An escalating controversy involving a California State University foundation that hired Sarah Palin to give a speech has shed light on legal loopholes that allow such foundations to operate with little public oversight—and now some stakeholders are calling for greater accountability for these auxiliary organizations.
The state attorney general’s office announced April 13 that it would investigate California State University, Stanislaus, and its foundation for their handling of the contract for Palin’s speech. Meanwhile, a California group that advocates for open government filed a lawsuit April 16 against the university over its refusal to disclose documents related to the speech.
The state attorney general’s investigation has sparked a new round of calls for greater transparency and financial accountability for organizations embedded within California’s public universities, particularly given the size of their assets.
“Prudent financial stewardship is crucial at a time in which universities face vastly decreased state funding and increased student fees,” Attorney General Jerry Brown said while announcing his investigation.
Californians Aware filed a lawsuit in Stanislaus County Superior Court against CSU Stanislaus, seeking an order by a judge to release information about Palin’s contract with the school’s nonprofit foundation.
The former Alaska governor and Republican vice presidential candidate is scheduled to visit the Central Valley, Calif., campus in June. Palin is now a commentator for the Fox News cable television network.
The university has repeatedly denied public-records requests filed by Californians Aware, a state lawmaker, and the Associated Press (AP) seeking Palin-related documents. It says contract negotiations were handled by its foundation, which it claims is legally exempt from the California Public Records Act.
Palin’s fee and accommodations will be covered entirely by private donations, not state funds, foundation board president Matt Swanson has said.
Students said they found part of the contract with Palin in a university trash bin after state Sen. Leland Yee, D-San Francisco, had formally requested records related to Palin’s appearance.
The university told Yee it did not have any documents related to the speech and said it had referred the matter to Swanson.
Swanson sent letters to Yee and the AP stating that Palin’s contract had a nondisclosure clause. He also said university foundations and other auxiliary organizations were not subject to the same public-records requirements as the university itself.
Geoff O’Neill, the University of California vice president for institutional advancement, called the investigation at CSU Stanislaus and related allegations regrettable.
“It’s unfortunate if these types of activities result in a lack of confidence in university or college foundations,” he said. “Here at UC, they really are instrumental in helping us raise significant sums of private support.”
Foundations at each of the 10 University of California campuses control assets totaling nearly $4 billion, according to an independent audit commissioned by the university. By comparison, UC received $2.6 billion in state general funds this year, the state budget office says.
The 93 auxiliary bodies and foundations at California State University campuses control $1.34 billion, according to the CSU chancellor’s office.