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University foundation transparency law one step closer to reality

POSTED August 18, 2010 5:05 p.m.

The State Assembly on Tuesday unanimously approved a bill requiring university foundations and auxiliaries to comply with the Public Records Act.

Under current law, such foundations – nonprofit auxiliaries intertwined with public universities that oversee private gifts to the colleges – are not subject to Public Records Act requests.

The disconnect between foundations and their respective colleges was seen recently in Turlock, when the California State University, Stanislaus Foundation declined to release a speaking fee paid to former Alaska Governor Sarah Palin for her appearance at a June 25 50th Anniversary Gala Fundraiser. Public Records Act requests in search of that fee were filed in the run-up to Palin’s speech, but the foundation maintained that, as a nonprofit, they were not subject to the act.

The foundation revealed July 16, of their own volition, that Palin was paid $75,000, plus $2,500 in travel and accommodation expenses.

If the bill, Senate Bill 330, goes into effect, it would prevent foundations from sheltering such information in the future.

“SB 330 would remove the cloak of secrecy that prevents the public from understanding whether significant amounts of educational funding for taxpayer-funded 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.

The current system of auxiliaries and foundations makes it difficult to ascertain the exact state of the University of California and California State University budget. About 20 percent of the total CSU budget, or $1.34 billion of the total $6.7 billion budget, is held in 87 auxiliaries and foundations.

“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, who filed the Public Records Act requests in search of Palin’s speaking fee.

The bill still requires a procedural concurrence vote in the Senate before heading to Gov. Arnold Schwarzenegger’s desk.

Schwarzenegger vetoed a similar bill last year – Senate Bill 218 – over concerns that donations may decrease as some volunteers and donors wish to remain anonymous. SB 330 looks to address that concern by exempting disclosure of such persons, so long as they do not receive something of a value greater than $500 in exchange for their donation or service.

SB 330 also exempts information obtained in the process of soliciting donations from Public Records Act requests.

“With today’s vote, we are one step closer to eliminating waste, fraud, and abuse at UC and CSU,” said State Senator Leland Yee (D-San Francisco), the bill’s author. “The Governor has a second chance to do the right thing and to provide taxpayers and students what they deserve – information on how their universities are being run and how money is being spent that is intended for the benefit of the public institution.”

To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.

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