OPEN GOVERNMENT -- The Assembly Higher Education Committee on Tuesday approved SB 330 – a reintroduction of last year’s SB 218 – to apply the California Public Records Act (CPRA) to nonprofit 'auxiliary' organizations that perform government functions at campuses of the University of California, California State University, and California’s community colleges, reports the office of Senator Leland Yee (D-San Francisco), author of both bills.
To address the Governor’s veto message from last year, the new bill has been amended to exempt from disclosure the names of volunteers and donors who wish to remain anonymous provided they do not receive something of value greater than $500 in exchange for their donation or service. The bill will also exempt information obtained in the process of soliciting donations.
“It is imperative that we pass this bill to help rid the UC and the CSU of waste, fraud, and abuse,” said Yee. “Through this legislation, we will give the Governor a second chance to do the right thing. Taxpayers and students deserve to know how their public universities are run.”
“The time has come to bring transparency and accountability to our public colleges and universities,” said Lillian Taiz, President of the California Faculty Association and a history professor at CSU Los Angeles. “Because of state funding cuts to public higher education, we must ensure that what money the system has is spent as it was intended – in the classroom educating students.”
Most recently, the CSU Stanislaus Foundation, which is fully staffed by taxpayer-funded employees, negotiated a speaking engagement contract with Sarah Palin but refused to disclose her compensation for this Friday’s gala. Then, email correspondence by administrators regarding the visit were uncovered and students also found pages 4 through 9 of the Palin contract in the administration’s dumpster, which showed her visit requirements include a hotel suite, first class airfare or a private Lear jet, pre-screened questions, and “bendable straws.”
The incident has spurred an investigation by the Attorney General, a lawsuit by Californians Aware, and several hate messages sent to the office of Senator Yee, who had made a public records request to the University for such information.
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. Recently 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 and the FBI are investigating a number of auxiliaries at Sonoma State.
- 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 led 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 Telegram 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 past few months, 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.
Before heading to the Governor, SB 330 must be approved by the full Assembly.