Stanislaus Hammered over Handling of Palin Situation

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In April a story exploded that CSU-Stanislaus had failed to properly turn over public documents requesting how much money they had spent for the controversial former Governor of Alaska, Sarah Palin, to speak at their commencement address.  Accusations flew that they had improperly denied a public records request, claiming first that they did not have the documents, and then when documents surfaced, that they were a private entity and not subject to the records act.

To add fuel to the fire, students came forward after discovering a document-shredding party.  Two days after Senator Leeland Yee and Californians Aware were denied their request for public information, several students found documents in the dumpster, including pages 4-12 of Sarah Palin’s contract.  According to the students, these documents were intact and were mixed in with other documents that apparently had been shredded on a furlough Friday by University Officials.

Senator Yee referred the matter to the Attorney General, to investigate what he called a violation of public trust.  “The university’s claim of no documentation was inconceivable and now there is a smoking gun,” said Senator Yee in April.  “What other documents and correspondence are they hiding?  I am immediately requesting for the Attorney General to investigate this violation of the public trust.”

On Monday, August 23, Stanislaus County Superior Court Judge Roger M. Beauchesne rendered the declaratory judgment sought by the advocacy group, Californians Aware (CalAware).  In it he concluded three key things.

First that the university failed to produce any public records requested by the group until after the initiation of the lawsuit, while records “established that the University did possess public records responsive to the request as of… April 6.”

Second, “the University’s failures to follow the California Public Records Act, and to produce records when and as requested, whether deliberate, negligent or inadvertent, constitute violations of its obligations under the California Public Records Act, which contains no requirement that bad faith or a similar mens rea be proven in order to establish an actionable violation…”

Third, “the reasonable inference from the evidence produced is that the University, in its official capacity, has ‘used’ the contract between the Washington Speaker’s Bureau (with Ms. Palin and the CSU Foundation) in the conduct of the public’s business; therefore, said contract is also a public record and should have been produced to Petitioner.”

According to a release from CalAware, Judge Beauchesne was referring to evidence contained in an e-mail eventually made public by the University, showing that CSU Chancellor Charles Reed was aware of the fee contracted to be paid to Palin for her speaking appearance at the July 20 celebration of the campus’s 50th Anniversary Gala.

The judge also granted CalAware a writ of mandate, requiring the University to release the contract as well as any so far unreleased “documentation related to the use of University property, personnel, facilities or services provided in connection with the Gala for which the University sought or will seek reimbursement from the Foundation.” 

Judge Beauchesne did find that the Foundation itself was not subject to the Public Records Act.

Finally, Judge Beauchesne ordered the University to pay CalAware the costs and attorney’s fees it incurred in bringing the lawsuit.

Overall, the attorneys involved were pleased with the decision.  Attorneys Kelly Aviles, CalAware President Dennis Winston, and CalAware General Counsel Terry Francke, all of whom represented CalAware in the lawsuit, issued the following joint statement:

“We are very pleased with the decision.  Judge Beauchesne, who had taken the matter under submission on August 2nd, carefully considered the arguments of all the parties.  Ultimately, he correctly sided with the public’s right to be informed about how its money is being spent.  This ruling upholds California citizens’ right to maintain oversight and control of their government.  Public oversight is the only way that citizens are assured that public money is handled in an appropriate matter.  We are hopeful that this will prompt CSU to reevaluate the way in which it handles public records requests in the future.”

Senator Leland Yee just issued a statement early this morning.

“This is a great day for transparency and government accountability,” said Senator Yee.  “However, it is also a sad day when a public institution so grossly violates state law and when their legal counsel is ignorant of the public records statute.  It is even worse that university administrators attempted to blame students for their own negligence and misconduct.”

The question whether this was public money is muddied by a finding that was made public earlier this week. We now know, based on several reports, that there were a number of problems with this arrangement.  Chief Financial Officer Benjamin Quillian at California State University acknowledged this week that they have  improperly mixed public funding with money from private foundations and the problem is so bad he can’t tell how much money is involved.

According to Lillian Taiz, the President of the California Faculty Association, faculty have long been told that those accounts hold only private money.  However, we now know this is not true.

