Governor Brown Signs AFSCME 3299 Transparency Bill SB 8

Another 3299 victory! Fight ON!

Transparency Coming to UC and CSU.
New law expands access to records – like Palin’s contract – at public universities.

SACRAMENTO – A three year legislative battle has paid off for Senator Leland Yee (D-San Francisco) today as Governor Jerry Brown (D-Oakland) signed Yee’s bill to bring greater transparency and accountability to California’s public higher education institutions – University of California, California State University, and the state’s community college system.
 
Senate Bill 8 will ensure UC, CSU and the community college auxiliaries and foundations adhere to state public records laws. Under SB 8, all financial records, contracts, and correspondence would be subject to public disclosure upon request.
 
The bill also protects the anonymity of donors except in situations where there is a quid pro quo in which the donor receives something from the university valued at over $2500 or in which the donor receives a sole sour ce (no-bid) contract within five years of the donation. Anonymity would not be provided to any donor who attempts to influence curriculum or university operations.
 
“Finally, we will have real transparency at our public universities,” said Yee. “While this law does not technically go into effect until January 1, I am urging the UC and CSU to immediately begin complying and providing sunshine to the actions of their foundations and auxiliary organizations.”
 
The most recent scandal of an auxiliary organization made national headlines last year when the CSU Stanislaus Foundation negotiated a speaking contract with Sarah Palin. Students found parts of her contract as well as shredded documents in a campus Dumpster after CSU refused to disclose her compensation. After a lawsuit filed by CalAware, a judge ruled that the CSU acted illegally and forced them to disclose the full contract.
 
Despite overwhelming bipartisan support, Yee’s two previous legislative efforts were vetoed by former Governor Arnold Schwarzenegger (R-Los Angeles).
 
This has been a long fight, but I am proud of our coalition of open government advocates, students, faculty and workers who have stayed so persistent in helping protect the public trust,” said Yee.
 
“We are delighted that the governor agreed that the activities and operations of these quasi-public entities should be brought out of the shadows,” said Jim Ewert, General Counsel for the California Newspaper Publishers Association. “CNPA also thanks Senator Yee for his dedication to the issue and persistence over the last three years to ensure that these entities operate transparently.”

”Senator Yee deserves special thanks for his tenacious efforts on behalf of the faculty, staff, and students of the CSU,” said Lillian Taiz, a CSU professor and President of the California Faculty Association. “Three years of hard work and dedication have finally culminated in a very real victory for transparency and accountability.”
 
For years, foundations and auxiliaries of our state’s public colleges and universities have been able to hide billions of dollars from public scrutiny. According to the CSU Chancellor’s Office, in 2009, 20 percent of its $6.7 billion budget, or $1.34 billion, was held in their 87 auxiliaries and foundations.
 
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 led to the parties being held to account.
 
Sacramento State President Alexander Gonzalez spent over $27,000 from the campus auxiliary money to remodel his kitchen in 2007 and received over $80,000 for housing expenses on top of a foundation loan of over $230,000.  An Attorney General audit said the situation created “the a ppearance of impropriety.” 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.  
 
In October 2009, Cal Poly San Luis Obispo 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 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 then requeste d a meeting with Cal Poly administrators to determine whether or not to continue with their donation.
 
In April, longtime open government advocate Richard McKee passed away. In his honor, Yee named SB 8, “The Richard McKee Transparency Act of 2011.”
 
“Rich McKee was one of our state’s strongest champions for open government,” said Yee. “His passion helped ensure greater public access and accountability of government agencies throughout California. Whether you knew Rich or not, you benefitted from his activism. Our democracy is significantly better because of the work of Rich McKee and that is why he will be so greatly missed by all those who care about government transparency. This bill is a fitting tribute to his legacy.”