeneau is raking in $500,000 a year despite the abdication of his responsibilities.

    The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way the senior management operates.