Governor Vetoes Reform of UC and CSU

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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.”

Senator Yee continued:

“With 87 foundations and auxiliaries operating on 23 CSU campuses, the SSU and FSU scandals may be just the tip of the iceberg.  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 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.”

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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14 Comments

  1. Disgusted

    Can’t say as I have been too impressed with the Governator. He should go back to Hollywood where he belongs, altho Gray Davis was a disaster. I’m not quite sure why Arnold could not see the wisdom of some of the bills he vetoed for greater transparency and whistleblower protection. Is there any way to get those things done despite the wimpy Governator, who obviously is kowtowing to the university lobbyists?

    Also, if universities aren’t careful, they may find alumni won’t donate anymore, that sort of thing, if the scandals are too great. The legislators have answered the corruption by reducing state funding. When public universities waste money on things it shouldn’t, the result is a legislature that uses the scandals as an excuse not to fund the universities with money from state coffers. The universities are going to end up privatized bc of their own venality, and it is low and middle income students who will suffer. The universities will become enclaves for wealthy kids and the few who can manage to get federal/state grant money.

    The whole thing is disgusting.

  2. Greg Kuperberg

    I don’t know whether I would have vetoed all three of these bills. Certainly it’s a terrible idea to ban promotions for executives just because the General Fund appropriation went down. For instance, UC Davis has promoted John Meyer because, from what I have heard, he has done a great job with streamlining administration and other expenses at UC Davis. I don’t for a minute feel sorry for John Meyer or feel that he needs to be thanked with a lot of cash. But for the sake of rational survival of UC Davis, it’s very important for us to try to keep someone as responsive to budget problems as he seems to be.

    The other two bills, concerning transparency and whistleblowers, are good ideas for all I know. However, it doesn’t seem so terrible that Schwarzenegger vetoed them. Fundamentally, UC is much better managed than the state government. I don’t think that its management is all that great, but it’s truly fabulous compared to what Sacramento is doing. Moreover, Sacramento is rapidly ditching its old goal of funding UC at all. With these bills, Leland Yee and others are trying to dig hooks into a university with less and less funding for that university. After breaking so many things, Sacramento should not try to fix what isn’t broken. Nor what increasingly isn’t its money either.

    The whistleblower law is a case in point. It is easy to summarize this law as protecting the innocent average Joe worker from the big bad corporatized university. The reality is not that simple. There are plenty of people who use whistleblower laws not to protect themselves from retaliation, but as an instrument of retaliation. The strategy is, “I know that everyone else in my office thinks that my job performance is bad. I’ve been denied promotions. So what if I look for some way to blow the whistle and then call my denial of a promotion retaliation?”

    For instance, in this posting David takes it as factual that Janet Keyzer was retaliated against and dismissed by UC. Well, how do you know that her side of the story is the truth? Maybe she has the right to invoke this or that whistleblower law, but that doesn’t mean that she is right.

  3. ABChe

    [quote]There are plenty of people who use whistleblower laws not to protect themselves from retaliation, but as an instrument of retaliation. The strategy is, “I know that everyone else in my office thinks that my job performance is bad. I’ve been denied promotions. So what if I look for some way to blow the whistle and then call my denial of a promotion retaliation?”[/quote]

    I think you are oversimplifying the matter, and it clearly shows. You are digging into the motivations of people-as to why they whistleblow. I think you lack an understanding of why people whistleblow in the first place.

    First of all, to assume that whisteblowers do it out of the kindness of their hearts is somewhat naive. (something you are assuming) I’m sure some whiteleblowers bring malpractice to light because they feel morally obligated to, but assuming that for most would be falling into the fallacy of generalization. People will whistleblow because some conflict at work has made it more beneficial for them to expose ‘corruption’ (I use it lightly) than to inevitably lose their job.

    To say that certain reasons are not acceptable or proper for whistleblowing is uncorrect. Regardless of what the reasons are, whistleblowing is a necessary tool to check entities from overreaching or illegally going about business.

    So, people should not whistleblow out of spite? Even if it can unravel corruption? On this one, you are wrong.

  4. Greg Kuperberg

    [i]People will whistleblow because some conflict at work has made it more beneficial for them to expose ‘corruption’ (I use it lightly) than to inevitably lose their job.[/i]

    That rather makes my point. As you say, there are people who exploit whistleblower protection laws for personal gain. I wasn’t generalizing. I understand that sometimes these laws protect people who truly are blowing the whistle and who truly need protection. But sometimes not.

