CHANCELLOR SOUGHT TO COVER UP STANISLAUS CONTROVERSY

CFA HEADLINES


May 11, 2010 - SPECIAL EDITION FROM CFA

Emails released by CSU Stanislaus reveal Chancellor Reed ordered secrecy of Palin contract in an attempt to avoid bad publicity

Documents released earlier this week implicate CSU Chancellor Charles B. Reed in the ongoing controversy at CSU Stanislaus regarding Sarah Palin’s planned visit.

Among several documents released by California State University Stanislaus regarding the upcoming visit by Palin is an email correspondence between Reed and Bernie Swain, chairman of the Washington Speakers Bureau, the entity with which the university contracted for the Palin event.  The email exchanges reveal that documents were withheld simply to avoid “another round of newspaper stories.”

In an email to Reed, Swain states: “The release of the fee, while well-intentioned to share all details, will likely only serve as the financial headline for a new round of stories rather than the intended purpose of clearing the air and making the stories go away. Your event needs fewer story lines, less oxygen for the fuel, not more. We believe, as others have said, any real damage has already been done and after a few days these inquires and stories will slowly, but surely, end…You are a dear friend and I wish I could make this instantly better for you.”

Reed responded and copied other CSU officials: “Bernie, I agree with you that the damage is done and the disclosure will just cause another round of newspaper stories. The campus should have worked this through with you all in the beginning. I will try and call you the next time I am in Washington and see if we can have lunch or a cup of coffee.”

Kristen Olsen, who heads the Stanislaus campus public relations office, responded to Reed’s email: “Good news. The Chancellor is satisfied now with not disclosing the fee.”

State Senator Leland Yee, who is author of a bill to bring more transparency to CSU auxiliaries, is apparently incensed by the latest revelation in the CSU Stanislaus Foundation’s secrecy saga.

“More and more evidence is demonstrating a clear violation of the public records act by CSU officials, and now there is proof that Chancellor Reed was complicit in it,” said Yee in a news release.  “Chancellor Reed and President Shirvani were more concerned with covering up an embarrassing story than complying with state law.”

“There is absolutely no doubt that public funds – through the use of university resources and employees – have been used for this event and yet the taxpayers are being kept in the dark,” Yee said, adding, “Chancellor Reed is well aware of the law that requires foundation documents in the possession of university employees to be disclosed. The administration has failed the taxpayers and the students. It is now imperative that the Board of Trustees hold these executives accountable.”

View these emails online at: http://calfac.org/allpdf/newsreleas/2010_pressrel/ReedEmailsonStanislaus.pdf

FACULTY REACTION

Upon hearing about the most recent twist in the Stanislaus saga, CFA President Lillian Taiz, a professor of history at CSU Los Angeles issued this statement:

"We have seen many of questionable activities in the California State University, especially involving the foundations and other auxiliaries.

"But even we are stunned to learn that CSU Chancellor Charles Reed himself made the decision to cover up the amount of the speaker fee being paid to Sarah Palin by the CSU Stanislaus Foundation.

"The Chancellor’s intimate involvement in avoiding public information requests made under state law because of his fear of negative publicity is a shocking demonstration of poor judgment and questionable leadership.

"His lack of commitment to openness in the governance of our public university system harms not only his image but the credibility of our entire system. Revelations like this embarrass all of us who have spent our careers building this great university.
"CFA calls upon the Attorney General Jerry Brown to expand the scope of his investigation into CSU auxiliaries to include Chancellor Charles Reed and his office at Golden Shores. Apparently campuses hiding information from taxpayers is not only campus policy, but is also the chancellor's system wide policy."
SHOWS THE NEED FOR CSU TRANSPARENCY


CFA emphasizes that the controversy at Stanislaus – which centers around the campus foundation – shows the pressing need for the passage of CSU transparency legislation Senate Bill 330.

SB 330 – which is currently being considered by the state legislature – will bring greater transparency and accountability to how private donations and student campus fees are used at the California State University, University of California and California Community Colleges. It will place the institutions’ subsidiary organizations – known as “auxiliaries” – under the scope of the California Public Records Act (CPRA) without creating new state costs.

Under existing law, although the CSU, UC and community colleges are already subject to the CPRA, almost all of their auxiliaries are not. This allows these public institutions to hide billions of dollars in “private” entities funded by student campus fees and private donations that have little, if any, transparency or accountability to the public or elected state leaders.

This secrecy has encouraged colleges and universities to create an increasing number of auxiliaries to run campus operations such as food services, parking facilities, housing and bookstores – all of which would be subject to the CPRA and public oversight if they were administered directly by the college or university rather than an auxiliary.

By its own admission, 20 percent of the CSU’s operating budget – or $1.34 billion – is funded by the hidden budgets of its campus and system auxiliaries.

Cal Poly Pomona Provost Wants to Ax Fine Arts

1. 
   
