ADAM J. KEIGWIN | CHIEF OF STAFF
OFFICE OF SENATOR LELAND YEE, PH. D.
Legislation would expand public record laws at public universities.
SACRAMENTO – On a 38-1 bipartisan vote, the California Senate today approved legislation authored by Senator Leland Yee (D-San Francisco) to bring greater transparency and accountability to California’s public higher education institutions – University of Calif ornia, California State University, and the state’s community college system.
SB 8 will ensure UC, CSU and the community college auxiliaries and foundations adhere to state public records laws. Under SB 8, all other financial records, contracts, and correspondence would be subject to public disclosure upon request.
Previous legislative efforts have been opposed by the administrations of UC and CSU and vetoed by former Governor Arnold Schwarzenegger (R-Los Angeles), but recently, Yee was able to strike a compromise with the univ ersities to remove their opposition by protecting donor anonymity in most cases.
Specifically, the bill will protect the anonymity of donors and volunteers in all cases except in situations where there is a quid pro quo in which the donor or volunteer receives something from the university valued at over $2500 or in which the donor or volunteer receives a sole source (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.
“ I am very pleased with today’s bipartisan vote to bring true transparency to our public institutions of higher learning,” said Yee. “Finally, we will have sunshine and accountability of the administration of billions of dollars within UC and CSU.”
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 prov ided by Yee’s legislation.
• The most recent scandal of an auxiliary organization involved the CSU Stanislaus Foundation. The Foundation negotiated a speaking contract with Sarah Palin, but originally 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 contract.
• 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 universit y 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 appearance 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 requested a meeting with Cal Poly administrators to determine whether or not to continue with their donation.
What others have said about SB 8:
“We are delighted that, after a three year struggle to require the CSU auxiliaries and UC foundations to operate openly and transparently, an agreement has been reached among the stakeholders, which pulls the curtain back on these quasi-government agencies to inform the public about their operations while protecting the privacy of donors who choose to remain anonymous.” –Jim Ewert, Legal Counsel for the California Newspaper Publishers Association
“The University of California is pleased to remove its opposition to SB 8 in respons e to amendments that will protect donor privacy and recognize that University campus foundations are non-profit organizations that exist solely to assist UC with its educational, research and public service mission. Senator Yee, his staff, and the sponsors of SB 8, in particular the California Newspapers Publishers Association, are to be applauded for negotiating a compromise that provides for greater transparency and accountability without sacrificing privacy protections that University donors and volunteers have a right to expect. ” –Steve Juarez, Associate Vice President of UC State Governmental Relations
“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 nonprof its 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