    To the extent that anyone sees whistleblower protection as just another way to get ahead, a law for it is a terrible idea. A whistleblower law only makes sense as a way to pursue justice; it’s not a career vehicle. Exploiting such a law for personal gain isn’t unraveling corruption, it is corruption.

  5. really?

    I know that whistleblower laws have been used as a way to attack co-workers or workers that idealogues have targeted. Greg is totally correct on this. I’ve known victims of it.
    So far as Yee’s legislation, he has been after UC for ages now. He’s trying to do real harm to the institution. Unitl the State starts funding the UC like they should, they should stay out of the way of something that is run infinitely better than their own house.

  6. Greg Kuperberg

    [i]He’s trying to do real harm to the institution.[/i]

    He certainly is. He knows full well that there have been 8 years of budget cuts to UC and they have been massive. Instead of apologizing to anybody, or instead of fighting for UC at all, he has undermined UC by condemning its management. The comparisons to AIG are essentially a lie. The state budget looks more like AIG than UC’s budget does. The state’s credit rating is shot; UC still has standing to borrow money. That’s why UC has underwritten loans for its own bond-funded construction projects.

    Even before the economic and political collapse this year, Yee was on the warpath to make UC spend more money than less. The whole goal all along is to protect union contracts, and no one on that side really cares if the money comes from students. For instance, when AFCSME won concessions from Vanderhoef at Davis two years ago, their raises came directly from student meal plans. It was still cast a victory over the big bad administration.

  7. I hear

    I heard that Yee’s gripe is UC’s discrimination against Asian students.

    It’s widely believed (and largely true) that Asian students require better overall records for admission, in all areas, than do other students.

    This is a choice UC made to ingratiate itself with certain legislators. But it had the result of making an enemy of Yee.

  8. Recent UC Grad

    [quote]Unitl the State starts funding the UC like they should, they should stay out of the way of something that is run infinitely better than their own house.
    [/quote]
    When and Where did you graduate from?

    I just graduated from a UC, not davis, one of the flagship campuses. And I can assure you, simply adding a class can becomes a very frustrating and bureaucratic mission. Think DMV x50. So…take it from me. The state is run better than the UC system.

    It’s governed worse, but run better.

  9. Greg Kuperberg

    [i]I heard that Yee’s gripe is UC’s discrimination against Asian students.[/i]

    That’s certainly a gripe. It wouldn’t be fair to call it the gripe. Yee was pulling tricks before he was rankled earlier this year by admissions policy issues. A lot of it has to do with union support.

    The basic problem is that Yee’s only method to negotiate with other leaders is to try to overthrow them. He took the same approach when he was on the horse racing commission. He didn’t want them to close Bay Meadows, so he blasted the commission for corruption.

  10. Greg Kuperberg

    [i]And I can assure you, simply adding a class can becomes a very frustrating and bureaucratic mission.[/i]

    Also: It isn’t reasonable to compare UC registration to the DMV. What you do at the DMV is relatively simple, and it makes money for California. So of course the state has every reason not to make that a hassle. By contrast, undergraduate enrollment at UC still gets a state subsidy (even though it is dropping fast) and it is a much more complicated service than just getting license plates.

    A fairer comparison is to the state prison system, which is so badly managed that it is in federal receivership. Of course, its mismanagement is largely forced by bad governance, but that’s ultimately the point.

    Another comparison is to CSU. I agree with you that the system is often
    inconsiderate to UC undergraduates — none of us are saying that UC is well-run, only that it’s better-run. But do you think that it’s anything but worse at CSU? Look at what happened with furlough days at UC vs CSU. UC made sure that there would be no furloughs on teaching days, and it was said here that anything else would be a slap in the face to students. Meanwhile at CSU, it’s up to 9 furloughed teaching days each semester.

  11. Huh?

    “The other two bills, concerning transparency and whistleblowers, are good ideas for all I know. However, it doesn’t seem so terrible that Schwarzenegger vetoed them. Fundamentally, UC is much better managed than the state government.”

    The scandals at various university campuses give Yee the excuse Yee needs to point fingers. Greater transparency would hopefully cut down on the scandals, and give Yee less to be critical of. Then there would be less reason/excuse to cut funding to the public universities. Without transparency, corruption flourishes, and allows states to underfund its public universities, which results in greater privatization of them. Soon low and middle income students will be cut out of the public university system altogether, so it is nothing but an enclave for the wealthy.

