Stock photo.

The financial books for the Cal Poly Foundation and the Cal Poly Corporation will remain closed after Gov. Arnold Schwarzenegger vetoed the Higher Education Transparency Bill last Thursday.

The bill, also known as Senate Bill 330 (SB 330), would have updated the California Public Records Act to include auxiliary organizations at California State University (CSU), University of California (UC) and California Community Colleges, as stated in state Senator Leland Yee’s press release on Oct. 1.

For example, an auxiliary organization like the Cal Poly Foundation receives donations and private funds. It is a non-profit business which funds different programs throughout the campus. It even provides money for scholarships, research and in some cases, building construction.

“They are non-profit organizations so they have more flexibility,” said Erik Fallis, the media specialist at the CSU Chancellor’s Office. “They can move in ways that state institutions can’t.”

Yee, a Democrat from San Francisco and the author of SB 330, wrote the bill in order to inform the public of how exactly these organizations were “moving” their money.

For the time being, however, that data will remain confidential.

Gov. Schwarzenegger issued a statement released to the media, saying, “while I am a firm believer in providing openness and transparency when it involves public entities and public funding, this bill inappropriately places private auxiliary organizations that receive private funds, under the provisions of the California Public Records Act.”

But with high profile concerns at CSU Stanislaus and Fresno State in regards to how auxiliaries have been spending their money, Yee and Cal Poly professors feel these organizations should be subject to the same rules as public institutions.

“Nothing can get me more irritated than to have something happen that is a bad … or misuse of money, while (the universities) are in a struggle to get enough classroom space,” said Cal Poly political science professor Allen Settle.

Despite the feelings of professors, the veto of SB 330 comes as a victory to people at the CSU Chancellor’s Office.

“For now, we think it was a good decision by the governor,” said Bonnie Murphy, the associate vice president of Commercial Services and executive director of the Cal Poly Corporation.

Murphy said that in the eyes of the Cal Poly Corporation, the bill was too broad and it really was not clear to them what was trying to be solved.

Those at the CSU Chancellor’s Office expressed similar feelings.

“We opposed SB 330 as it is currently written,” Fallis said. “If auxiliaries aren’t allowed to function as made, it can be bad for students.”

But the biggest concern to the public is why the CSU and UC administrators are against opening up their records.

“They shouldn’t be (fearful),” Settle said. “If everything is legitimate and they passed an audit they should be perfectly happy to let you see the books.”

Larry Kelley, the vice president of Administration and Finance for the Cal Poly Corporation, begs to differ.

With financial records being posted online and board meetings open to the public both Kelley and Murphy believe that they are doing their part to be transparent.

“We are showing information already,” Kelley said. “We don’t want to discourage donors.”

Many people who make donations do so anonymously, Kelley said. Under current conditions, with the records being closed to the public, those people are secure in their anonymity. However, there are speculations that SB 330 would not allow for continued anonymity.

“There are, in the bill, some protections for keeping anonymity, but they are somewhat vague,” Fallis said. “There is a possibility that (the donors) could lose rights to anonymity.”

Settle disagrees entirely.

“That’s nonsense,” he said. “Donor anonymity can be always assured as a condition of a donation. That’s more of a front to say, ‘Oh, we can’t do this for anonymity.’ Anonymity is easy to preserve. They are clearly not going to be handing out social security numbers to you.”

As stated in the press release on Yee’s website, the bill allows for donors to stay anonymous under all circumstances unless they receive something worth $500 in return for the donation.

With such a negative response to the bill from the administrators at the CSU Chancellor’s Office in regards to the anonymity clause, does that mean many donors are receiving things in return for donations? That’s something that will not be known unless the books are opened to the public.

And for Settle, that is not even the main issue at hand.

“I don’t care about who gives us the money; what I care about is, how did you spend it? And did you do a competitive bid on contracting and was it done correctly?” Settle said.

However, opponents of SB 330 all use the “chilling effect”— that campus supporters would stop donating because of the bill — as the main reason against support of SB 330.

Another issue the Cal Poly Corporation had with the bill was that El Corral Bookstore and Campus Dining would have to open their records to the public — a group that includes other retailers and competitors.

“This gives outside stores an unfair advantage,” Kelley said.

Besides giving competitors an advantage, Murphy said they would also be able to view special discounts vendors give the on-campus businesses.

“This could potentially damage our relationship with the vendors,” she said.

With other businesses able to see the discounts that on-campus corporations are getting, they could express concern to the vendors, possibly making them cease to offer the discounts.

Settle said that while he understands why the bookstore and dining corporations do not want that information out in the open, he speculated that was not the main reason people working for these corporations did not want the books released to the public eye.

“I can see that (being proprietary is an issue) but that’s not the issue on this matter — it’s a side issue,” Settle said. “May I suggest that some of these people that want to snowball (this bill) might just be afraid for their own necks.”

Whatever the rationale, the governor returned the bill without his signature. This means the Higher Education Transparency Bill will probably languish until spending irregularities occur to cause further disclosures.

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1 Comment

  1. Leeland Yee is a San Francisco politician who has received tens of thousands of dollars from civil servant’s unions throughout his political life.

    Knowing the State is facing massive deficits, Yee attempted to payback his union backers by trying to gain access to foundation monies so they could be distributed to union employees such as those found at every level of Cal Poly and related organizations.

    Thankfully Yee’s attempt was thwarted. Perhaps now he’ll focus on the real reason for the deficits which are the pensions and benefits paid to his union buddies.

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