   
   In an article posted at Furlough Fridays on the meeting between the Provost and students and faculty protesting his proposal to eliminate the Fine Arts option at Cal Poly Pomona, the intrepid Furlough Friday reporter states:
   "Once again during the lunch-time forum, support for AB 656, a proposed oil extraction tax bill was mentioned by students as a possible solution, but [Martin] den Boer came out strongly against the bill saying funding from the bill would not lead to a net increase in Higher Education, but would just lead to 'a reallocation of funding.'” 
   This is the comment that I left on the article:
   "Provost denBoer’s assertion that passage of AB 656 would only result in the legislature’s reallocation of funds away from higher education echoes the talking points that originate from Chancellor Reed’s office. President Ortiz made the same ridiculous claim in his exchange with me last month during the Brown Bags with the President.
   "If AB 656 passed the state assembly then why would the same body that just passed the bill turn around and take money away from what they just gave money to? And if AB 656 passes and the governor tried to reallocate money away from higher education, then what kind of reaction do you think the governor would have to deal with from the assembly and from the public?
   "It is dishonest and disgraceful for Reed, Ortiz, denBoer and the rest of the high administrators to be opposing AB 656 and slashing programs such as Fine Arts, slashing faculty and cutting classes and students. Students organized by SQE were going to hold a 10-day hunger strike this week demanding restoration of the $305 million that was cut from the budget this year. When word leaked out about this strike before it started, the governor’s office quickly issued word that they would restore the $305 million. The point is, that political action makes a difference and is the only thing that will do any good."
   --
   I am reminded of the role played by the infamous BIA (Bureau of Indian Affairs) when considering the role played by our ostensible CSU administrative leaders. Like the BIA, they are supposed to see to the interests of their charges - in their case American Indians and in our case, the faculty, staff, students and the community that makes up and depends upon the CSU. Like the BIA, they consistently betray the interests of those they supposedly represent. Lying about why they continue to oppose the solution to the budget crisis is shameful behavior. They should resign or be forced from office. 

Privateers Strike Out Again

From Firedoglake, May 2, 2010:

"Charter Schools: Yet Another 'Free Market' Innovation That Can't Stand on Its Own Two Feet"

Ho-hum. Another day, another "free market solution" that just can’t stand on its own two feet:

But for all their support and cultural cachet, the majority of the 5,000 or so charter schools nationwide appear to be no better, and in many cases worse, than local public schools when measured by achievement on standardized tests, according to experts citing years of research. Last year one of the most comprehensive studies, by researchers from Stanford University, found that fewer than one-fifth of charter schools nationally offered a better education than comparable local schools, almost half offered an equivalent education and more than a third, 37 percent, were “significantly worse.”

Although “charter schools have become a rallying cry for education reformers,” the report, by the Center for Research on Education Outcomes, warned, “this study reveals in unmistakable terms that, in the aggregate, charter students are not faring as well” as students in traditional schools.
Researchers for this study and others pointed to a successful minority of charter schools — numbering perhaps in the hundreds — and these are the ones around which celebrities and philanthropists rally, energized by their narrowing of the achievement gap between poor minority students and white students.

It’s not like this is a new or unusual thing with the charter school movement. The only thing that kept Edison Schools alive was constant propping up by outside sources (such as when Jeb Bush raided the pension funds of Florida’s genuine public-school teachers to subsidize Edison when it was about to go belly-up), as well as a dependence on Wall Streeters to be unusually forgiving of financial failure:

According to the company’s September 2001 proxy statement, the company lent [Edison CEO Chris] Whittle $6.6 million on November 15, 1999 and $1.2 million on April 13, 2000 to exercise options to purchase stock in the company. In other words, the company was loaning him money to purchase stock in itself — not an uncommon practice. By September 30th, 2001 the combined principal and interest on those two loans totalled $9.2 million.

So far so good.

Now what’s interesting is the collateral Whittle put up for these two loans. It turns out it was the shares themselves, the shares he was buying with the loans. As the proxy statement says "The loans are collateralized only by the shares …"

Now the problem is, like the Chicago Bulls and ten year old beer, that stock ain’t what it used to be. In fact, as you can see from this handy diagram, Edison’s stock is now virtually worthless. A year ago shares in Edison went for about $23 a pop. Today the stock closed at 85 cents, its lowest close all year.

What all of this means of course is that there now isn’t any collateral for those loans. That stock is now worth only a fraction of what it was back in the day. In the real world, Whittle would now be facing the dreaded margin call.

So why, if this thing is such an utter failure by free-market, get-government-out-of-our-lives standards, has it been kept on life support for the past decade?

Simple: It’s all about destroying yet another set of unions — in this case, the teachers’ unions. That’s why so many rich people and Third Way (or what we know as DINO) types back it — and why the recent push for unions to organize charter-school teachers is freaking out the people who back these schools.

***

I would differ about the rationale here being just about destroying unions. It is about that, but it is also, and mainly about attempting to destroy public education and public goods and the public interest more generally. This agenda is what animates and drives those who are leading the CSU system as well: privatize, privatize, privatize.