CSUN University News Clippings

Governor’s veto of college foundation access bill criticized

(October 19, 2009)

By Thomas Peele
Published: 10/16/2009

Private foundations spend billions of dollars every year funding college programs, yet those spending records will remain closed to the public after a recent veto by Gov. Arnold Schwarzenegger that has enraged open-records advocates.

“The governor chose corruption and self-dealing over the public’s right to know,” said Jim Ewart, a lawyer for the California Newspaper Publishers Association, who lobbied for the bill.

Senate Bill 218, sponsored by state Sen. Leland Yee, D-San Francisco, would have required Public Records Act disclosure of the financial records of foundations that perform government functions at the University of California and California State University systems as well as community colleges. It passed both houses of the Legislature with only one ‘no’ vote.

Roughly one-fifth of the Cal State system’s $6.7 billion budget comes from foundations and auxiliaries that are not required to disclose financial information, Yee said.

“The governor has failed to keep his promise of bringing better sunshine to government agencies,” Yee said in a statement. The veto will “allow further scandal at these public institutions.”

The governor’s veto message stated that the bill would have hindered “private giving of time and resources” and become “a detriment to our higher-education institutions.”

It would have caused a “chilling effect” of donors “if they believe their personal privacy could be compromised” and would have caused “a loss of private donations and volunteer activities.”

A spokesman for the governor did not respond to a request for further comment.

Ewart said the governor “is just wrong” about the privacy issue because the bill would have allowed donors and volunteers to remain anonymous even under the reforms.

“He clearly misunderstood the language in the bill,” Ewart said. “And he decided to hide behind the skirt of secrecy.”

Ewart and Yee said recent scandals at several colleges highlighted the need for the legislation:

# A foundation at Sonoma State lent $1.25 million to a former board, who then defaulted on the loan after suffering real estate losses. The money was meant for scholarships.

# A member of a foundation at Fresno State received a no-bid management contract for a business in which he held a financial interest. A judge ruled the foundation member is bound by state conflict of interest laws.

# An auxiliary organization at Sacramento State purchased a commercial building in 2007, was unable to find tenants and received $6.3 million in funds from the campus’ general fund to offset the lost revenue.

Publication: Contra Costa Times