When she agreed to a June 25 appearance at the Stanislaus campus of California State University, former Alaska Gov. Sarah Palin demanded deluxe accommodations, a bendable straw for her bottled water, pre-screened questions, and plenty of privacy.
Palin’s visit is sponsored by the nonprofit California State Stanislaus Foundation, not by the university itself. When state Sen. Leland Yee asked last month how much Palin would be paid, the foundation refused to say, citing a nondisclosure clause in the former vice presidential candidate’s contract. The foundation claimed that, because it is not technically part of the public university, it is not subject to the Public Records Act.
Students at the university did a bit of Dumpster-diving and came up with a portion of Palin’s contract along with other paperwork, some of it shredded, related to the appearance. While the recovered portions of the contract do not include Palin’s speaking fee, they do include some of her other demands (like her need for a bendable straw).
Californians Aware, a Sacramento nonprofit, has filed a lawsuit demanding the entirety of the documents - preferably not shredded and smeared with trash. While it might be interesting to know exactly what it takes to bring Palin to a college campus, Californians Aware says that it is more interested in establishing the principle that university foundations are subject to the same public records laws that apply to universities themselves.
Terry Francke, general counsel for Californians Aware, said, “The university could publish the contract on the Web tomorrow, and our suit would go on. It's not idle curiosity. The public should have the ability to look over the shoulder of state officers,” including in their supervision of auxiliary groups.
The CSU Stanislaus Foundation is deeply intertwined with the university, leading Californians Aware to characterize the foundation as a “virtual alter ego” of the university. The foundation’s policies require university officers to review all of its contracts. That requirement is easy to carry out, given that the foundation is housed in the campus’s main administrative building. All but one member of the foundation’s staff and several of the officers on its board are university employees. Hamid Shirvani is the president of both the campus and the foundation.
In spite of this overlap, foundation board president Matt Swanson says public records laws should not apply because no public funds will be used to bring Palin to campus or to pay the undisclosed amount due to her as a speaker’s fee. The CSU Stanislaus Foundation is a separate and non-public entity, he and Shirvani say.
But this nominal separation should not hold. In the realm of college sports, non-university fundraising groups are very clearly considered to be extensions of their affiliated schools, and universities must ensure that these groups abide by the rules. An infraction on the part of a booster group, for example providing an athlete with under-the-table compensation, can cause the school to forfeit games or be suspended from postseason tournaments.
The present laws concerning public records laws and university foundations are murky at best. A 2001 California state appeals court case established that university foundations and auxiliary organizations are not subject to the same disclosure requirements as universities themselves. But, if an auxiliary group’s documents are in the university’s possession, then they must be made public, according to the ruling.
The Californians Aware suit may result in a more thorough interpretation of existing laws that would prevent public university officials from being able to act through auxiliary groups in order to avoid oversight. If the court case does not succeed, Yee, the state senator who made the initial request for the Palin documents, intends to pursue a legislative fix, requiring auxiliary groups and foundations to comply with the same public disclosure laws as their affiliated universities.
Another possible solution, building on the 2001 appeals court decision, would be to require that universities be furnished with copies of all documents and records relating to activities that use university facilities or personnel, even outside normal school hours and operations. The documents would then be in university possession and would be subject to public disclosure, in addition to oversight by university officials. This would put an end to dodges like the one the CSU Stanislaus Foundation tried to pull in connection with the Palin appearance.
The incident highlights an important loophole that should be closed to prevent officials at universities and other public agencies from acting in secret through ostensibly independent entities. This is an issue that ought to be addressed, not only in California, but in every state where citizens have an interest in knowing how their facilities and their tax dollars are used.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
When she agreed to a June 25 appearance at the Stanislaus campus of California State University, former Alaska Gov. Sarah Palin demanded deluxe accommodations, a bendable straw for her bottled water, pre-screened questions, and plenty of privacy.
Palin’s visit is sponsored by the nonprofit California State Stanislaus Foundation, not by the university itself. When state Sen. Leland Yee asked last month how much Palin would be paid, the foundation refused to say, citing a nondisclosure clause in the former vice presidential candidate’s contract. The foundation claimed that, because it is not technically part of the public university, it is not subject to the Public Records Act.
Students at the university did a bit of Dumpster-diving and came up with a portion of Palin’s contract along with other paperwork, some of it shredded, related to the appearance. While the recovered portions of the contract do not include Palin’s speaking fee, they do include some of her other demands (like her need for a bendable straw).
Californians Aware, a Sacramento nonprofit, has filed a lawsuit demanding the entirety of the documents - preferably not shredded and smeared with trash. While it might be interesting to know exactly what it takes to bring Palin to a college campus, Californians Aware says that it is more interested in establishing the principle that university foundations are subject to the same public records laws that apply to universities themselves.
Terry Francke, general counsel for Californians Aware, said, “The university could publish the contract on the Web tomorrow, and our suit would go on. It's not idle curiosity. The public should have the ability to look over the shoulder of state officers,” including in their supervision of auxiliary groups.
The CSU Stanislaus Foundation is deeply intertwined with the university, leading Californians Aware to characterize the foundation as a “virtual alter ego” of the university. The foundation’s policies require university officers to review all of its contracts. That requirement is easy to carry out, given that the foundation is housed in the campus’s main administrative building. All but one member of the foundation’s staff and several of the officers on its board are university employees. Hamid Shirvani is the president of both the campus and the foundation.
In spite of this overlap, foundation board president Matt Swanson says public records laws should not apply because no public funds will be used to bring Palin to campus or to pay the undisclosed amount due to her as a speaker’s fee. The CSU Stanislaus Foundation is a separate and non-public entity, he and Shirvani say.
But this nominal separation should not hold. In the realm of college sports, non-university fundraising groups are very clearly considered to be extensions of their affiliated schools, and universities must ensure that these groups abide by the rules. An infraction on the part of a booster group, for example providing an athlete with under-the-table compensation, can cause the school to forfeit games or be suspended from postseason tournaments.
The present laws concerning public records laws and university foundations are murky at best. A 2001 California state appeals court case established that university foundations and auxiliary organizations are not subject to the same disclosure requirements as universities themselves. But, if an auxiliary group’s documents are in the university’s possession, then they must be made public, according to the ruling.
The Californians Aware suit may result in a more thorough interpretation of existing laws that would prevent public university officials from being able to act through auxiliary groups in order to avoid oversight. If the court case does not succeed, Yee, the state senator who made the initial request for the Palin documents, intends to pursue a legislative fix, requiring auxiliary groups and foundations to comply with the same public disclosure laws as their affiliated universities.
Another possible solution, building on the 2001 appeals court decision, would be to require that universities be furnished with copies of all documents and records relating to activities that use university facilities or personnel, even outside normal school hours and operations. The documents would then be in university possession and would be subject to public disclosure, in addition to oversight by university officials. This would put an end to dodges like the one the CSU Stanislaus Foundation tried to pull in connection with the Palin appearance.
The incident highlights an important loophole that should be closed to prevent officials at universities and other public agencies from acting in secret through ostensibly independent entities. This is an issue that ought to be addressed, not only in California, but in every state where citizens have an interest in knowing how their facilities and their tax dollars are used.
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