Sunday, May 19, 2013
FAIRFIELD-SUISUN, CALIFORNIA
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UC, CSU foundations remain obscure despite new law

SACRAMENTO — Under a law that took effect last year, the public has the right to access the records of private foundations that are affiliated with University of California and California State University campuses and examine how they spend the hundreds of millions of dollars they raise.

Or at least that was the idea behind legislation Gov. Jerry Brown signed in 2011 that made the foundations subject to the California Public Records Act.

Supporters described the law as a win for open government, but trying to get useful information out of the foundations since it passed raises questions about whether their records are any more accessible than in the past.

The Associated Press sought to determine the law’s effectiveness in providing the types of information routinely available through state and local agencies under California’s open records law. It tested how the law was being applied at several foundations and sought feedback from the legislation’s advocates and its author.

What emerged was a daunting and sometimes frustrating exercise to detail even the most basic aspects of foundation spending.

The law did not establish uniform reporting requirements for the dozens of university foundations at the state’s four-year higher education systems, creating a patchwork of efforts to comply with its disclosure requirements. Even determining how to contact the foundations and ask for the information can be a challenge.

The sheer scope of the foundation system is another obstacle.

The 23 CSU system campuses have 89 auxiliaries and foundations that control $1.6 billion, according to the CSU chancellor’s office. The 10 University of California campuses have one foundation each with a total of $5.9 billion in assets, according to the UC Office of Institutional Advancement.

Like similar organizations affiliated with colleges across the country, they raise private donations, often from alumni, and spend it to support various university functions. Some were formed to help students or campus projects, while others are used to operate food services or bookstores.

Some foundations also provide additional compensation for university presidents and top-level administrators, ranging from cash to kitchen remodels. While no taxpayer money is involved directly, the presidents and top officials at the universities are frequently listed as board members or president of the foundations.

The flow of private money through the state’s higher education system has come under greater scrutiny because of ongoing tuition increases and faculty cutbacks at the institutions, which educate a combined total of 646,000 students.

No entity within the CSU or UC systems collects the foundations’ financial information, but there are so many of them within the CSU that they formed their own group, the Auxiliary Organizations Association. The association did not return telephone messages seeking comment for this story.

The AP requested documents describing or authorizing any payments on behalf of campus presidents and the next two top officials from foundations at three California universities, San Diego State University, CSU Sacramento and the University of California, Davis. That included a request for information about payments made to or on behalf of their family members for “automobiles, housing, renovations, salary, bonuses, health care and education.”

The results showed wide variations in how much detail the organizations provided.

A request for a foundation’s budget, for example, produced four years’ worth of detailed spending documents from CSU Sacramento, which posts its audited financial reports online. In the case of the Campanile Foundation at San Diego State, the same request yielded just two years of its budget summaries, half-page documents with broad categories in which hundreds of thousands of dollars are listed for items such as “consulting fees.”

“It’s an opportunity, but it doesn’t actually make the information public. It doesn’t force them to be transparent,” Alice Sunshine, communications director of the California Faculty Association, said about the new state law.

People seeking information have to make highly specific formal records requests, but the public is at a disadvantage because so little is known about the foundations’ operations.

“It’s difficult to do that, because you have to really know what you want, which means you have to already suspect something in order to ask,” Sunshine said.

Sen. Leland Yee sought the law to try to close a loophole in state public records laws after the CSU Stanislaus Foundation refused to release its speaking contract with former vice presidential candidate Sarah Palin in 2010.

A government watchdog group sued the university seeking details and alleging that administrators violated the public records law. A judge eventually ordered the information released.

“Just getting them to understand the importance of open government and transparency is a huge accomplishment already, just to get them to understand that they need to disclose when the general public asks them,” said Yee, a San Francisco Democrat.

In the past, when the public asked for information, the groups would ignore them or tell them “you have no right to that information,” he said.

In response to one of the AP’s requests, the Campanile Foundation at San Diego State provided documents confirming the foundation’s previously disclosed $50,000 annual salary supplement for campus President Elliot Hirshman, plus its agreement to cover the payroll taxes associated with that supplement.

Yet the foundation’s budget described broad categories such as $371,944 in “management salaries and fringes” and $65,000 in “other operating expenses,” that do not explain how the money was spent.

By comparison, the University Enterprises Foundation at CSU Sacramento posts copies of all its tax returns and audited financial statements online. The documents list the salaries for all the top officers, as well as additional compensation they receive.

Sometimes, the foundations responded with just the kind of detail the law intended: The University Foundation at CSU Sacramento, for example, provided documents showing that Francisco Gonzalez, a renowned Chicano harpist and brother of university President Alexander Gonzalez, was paid $3,000 for a musical performance during a donor event in 2009, along with $382 in hotel expenses. The foundation also bought 1,000 of Francisco Gonzalez’s CDs for $1,500, which were given to donors at the event. The payments were previously disclosed.

The president did not invite his brother or plan the event, and Francisco Gonzalez was paid the same rate as other musicians who have performed at events, university spokeswoman Kim Nava said. CSU Sacramento considers its foundations as subject to the California Public Records Act and complied with requests even before the new law was enacted, she said.

The UC Davis Foundation responded that it had not authorized any payments to or on behalf of its president, provost and associate chancellor or their families. It provided links to its budget documents, which are posted online.

The legislation requiring disclosure was supported by the California Newspaper Publishers Association, labor unions and the California Faculty Association. But anecdotal evidence from those groups indicates that few people have tested the law, perhaps because of the complex network of auxiliary groups affiliated with each of the campuses, the lack of uniform reporting and the difficulty in knowing how to begin.

Yee said he wants to see how the law works over time before proposing fixes. If the foundations and auxiliaries become less responsive or block the release of public information, he said he will pursue follow-up legislation.

“I hope that the university community understands that you’ve just got to be open and transparent about any activity relating to the university, its operations, its students and its administrators,” he said.

The Associated Press

The Associated Press

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