Senate Bill 218, which would affect the financial records of California’s public universities and community colleges, is on the Assembly floor to be voted on this week.
If passed, the bill would disclose the finances of private foundations — or auxiliaries within schools to raise and spend money — to taxpayers and the media, said Adam Keigwin, chief of staff for Sen. Leland Yee (D-San Francisco).
If the Assembly floor approves the bill, it would then go to Gov. Arnold Schwarzenegger for his signature.
Reading from a prepared statement, California State University media relations specialist Erik Fallis said the CSU system opposes the bill because “SB 218 could diminish the CSU’s ability to raise private funds and redirect limited resources during a historic state fiscal crisis.”
Keigwin said the auxiliaries — which range from anything such as on-campus bookstores to event arenas — are organizations set up “to avoid the [California] Public Records Act.”
At Cal State Long Beach, it would force entities such as the Foundation, Associated Students Inc. and Forty-Niner Shops Inc. to make its financial information public under SB 218.
“We’ve had cases to uncover and believe there could be more,” Keigwin added, alluding to instances at Sonoma State, Fresno State and San Francisco City College.
A Sonoma State foundation made a $1.25 million personal loan to former foundation board member Clem Carinalli, who could not repay the funds, the Santa Rosa Press Democrat reported in July.
At Fresno State, former CSU trustee Moctesuma Esparza, who resigned in 2007, was picked to run a movie theater built by a university foundation. Esparza had a conflict of interest, as he was the CEO of the movie theater company Maya Cinemas North America Inc., the Fresno Bee reported in July.
In 2001, Fresno State was also involved in a case regarding the sale of luxury suites for its on-campus basketball arena. The Fresno Bee was denied the names of the donors and what they contributed because “a court held that the California Public Records Act did not cover the information,” the Los Angeles Times reported in an Aug. 18 editorial.
At San Francisco City College, former Chancellor Philip Day was indicted on charges that include allegedly “diverting money from a foundation account to pay for a club membership, liquor and other expenses,” according to the editorial.
Two years ago, another case involved CSU Sacramento President Alexander Gonzalez, who was given a low-interest $233,000 personal loan through an auxiliary and spent $27,000 remodeling his home kitchen, the Sacramento Bee reported in November 2007.
The CSULB Bookstore, which is part of Forty-Niner Shops Inc., is opposed to SB 218 but “not because of transparency,” said communications director Rosa Hernandez.
“It varies by campus,” she said, adding that the bookstore is a commercial, non-profit business. “A lot of vendors [commercial contracts] are not disclosed. If we publicize our commercial agreements, we believe prices will go up … if you know what the competition is bringing to the table.”
Hernandez added that the bookstore is already doing a lot of the things asked — including publicizing its agenda meetings — and will eventually publicize financial statements “within the next few months … and definitely by the end of the semester.”
SB 218 “simply gets rid of a loophole,” according to Chris Burnett, a CSULB media law professor.
“It’s natural the members of the university community would oppose legislation that makes public accountability more transparent,” Burnett said. “The question is where the greater good is? In my view, it’s important for citizens and journalists to be able to get that information. So I think it’s great that Sen. Yee has proposed this. … I hope that they pass this before they adjourn this month … and I would hope [Schwarzenegger] would sign it.”
BREAKING NEWS (9/3/2009): SB 218 Approved by CA Assembly. »Read more