Gov. Arnold Schwarzenegger on Friday vetoed a bill which would have required university foundations – nonprofit auxiliaries intertwined with public universities that oversee private gifts to colleges – to comply with the Public Records Act.
“While I am a firm believer in providing openness and transparency when it involves public entities and public funding, this bill inappropriately places private auxiliary organizations that receive private funds, under the provisions of the California Public Records Act,” wrote Schwarzenegger in his veto message to the legislature. “The focus of our attention should be given to greater transparency of how the University of California and California State University systems spend the public funds from taxpayers or students.”
Schwarzenegger went on to state that the bill would not provide “sufficient protection” for private donors who give to foundations. The bill would make it more difficult to raise private funds to maintain a quality educational experience, he wrote.
The vetoed Senate Bill 330 would have required disclosure of private donors only when those donors receive something greater than $500 in value in return for their donation. A similar law resulted in increased donations to the University of Iowa.
“Those taking his veto message seriously would be left wondering if the Governor even bothered to read the bill, or instead took the word of an aide with poor reading skills,” said Terry Francke, general counsel for Californians Aware. “SB 330 allowed anyone making a true gift of money or time to do so anonymously. Only those wanting a costly quid pro quo – purchasers, in effect – would have been named.”
Foundations’ exemption from the Public Records Act became a talking point in Turlock this year, when the California State University, Stanislaus Foundation declined to release former Alaska Governor Sarah Palin’s speaking contract for her appearance at a June 25 50th Anniversary Gala Fundraiser. Public Records Act requests in search of that contract – and Palin’s speaking fee – were filed by CalAware in the run-up to the gala, 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. Palin’s full contract with the CSU Stanislaus Foundation was not revealed, but pages four through nine of an early draft of that contract were found in a university Dumpster by two CSU Stanislaus students.
“It is infuriating that the Governor has opted to side with secrecy and financial corruption rather than transparency and accountability,” said Alicia Lewis, one of the two CSU Stanislaus students who found the abbreviated version of the Palin contract. “He has let down the students of this state and all those who have fought so hard to shed light on university finances.”
According to the CSU Chancellor’s Office, 20 percent of the system’s $6.7 billion budget – $1.34 billion – is held in 87 auxiliaries and foundations which are not subject to the Public Records Act.
Past improprieties by foundations across the state, including a $1.25 million loan issued to a former Sonoma State Foundation board member which spawned an ongoing Attorney General and FBI investigation and Sacramento State President Alexander Gonzalez spending $200,000 from campus auxiliary funds to remodel his kitchen in 2007, point to the need for oversight of foundation spending, according to State Senator Leland Yee (D – San Francisco), the author of SB 330.
“It is appalling, especially after the recent outrage regarding the City of Bell, that the Governor would ensure that scandals continue to plague our public universities,” Yee said. “His veto allows these public institutions to continue to hide billions of dollars without any accountability. He ignored the facts – these auxiliaries are fully staffed by public employees; they often administer public funds; the donors were provided anonymity; and that secrecy breeds corruption, not more donations.”
Yee and California Faculty Association President Lillian Taiz, a professor of History at Cal State Los Angeles, claim that Schwarzenegger’s veto was the direct result of “back channel” lobbying by CSU Chancellor Charles Reed and executives in the UC system, who claimed the bill would result in a “chilling effect” on private donations.
“The Governor, like his ivory tower counterparts within the UC and CSU administrations, failed California taxpayers and students by vetoing this sunshine legislation,” Yee said. “He has secured his legacy as Governor – a failure when it came to open government.”
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