Furthermore, Palin’s speaking fee would become a public record under a law that Senator Yee has sponsored, SB 330, which “would update the California Public Records Act to include auxiliary organizations and foundations that perform government functions at the University of California, California State University, and California’s community colleges.”

Gov. Arnold Schwarzenegger vetoed a similar bill last year. According to Senator Yee’s release, “To address the Governor’s veto message from last year, the new bill has been amended to exempt from disclosure the names of volunteers and donors who wish to remain anonymous provided they do not receive something of value greater than $500 in exchange for their donation or service.  The bill will also exempt information obtained in the process of soliciting donations.”

The tweaks have apparently made the bill uncontroversial as it passed 71-0 last week.

“SB 330 will help ensure government transparency and will protect funds for public education,” said Senator Yee.  “With today’s vote, we are one step closer to eliminating waste, fraud, and abuse at UC and CSU.  The Governor has a second chance to do the right thing and to provide taxpayers and students what they deserve – information on how their universities are being run and how money is being spent that is intended for the benefit of the public institution.”

“SB 330 would remove the cloak of secrecy that prevents the public from understanding whether significant amounts of educational funding for taxpayer-funded colleges and universities is being spent for the benefit of all Californians or just a privileged few,” said Jim Ewert, Legal Counsel for the California Newspaper Publishers Association.

Meanwhile, Attorney General Jerry Brown hammered CSU-Stanislaus for being ignorant of reporting duties, but found no violations of the law, in his report earlier this month.

Attorney General Edmund G. Brown Jr. announced today that the CSU Stanislaus Foundation has agreed to improve oversight of the money it raises and spends for the school.

“We examined whether money given to a charitable foundation was handled appropriately, but found no violation of law,” Brown said. “However, the foundation board has agreed to make changes to improve oversight of its funds.”

Brown’s Charitable Trusts Section found that the foundation exercised inadequate oversight of its $20 million in assets, but found no misuse of its funds and no violations of state law.

Brown’s audit showed that the foundation’s accounting procedures were inadequate, it failed to understand fully its duties and responsibilities under the law – including basic charitable trust concepts – and it failed to implement its own auditor’s recommendation to prepare a budget for all fundraising events. Recently, the foundation has been working with an independent auditor to rectify these lapses.

The foundation’s board of directors agreed to:

  • Participate in directors’ training on management of charitable organizations and the fiduciary duties of charitable boards of directors.
  • Consider immediately all recommendations made by its independent auditor.
  • Ensure that its relationships with all outside fundraisers comply with California law.
  • Ensure that it consistently follows all its fiscal and governance policies.

While the process was undoubtedly messy, the small crisis resulting from an undisclosed $75,000 speaking fee has led to several key improvements.  If the Governor signs the legislation, it will put such foundations under the clear guise of the California Public Records Act.  It exposed the sloppy bookkeeping and the mixing of monies.  In the end, transparency and accountability have been the clear winners.

—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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23 Comments

  1. Dr. Wu

    Forcing all CSU auxiliary organizations (not just foundations) to comply with the Public Records Act is extremely expensive and time consuming, so the issue is not as simple as it may sound. (Full disclosure–I am on a CSU Foundation board–not one that has been implicated). The problem with public records act requests (and I have had one against me ) is that they are extremely expensive and the PRA does not fully compensate an agency for the true costs of collecting the data. And many PRAs are made and then are never picked up.

    Transparency is a good thing and there is no question that a number of CSU Foundations have issues. Sonoma State, Sac State and Fresno State have all had serious scandals recently. The Stanislaus case, while it received the most news because it involved Palin (and it once again proved the adage that the cover up is worse than the crime) was actually less worrying than some other cases involving loans to board members fixing up the President’s kitchen etc.

    So there is no question that more transparency is needed and at least some Foundations are moving rapidly in that direction. But please also consider that CSUs are are underfunded and most have very small endowments. We are at a time when the CSUs need to raise more money outside and a full PRA makes it difficult. For example, one must be very careful what one says at a meeting (again I am speaking from person experience).

