Calif. bill would shine light on university foundations, auxiliary organizations

CALIFORNIA — A bill that would provide better access toopen records at California’s public, higher-education institutions hasbeen routed to the State Assembly Committee on Appropriations, though proponentsof the legislation say it should not cost any money.

Senate Bill 218 would amend the California Public Records Act to include”auxiliary organizations that receive public funds or perform governmentfunctions on state campuses.” Auxiliary organizations include universityfoundations, fundraising groups, and other campus associations likebookstores.

On July 14, the bill was referred to the Assembly Committee onAppropriations instead of being considered by the full Assembly. The bill,authored by Sen. Leland Yee, D-San Francisco/San Mateo, passed the State Senatein June by a 32-1 vote and unanimously passed the State Assembly GovernmentalOrganization Committee on July 8.

Yee noted there have been several recent instances in California whenuniversities’ auxiliary organizations have been used to pay back politicalfavors or bolster some employees’ business holdings.

“[The bill] is important because more and more of the functions ofour institutions of higher education are now being shifted over to theseauxiliary organizations,” Yee said. “It’s extremely importantthat we shine light on these deals and transactions to make sure the publictrust isn’t taken advantage of.”

Jim Ewert, legal counsel for the California Newspapers Association, saidthe bill would not have any fiscal impact or require an appropriation of funds,which has left him confused as to why the bill is now in the appropriationscommittee.

The Committee on Appropriations pulled the bill into its committee for anAugust hearing at the request of the University of California, according toEwert.

“The basis of UC’s request is that they’re going to haveto spend money to deal with all of the public records requests that will be madeof auxiliary organizations on their campuses,” he said, adding UC hascontended since the bill was introduced that auxiliary organizations areprivate. “Then why is UC spending public money to address the legal issuesof a private organization?”

Adam Keigwin, Yee’s communications director, agreed the bill does nothave a financial impact. But if it is misconstrued to be costly in the midst ofstate budget cuts, he noted, the bill could die in the appropriationscommittee.

“We will certainly go in there and make the argument that there is nocost,” he said. “But make no mistake that the UC and [CaliforniaState University] are using their powerful and high-priced lobbyists to trykilling this bill.”

Steve Juarez, the director for state governmental relations at theUniversity of California, said he thinks the bill would have a fiscal impact onthe university –though not because of fulfilling an increased number ofpublic records requests.

“Our primary point of opposition is the chilling impact we believethe bill would have on potential donors and volunteers who work on behalf of theuniversity through our foundation,” Juarez said. “Subjecting them tothe same rules [as the university] will have a chilling effect on theirwillingness to participate.”

Juarez said the bill “pretends” to allow donors to giveanonymously without being subject to open records laws. He added that if thebill is passed, it might require the auxiliary organizations to release thenames of anonymous donors.

SB 218 stems from a Fresno Bee investigation into who was purchasinghigh-end suites in the school’s new basketball arena. Public recordsrequests to the two non-profit foundations tasked to fundraise for the arena andhelp sell the suites were denied. In a resulting lawsuit, a California appellatecourt said it felt the auxiliary organizations ought to fall under thestate’s public records act. But, the court said, the law was too narrow toapply, noting changes were the Legislature’s responsibility.

There are 87 foundations and auxiliary organizations on CSU’s 23campuses, according to a statement from Yee’s office. Of its $6.7 billionbudget, the university keeps 20 percent — or $1.34 billion — inauxiliary organizations and effectively out of the public’s eye, accordingto the statement.

California universities have recently denied Freedom of Information Actrequests for information about textbook sales at the campus bookstore andsalaries of student body executives, claiming both groups are auxiliaries, Ewertsaid. He added he is afraid many of the organizations are campus “slushfunds” that pay executives high salaries.

Student media has also been affected by the interpretation. Ewert notedseveral student newspapers have been denied information from auxiliarygroups.

Yee has helped pass other legislation that ensured a more open government,including within higher education. Keigwin said the senator would continue tofight for the passage of SB 218.

“At the end of the day, these are public institutions, and theyshould be transparent,” Keigwin said. “We should know what’sgoing on there. The taxpayer deserves to know how their universities arerun.”