Headline - Special Edition

Schwarzenegger vetoes SB 330 Transparency Bill

Leland Yee with CSU Stanislaus students & shredded documents pertaining to Sarah Palins visit to the school. 

Documents the Stanislaus foundation claimed didn't exist.

Sacramento – Choosing special interests and ambiguity over much-needed reform in California’s floundering colleges and universities, Gov. Arnold Schwarzenegger has vetoed Senator Leland Yee’s (D-SF) SB 330.

SB 330 would have required foundations and other auxiliary non-profits connected with the state’s public universities and colleges to make their handling of money and other operations more transparent and accountable to the public.

“We are disappointed that the misinformation campaign orchestrated by the CSU and UC administrations led to this important legislation being vetoed. Both they, and the Governor, are out of touch with the public’s demand for greater transparency in foundations and auxiliaries that are so closely tied to our public universities,” said CFA President Lillian Taiz, a professor of History at Cal State Los Angeles.

Taiz continued, “This veto means that our public universities can continue to conceal the abuses that have resulted in so many scandals over the past few years. It is an especially sad day for our students who we believe would have benefited most from the proper oversight of this money”

CSU Chancellor Charles Reed and executives in the UC system worked aggressively through back channels to convince the Governor to veto the bill, falsely claiming it would result in a ‘chilling effect’ on private donations. In fact, the bill allows for donors to remain anonymous unless they receive something in return of more than $500 in value. Moreover, at the University of Iowa, donations increased significantly after a similar law was enacted.

Yee Takes Governor to Task Over Veto

The bill’s author, Senator Leland Yee (D-San Francisco), referred to the Governor’s action as “completely hypocritical” and referred to Schwarzenegger’s tenure as a “failure” on issues of open government.

“For a Governor who wanted to blow up the boxes and whose rhetoric is filled with platitudes of open government, it is a disgrace and completely hypocritical to then veto legislation to bring real transparency and accountability to our public universities,” said Yee.

“The Governor, like his ivory tower counterparts within the UC and CSU administrations, failed California taxpayers and students by vetoing this sunshine legislation. He has secured his legacy as Governor – a failure when it came to open government.”

“It is appalling, especially after the recent outrage regarding the City of Bell, that the Governor would ensure that scandals continue to plague our public universities,” said Yee.

“His veto allows these public institutions to continue to hide billions of dollars without any accountability. He ignored the facts – these auxiliaries are fully staffed by public employees; they often administer public funds; the donors were provided anonymity; and that secrecy breeds corruption, not more donations.”

Background on SB 330

Senate Bill (SB) 330 would have required foundations and other auxiliary non-profits connected with the state’s public universities and colleges to make their handling of money and other operations more transparent and accountable to the public. The bill was authored by Senator Leland Yee (D-San Francisco).

In the California State University alone, the money hidden in these foundations is huge.

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

Several well-publicized scandals at CSU and community colleges – including CSU Stanislaus, Sonoma, Fresno and Sacramento State as well as San Francisco City College – have made it abundantly clear that reform is needed.

The questionable practices of these auxiliaries have prompted a series of investigations by the state Attorney General, an inspection by the State Auditor, and intense media scrutiny.

While the governor vetoed a similar bill last year, saying it could scare off donors and volunteers by compromising their privacy, CFA and Yee amended SB 330 to exempt most volunteers and donors who wish to remain anonymous, along with keeping donor lists and foundation research confidential.

The California Faculty Association and the California Newspaper Publishers Association co-sponsored SB 330. The bill drew outside support from groups as diverse as Cal-Aware and the California Taxpayers Association and received strong bi-partisan support in the legislature. Editorial boards from newspapers across the state had urged the governor to sign the bill including: the Los Angeles Times, San Jose Mercury News, San Francisco Chronicle, Sacramento Bee, Santa Rosa Press Democrat, Fresno Bee, Long Beach Press-Telegram and many others.