    We need more transparency, but also keep in mind that we are talking about imposing a very restrictive law. AS applied to CSUs the Public Records act allows anyone to know pretty much anything an administrator does down to the calendar on their computer (so you could even know where they had lunch and perhaps what they ate–is this really necessary or in the public interest?)

    My own PRA asked for everything on my university computer. Fortunately there is no case/precedent which says that a faculty member must reveal the same amount of information that an administrator now must.

    So be careful what you wish for. Leland Yee is ambitious and has made much of this issue. THere is no question more transparency is needed, but one also needs a balance. The PRA and many other rules effectively make it more difficult for State Universities to compete with private ones. State universities have enough challenges right now.

  2. David M. Greenwald

    A good point Dr. Wu. I am a frequent requester of information from public entities. However, one thing I think most entities do a poor job with is extracting from the request exactly what they are looking for. I don’t know how they store information and therefore what I think may be a simple request is often tedious and time consuming. When public entities communicate back, I think I have always been able to get what I want but still able to save them time and money. That’s a key, but it takes entities communicating and most don’t. And what happens then is they spend a lot of time and money providing me information I don’t need or want.

  3. E Roberts Musser

    dmg: “Judge Ceauchesne did find that the Foundation itself was not subject to the Public Records Act.”

    dmg: ” If the Governor signs the legislation, it will put such foundations under the clear guise of the California Records Act.”

    Do I assume from these two statements that if the proposed legislation is passed, the charitable foundations of a public university will now be subject to any public records request, when previously they were not?

    dmg: “Meanwhile, Attorney General Jerry Brown hammered CSU-Stanislaus for being ignorant of reporting duties, but found no violations of the law, in his report earlier this month.”

    This statement does not make sense to me. If there was no violation of the law, then why the criticism in regard to ingnorance of reporting duties? I’m confused…

    dmg: “The question whether this was public money is muddied by a finding that was made public earlier this week. We now know based on several reports, that there were a number of problems with this arrangement. Chief Financial Officer Benjamin Quillian at California State University acknowledged this week that they have improperly mixed public funding with money from private foundations and the problem is so bad he can’t tell how much money is involved.”

    So is there going to be a move to make sure that no public money is intertwined with charitable university foundations? Is it illegal?

  4. Dr. Wu

    Foundations are technically completely independent of the universities and are generally set up as 503(c) non-profit organizations. Any commingling with public monies is technically illegal. In practice this is MUCH trickier than most people realize. Some events serve both purposes. Foundations have to comply with University audits and often use the same staff (they should be paid out of separate accounts which is tedious but doable).

    The SF Chronicle had a long article yesterday on this issue. There are allegations of public monies being used for private purposes and vice versa at various CSUs and SF City college (not at SFSU!). THis can and will be stopped, but also we should distinguish between outright fraud and a failure to comply with very onerous rules. Most Foundations are honest (I think/hope) but there have been some shady dealings that need to be stopped.

  5. David M. Greenwald

    [quote]Do I assume from these two statements that if the proposed legislation is passed, the charitable foundations of a public university will now be subject to any public records request, when previously they were not? [/quote]

    That is correct

    [quote]dmg: “Meanwhile, Attorney General Jerry Brown hammered CSU-Stanislaus for being ignorant of reporting duties, but found no violations of the law, in his report earlier this month.”

    This statement does not make sense to me. If there was no violation of the law, then why the criticism in regard to ingnorance of reporting duties? I’m confused… [/quote]

    I think Dr. Wu is correct here, given the complexity of laws and separating monies, I think they ruled that any co-mingling was incidental not nefarious.

  6. Dr. Wu

    The irony here is that the palin case, from the point of legal transgressions, is small potatoes. Sonoma and Fresno state’s infractions are far worse when it comes to shirking fiduciary obligations.

    Stanislaus made money on palin and while I abhor her politics, inviting someone to speak at a fundraiser is totally legit. Shredding after the fact is not.

  7. E Roberts Musser

    Dr. Wu: “The irony here is that the palin case, from the point of legal transgressions, is small potatoes. Sonoma and Fresno state’s infractions are far worse when it comes to shirking fiduciary obligations.
    Stanislaus made money on palin and while I abhor her politics, inviting someone to speak at a fundraiser is totally legit. Shredding after the fact is not.”

