Governor Vetoes Three Bills Attempting Reform of the UC8 min read

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In the slew of bills signed and vetoed on Sunday, the Governor ended up vetoing three bills sponsored by Senator Leland Yee that would have pushed for serious reforms of UC and CSU including key legislation that would have prohibited executive pay raises during bad budget years at the University of California and the California State University.

Senator Yee:

“It is deeply disappointing that the Governor wants to ensure top executives live high on the hog while students suffer. The Governor’s veto is a slap in the face to all UC and CSU students and the system’s low wage workers. His veto protects the UC and CSU administration’s egregious executive compensation practices and allows them to continue to act more like AIG than a public trust.”

In what has become a focal point of protest, in July, the UC Board of Regents approved huge salary increases for executives at the same they were voting on furloughs, fee hikes, and other cutbacks.

At the Regents meeting in July, several executives were appointed at salaries from 11 percent to 59 percent higher than their predecessors. The Regents also voted to give “administrative stipends” ranging from $24,000 to $58,625 to several employees, without any extra duties, and added several new highly paid executive positions.

All told, the Regents approved nearly $2 million in monetary compensation increases at just one meeting. That is in addition to other forms of compensation including generous pension plans, travel allowances, housing, and access to low-interest loans. UC President Mark Yudof also receives nearly a $1 million in salaries and perks.

Since 2002, top administrators at CSU have also received raises in excess of 23 percent.

Senator Yee in a statement released Sunday continued:

“The Governor is apparently tone deaf to what is happening at the UC and CSU. California deserves better. There is absolutely no justification for these bloated salaries. Unfortunately for students and California taxpayers, the Governor is not nearly as concerned about stopping the excessive student fee hikes as he is with protecting the exorbitant salaries of university executives. Unlike Governor Schwarzenegger, I believe it is the students, faculty and workers that make our universities special, not ‘high level personnel.”

In Governor Schwarzenegger’s veto message he stated:

“A blanket prohibition limiting the flexibility for the UC and CSU to compete, both nationally and internationally, in attracting and retaining high level personnel does a disservice to those students seeking the kind of quality education that our higher education segments offer.”

The Governor also vetoed two bills that would have brought greater transparency and accountability to the State’s public higher education institutions.

SB 218, which overwhelmingly passed the Legislature, would have updated the California Public Records Act (CPRA) to include auxiliary organizations that perform government functions at the University of California (UC), the California State University (CSU), and the California Community Colleges. SB 219 would have provided UC employees who report waste, fraud and abuse, with the same legal protections as other state employees.

Senator Yee in a separate statement released Sunday evening said:

“The Governor has failed to keep his promise of bringing greater sunshine to government agencies. While he talks a lot about government waste, he vetoes the only bills to actually provide public oversight and accountability. His vetoes are certain to allow further scandal at these public institutions and will only result in fewer philanthropic dollars at a time when they are needed more than ever.”

Lillian Taiz, President of the California Faculty Association said:

“We are outraged that the Governor vetoed SB 218. It would appear that his public commitment to transparency and accountability is only lip-service.”

The UC and CSU have often evaded the public records act by shifting some responsibilities to foundations and other auxiliary organizations operating on campuses. Several recent examples demonstrated the need for increased public oversight and accountability provided by SB 218:

• At Sonoma State, a $1.25 million loan issued to a former foundation board member two days after he resigned. He is now defaulting on that loan, which leaves less money in the foundation’s endowment for scholarships and other more important causes.

• At Fresno State, a no-bid managing contract was given to a foundation member for a theatre complex he held financial interest in. A recent Superior court ruling found that, despite CSU’s claims to the contrary, the foundation board member must comply with the state’s conflict of interest laws.

• 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.

• The latest example, as reported in the online community publication The Sacramento Press and verified by CSU Sacramento documents, indicates that University Enterprises, Inc., an auxiliary at Sacramento State, purchased a commercial building in 2007 just as the economy began to head towards a recession. The building has only one tenant, which prompted Sacramento State University and the CSU Chancellor’s office to give $6.3 million from their general fund to offset the lost revenues from a lack of tenants. These funding commitments were made at the same time the CSU has been forced to cap student enrollment, raise student fees, and impose harmful furloughs on faculty and staff. Additionally, while arguing in opposition to SB 218, the CSU has made repeated claims that campus auxiliary organizations are “self-supporting” and “do not rely on general fund dollars for support.”

“With 87 foundations and auxiliaries operating on 23 CSU campuses, the SSU and FSU scandals may be just the tip of the iceberg,” said Yee. “Taxpayers and students deserve to know how their public universities are run.”

According to the CSU Chancellor’s Office, 20 percent of its $6.7 billion budget, or $1.34 billion, is held in auxiliaries and foundations, which is out of public view.

In 2001, the Fresno Bee newspaper was denied information, specifically concerning the identity of individuals and companies that purchased 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 university 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.

There have been a number of recent cases of whistle-blower retaliation in the UC. The Davis Vanguard reported on September 24, a case involving a Doctoral Candidate Janet Keyzer who was retaliated against and dismissed for complaining about the improper use of the Institutional Review Board (IRB) and failure of a project she worked on to get proper approval.

Ms. Keyzer observed that the project she was working on was not in compliance with standard research requirements involving human subjects. Team members also violated laws regarding confidential medical records and protected health information. When she brought this to the attention to the IRB, she was not retained as researcher.

Meanwhile on October 8, 2009, the Sacramento Bee reported on a story that the UC Davis center for abused kids misused federal funds according to two internal audits.

“The university disclosed its findings in response to a whistle-blower lawsuit filed earlier this week by a medical researcher, who claims she was retaliated against after she reported the problems to UC Davis officials.

Kristen Rogers, an assistant professor in the pediatrics department, filed suit Monday in Alameda County against the University of California Regents and Marilyn Peterson, longtime director of the UC Davis CAARE Diagnostic and Treatment Center.”

Senator’s Yee legislation attempted to offer greater protection to whistle-blowers.

In July 2008, the California Supreme Court ruled (Miklosy v. the Regents of the University of California (S139133, July 31, 2008) that UC employees who are retaliated against because they report wrongdoing cannot sue for damages under the state’s Whistle-blower Protection Act, so long as the University itself reviews the complaints in a timely fashion. The ruling uncovered an oversight made by the Legislature when the Act was amended in 2001, which provided legal standing for all other state employees to seek damages.

In the Miklosy decision, three of the seven judges urged the Legislature to consider changes to the law, as the current statute undermines the purpose of the Act.

Justice Kathryn Mickle Werdegar, joined by Chief Justice Ronald George and Justice Carlos Moreno wrote:

“The court’s reading of the Act, making the University the judge of its own civil liability and leaving its employees vulnerable to retaliation for reporting abuses, thwarts the demonstrated legislative intent to protect those employees and thereby encourage candid reporting. If the same government organization that has tried to silence the reporting employee also sits in final judgment of the employee’s retaliation claim, the law’s protection against retaliation is illusory.”

Senator Yee:

“This is the classic case of the fox guarding the hen house. UC executives should not be judge and jury on whether or not they are liable for monetary claims. This was not the intent of California’s whistle-blower law. Unfortunately, the Governor has sent the wrong message to those who witness wrongdoing at UC. Without legal protections, workers are certain to unfairly face retaliation for doing the right thing and many others will just stay silent. The Governor has not only let down UC workers, but all California taxpayers.

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