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.
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