    It was ironical that Palin, a Republican speaker, drew so much fire (I don’t care for her either). My guess is that had it been a Democratic speaker being paid $75,000, nothing would have happened/no one would have considered there to be any wrongdoing. Nevertheless, it seems as if something good might come out of this – the cessation of co-mingling private and public funding, clear direction that foundations must comply with the Public Records Act. Although I concede that those who ask for public records should be reasonable in their requests. Dr. Wu, thank you for your invaluable insights…

  8. David M. Greenwald

    I tend to agree, had it not been Palin, the request for information probably wouldn’t have come from the same source and therefore wouldn’t have generated the same response. Probably no one would have bothered to make a request of a lesser known individual, but to me that is part of the problem, how many other times have these things happened?

  9. rusty49

    “It was ironical that Palin, a Republican speaker, drew so much fire (I don’t care for her either). My guess is that had it been a Democratic speaker being paid $75,000, nothing would have happened/no one would have considered there to be any wrongdoing.”

    Exactly, liberal campuses welcome the leftist speakers with open arms and no questions asked. When a conservative speaks all Hell breaks loose. So this is actually good because now all the left wing speakers who do most of the appearances on campus will have their information open to the public. What goes around comes around.

  10. E Roberts Musser

    rusty49: “Exactly, liberal campuses welcome the leftist speakers with open arms and no questions asked. When a conservative speaks all Hell breaks loose. So this is actually good because now all the left wing speakers who do most of the appearances on campus will have their information open to the public. What goes around comes around.”

    Amen! What’s good for the goose is good for the gander…

  11. Dr. Wu

    To me its not left wing/right wing. Palin claims to be a fiscal conservative but her record shows otherwise (e.g., supported bridge to nowhere before she didn’t). She claims to be for family values but her own behavior and that of her family has been, frankly, trashy. (Contrast to Chelsea or W’s kids who despite being trashed by each respective side have turned out rather well.)

    Palin is not an intellectual or a true conservative and as a CSU professor I am ashamed of the association for that reason. I’d say the same about Al Sharpton, who is far more intelligent than Palin but also has shown a lack of ethics, notably in the Tawana Brawley case.

    Lets root for our universities to bring out people who can stimulate thought and open people’s minds. I don’t see that with Palin.

  12. Rich Rifkin

    I recall when John Edwards came to UC Davis to speak–I went to the speech–he was paid $50,000 plus travel and other expenses. Earlier that day he had spoken in Seattle to a law school group, also for $50,000. I remember some people questioning how much UCD was paying Edwards. However, AFAIK, no one ever investigated it. Unlike in the Palin case, where the money paid to her was essentially private, all the money given to Edwards came from UC Davis (though perhaps some of that came from ticket sales at the Mondavi Center).

  13. rusty49

    “Unlike in the Palin case, where the money paid to her was essentially private, all the money given to Edwards came from UC Davis (though perhaps some of that came from ticket sales at the Mondavi Center).”

    OOOPS…where were the hounds then?

