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Compromise shines on foundation transparency

POSTED May 27, 2011 7:59 p.m.

The California State University, University of California, and state community college systems have reached a compromise on transparency at university foundations with legislators who have fought for more openness.
The move potentially puts to an end a three-year battle over whether or not university foundations - non-profit organizations created to accept donations, and closely intertwined with universities - should be subject to public record laws.
"After several years of fighting to open up the books of our public universities, I am pleased that we are able to come to this agreement," said State Senator Leland Yee (D-San Francisco), who has led the push for foundation transparency. "Finally, we will have true sunshine and accountability of the administration of billions of dollars within UC and CSU. I commend the universities for seeing the light and allowing us to strike this deal."
The fine line between foundations and universities came to the forefront at CSU Stanislaus in 2010, when the CSU Stanislaus Foundation invited former Alaska Gov. Sarah Palin (R) to speak at the university's 50th Anniversary Gala fundraiser.
Californians Aware, an organization dedicated to open government and the free exchange of information, filed a public records act request with the university and the foundation for a copy of Palin's contract. The foundation said it was not subject to the act, and the university claimed it had no copy of the contract - despite significant overlap between the two.
President Hamid Shirvani, Vice President for University Advancement Susana Gajic-Bruyea, and Vice President of Business and Finance Russ Giambelluca all held non-voting roles within the foundation - chairman, executive director and treasurer, respectively.
Eventually, some pages of a draft version of Palin's contract came to light after two CSU Stanislaus students found the document in a Dumpster. Well after the gala, the foundation reveled Palin was paid $75,000 for her appearance, and that the event netted over $207,000 in revenue.
The amended version of Yee's bill would clarify that all UC, CSU and community college auxiliaries and foundations are subject to public record laws. Financial records, contracts and correspondence would be available to the public.
In a point of compromise, the bill would protect the anonymity of foundation donors and volunteers in most cases. Only donors or volunteers who receive something from the university valued at over $2,500, a sole source (no-bid) contract within five years of the donation, or who attempt to influence curriculum or university operations would have their identities revealed.
UC, CSU and community college officials lobbied against two previous versions of the bill, which would have granted anonymity to fewer donors and volunteers. Their opposition led to vetoes by former Gov. Arnold Schwarzenegger.
"The University of California is pleased to remove its opposition to SB 8 in response 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," said Steve Juarez, associate vice president of UC State Governmental Relations. "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."
Per the CSU Chancellor's Office, in 2009 more than 20 percent of the CSU's $6.7 billion budget was held in the system's 87 auxiliaries and foundations. Those budgets were - and are, until Yee's bill passes - not open to the public.
The transparency bill currently awaits approval by the Senate Committee on Appropriations. It would then need to be approved by the full legislature, and eventually Gov. Jerry Brown.
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141ext. 2005.

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