  12. Greg Kuperberg

    [i]The scandals at various university campuses give Yee the excuse Yee needs to point fingers.[/i]

    He doesn’t need any excuse whatsoever to point fingers. He sees blame as the mission of his job. There is always something going on at any university campus that can be taken as a scandal. For instance, Yee leaped to implicate Chancellor Katehi in a scandal in Illinois that he didn’t know anything about.

    It reminds me of David’s rather premature claim that Katehi has made the mistake of Nixon. Well, Leland Yee has made the non-mistake of Nixon, that scandals are a way to get ahead in politics. Unfortunately, they aren’t wrong about that.

    [i]Greater transparency would hopefully cut down on the scandals[/i]

    Actually, transparency does not cut down on scandals, it brings them on. Transparency is a good idea to the extent that you want scandals to cure the system of its sins. Saying that transparency cuts down on scandals is like saying that police cut down on traffic tickets.

    And while more transparency could always be useful in principle, the fact is that UC already has more of it than many other institutions. For instance, there is vastly more information on the web about UC’s operations than about the state’s prisons. But in many cases, transparency is like drinking saltwater; it just makes people thirsty for more.

    What happens is that transparency creates a picture that’s simply too complicated for one person to understand. In the case of UC, it’s more than 150,000 workers doing an incredible variety of different things. In response to so much information, it’s easy to feel that the institution is hiding some simple truth. It’s not, but the phenomenon is a lot like teaching a university course. If you follow an unthreatening syllabus, then many students will say that they learned a lot. On the other hand, if you follow a very ambitious syllabus, then many students will feel overwhelmed and insist that they didn’t learn anything.

  13. Huh?

    “Actually, transparency does not cut down on scandals, it brings them on. Transparency is a good idea to the extent that you want scandals to cure the system of its sins. Saying that transparency cuts down on scandals is like saying that police cut down on traffic tickets.”

    So what are you saying, that police shouldn’t patrol the streets? Your logic escapes me here. Greater transparency means less is able to be hidden, which means a greater chance at getting caught for misdeeds. Let’s take a concrete example. Beeham was not watched, and cooked the books on crime stats at UCD. Had there been some oversight – transparency – then the scandal may not have happened. The Board of Regents perform their voodoo economics behind closed doors, and are accountable to no one except themselves. And what has been the result? Yee jumping up and down, pointing to the huge raises in exec salaries as the university raises student fees, furloughs, etc. Yee may have had his bills defeated, but his observations no doubt played some part in giving legislators the excuse they need to cut funding to the university. Had the university been less arrogant, and more careful in what they did – so there was not a public perception of arrogance and waste – it would be more difficult for the state to cut university funding. What the Bd of Regents/Yudof did is make it a slam dunk for the legislators to short change the university system. I also suspect that the tendency toward a research function rather than teaching has also given the legislature the excuse to underfund the universities. So now, you get what you get… be careful what you wish for!

  14. Moravecglobal

    $3,000,000 Reckless Spending at UC: University of California President Yudof Approves $3,000,000 to Outsource UCB Chancellor’s Job
    The UC President has a UCB Chancellor that should do the high paid job he is paid for instead of hiring an East Coast consulting firm to fulfill his responsibilities. ‘World class’ smart executives like Chancellor Birgeneau need to do the analysis, hard work and make the difficult decisions of their executive job!
    Where do consulting firms like Bain ($3,000,000 consultants) get their recommendations?
    From interviewing the senior management that hired them and will be approving their monthly consultant fees and expense reports. Remember the nationally known auditing firm who said the right things and submitted recommendations that senior management wanted to hear and fooled government oversight agencies and the public?
    Mr. Birgeneau’s executive officer performance management responsibilities include “inspiring innovation and leading change.” This involves “defining outcomes, energizing others at all levels and ensuring continuing commitment.” Instead of demonstrating his capacity to fulfill his executive accountabilities, Mr. Birgeneau outsourced them. Doesn’t he engage University of California and University of California Berkeley (UCB) people at all levels to help examine the budget and recommend the necessary trims? Hasn’t he talked to Cornell and the University of North Carolina – which also hired Bain — about best practices and recommendations that might apply to UCB cuts?
    No wonder the faculty and staff are angry and suspicious. Three million dollars is a high price for Californians to pay when a knowledgeable ‘world-class’ Chancellor is not doing his job.
    Please help save $3,000,000 for teaching our students and request that the UC President require the UCB Chancellor to fulfill his executive job accountabilities!

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