Palin dispute raises questions about university foundations

In 2009, CSU spent 40 percent of the money raised by its auxiliary organizations—or $570 million—on instruction, research, and academic support, according to Lori Redfearn, CSU’s assistant vice chancellor for advancement services. The rest was used to fund other campus services, including $41 million for scholarships, she said.

“Our auxiliaries play a vital role in making sure we can provide the best educational experience possible for our students,” Redfearn said. “We hope a particular incident doesn’t overshadow all the vital work these organizations are doing.”

The nonprofit university foundations, which raise money to supplement student fees and state funds, are subject to university oversight and provide regular financial reports to campus leadership.

A 2001 state appeals court case ruled that university foundations and auxiliary organizations are not subject to the same public disclosure requirements as universities themselves. However, the court also ruled that foundation documents must be made public when they are in the university’s possession.

In the 2001 case involving Fresno State University, a state appeals court ruled that auxiliary associations were not subject to the California Public Records Act because the act offers only a limited definition of what constitutes a public body.

Lawmakers and the union representing college professors have criticized the loophole, saying it has allowed foundations to escape proper scrutiny.

Last July, the California Faculty Association sent a letter to Brown asking him to investigate allegations of mismanaged donations. Those included more than $9.6 million in loans made by a Sonoma State University foundation to a former board member—the first payment coming two days after he resigned in 1995.

In October, Brown’s office informed the foundation it was conducting an audit.

“There has been an explosion of these very private—one could almost say secretive—foundations,” California Faculty Association president Lillian Taiz said April 14. “I don’t know that there are problems at all of them, but incidents seem to crop up almost monthly.”

Californians Aware described the CSU Stanislaus Foundation as a “virtual alter ego” of the university. All but one member of the foundation’s staff and several officers on its board are university employees, and the headquarters of the foundation is located in the university’s main administration building.

Several CSU Stanislaus students said they retrieved a portion of the contract with Palin from a trash bin outside the campus administration building last week.

The five-page document included perks such as first-class airfare for two, deluxe hotel accommodations, and bottled water with bendable straws. In addition, all audience questions after the speech must be prescreened and posed by a designated representative.

The students presented the contract along with piles of other paperwork, some of it shredded, to Brown on April 13.

Later that day, Brown’s office announced it would investigate the CSU Stanislaus Foundation’s finances and alleged dumping of documents.

Brown, a candidate for governor, said he would seek to determine whether the CSU Stanislaus Foundation, which has assets of more than $20 million, is spending its money to benefit the university. He said he was primarily concerned with ensuring that no foundation money is wasted or misspent, and the investigation has nothing to do with Palin herself.

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