  14. Rich Rifkin

    rusty49,

    I just looked up how much Clinton was paid. Apparently he got $100,000 for speaking at the Mondavi Center. However, the interesting thing in the article where I found that ([url]http://mediamatters.org/research/200705230010[/url]) is a discussion over Edwards fee at UCD*, because the author mentions that Fox News gave Edwards a lot of grief over his fee, while the same week Rudy Giuliani got $100,000 speaking at the University of Oklahoma. In other words, this was a case of media bias on the right: [quote]•A May 22 foxnews.com article claimed that Edwards’ speech “at the taxpayer-funded school in January 2006” taught the “students how to avoid poverty — charge $55,000 for a speech.” The article later noted that “Edwards spokesman Eric Schultz told FOX News that the speech at UC Davis, ‘was funded by sponsors and ticket sales,’ and the school has said ticket prices for the event ranged from $17.50 to $45.” The article ended by noting that “[i]ncidentally, students at all of California’s public universities will pay a 7 percent increase in tuition next year.” The article made no mention of Giuliani.
    •On the May 22 edition of Fox News’ Special Report, host Brit Hume brought up Edwards’ speech in two separate segments. In the first, Hume noted that Edwards’ campaign said that “the speech was part of a series at the school and was funded by sponsors and the sale of tickets, which went for as much as $45,” but did not note the reported Giuliani speeches. In the second segment, Hume asked National Public Radio senior national correspondent and Fox News contributor Juan Williams “what we make of” Edwards’ “considerable recent embarrassments.” Neither Hume nor Williams in that segment noted the Edwards campaign’s response or that Giuliani reportedly made $100,000 for his speech at Oklahoma State.[/quote] *Media Matters says Edwards was paid $55,000. I recall it being $50,000 for his speaking fee + $5,000 for expenses. FWIW, in my column I was critical of Lois Wolk for her comments on Edwards. She introduced him and said he was an honorable guy who would not cash in on his celebrity. Rather, she said, he was working on poverty issues at UNC-Chapel Hill. And I replied in my piece, “How is making $100,000 a day giving speeches not cashing in on your celebrity?” I don’t really blame Edwards or anyone else for taking that money. I’d certainly take it if UCD wants to pay me for a speech.

  15. wdf1

    I recall when John Edwards came to UC Davis to speak–I went to the speech–he was paid $50,000 plus travel and other expenses. Earlier that day he had spoken in Seattle to a law school group, also for $50,000. I remember some people questioning how much UCD was paying Edwards. However, AFAIK, no one ever investigated it. Unlike in the Palin case, where the money paid to her was essentially private, all the money given to Edwards came from UC Davis (though perhaps some of that came from ticket sales at the Mondavi Center).

    Perhaps David or Rich could do a piece or interview on the Mondavi Center and find out. It might be worth doing some credible investigation on the matter before saying too much.

    I don’t think Mondavi Arts (who manages the Mondavi Center) gets as much university money as blog comments (recent and past) have suggested. I just don’t have time to do that investigagion to verify one way or another.

  16. wdf1

    Mondavi Center Fact Sheet
    [url]http://www.mondaviarts.org/press/mc_fact_sheet.cfm[/url]

    Budget (probably for 2007-08)
    The Mondavi Center employs a staff of approximately 47 full- and part-time workers and operates on an annual budget of approximately $7.274 million. The largest single source of income is ticket sales. Budget sources include:

    Ticket revenue: 41 percent
    Rentals and other earned income: 17 percent
    Endowments: 22 percent
    Gifts: 12 percent
    Grants: 0.5 percent
    Other: 7.5 percent

  17. E Roberts Musser

    wdf1: “Budget (probably for 2007-08)
    The Mondavi Center employs a staff of approximately 47 full- and part-time workers and operates on an annual budget of approximately $7.274 million. The largest single source of income is ticket sales. Budget sources include:

    Ticket revenue: 41 percent
    Rentals and other earned income: 17 percent
    Endowments: 22 percent
    Gifts: 12 percent
    Grants: 0.5 percent
    Other: 7.5 percent “

    This doesn’t tell us how much university money is used to pay the 47 full/part-time workers or to pay for the maintenance of the center, unless I am missing something…

  18. wdf1

    This doesn’t tell us how much university money is used to pay the 47 full/part-time workers or to pay for the maintenance of the center, unless I am missing something…

    I don’t follow you. Please clarify.

  19. Don Shor

    I think you are missing something. Presumably they are paid out of the annual budget, as described above. I assume that the “Other: 7.5 percent” probably comes mostly from UC directly (it would be useful to know for sure), to the tune of about $545,550.00 by my calculations. How they apportion the income vs expenses is anyone’s guess.

  20. indigorocks

    i don’t know what’s so hard, time consuming and expensive to tell the public, exactly HOW MUCH DID SARAH PALIN GET PAID BY THE FOUNDATION, TO SPEAK AT CSU.
    It can’t be that hard. Thye just wanted to keep the truth from the public and the judgment against the foundation speaks volumes. so does the actions of the members of the foundation who were implicated in hiding the records.
    i’m outraged that attny general brown didn’t bring up charges against the foundation.
    these so called “charitable” foundations should be held accountable for their actions..

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