TRANSPARENCY TUESDAY: Are regents mixing public duty with private profit?



Almost every state has a board of regents (sometimes called a board of governors) that enacts rules and coordinates policy for its public universities. Many also have campus-level boards of trustees (or regents) overseeing each institution as well.

It's pretty nice work -- you give lots of commencement speeches, get to sit in premium football boxes, and if you stick around long enough, someone will name a library after you. Although membership on these boards carries heavy-duty policy-making authority, there's no formal prerequisite to be an authority on legal or educational issues (or, for that matter, to have a college degree). But there is one credential that is nearly indispensable: political juice.

While a few states elect their regents, in most states the positions are appointed by the governor. Because of perks and prestige, regents seats are among the most sought-after political appointments, and they frequently go to politically connected donors regardless of higher-ed expertise.

A 2002 Wisconsin study showed that 12 of 17 members of that state's Board of Regents were substantial campaign contributors to the then-governor. A 2010 report from the government watchdog group Texans for Public Justice found that Gov. Rick Perry received an average of $113,000 in donations from his appointees to the board of the Texas A&M System, with four giving in excess of $200,000.

How your board of regents members got their positions -- and how they're using them -- is a matter of public concern that public records can help unlock.

Two sets of records are pertinent: (1) campaign contribution records and (2) personal financial disclosure forms. By law, campaign committees must publicly disclose the source of donations. Those reports typically are kept at the Secretary of State's office, and increasingly are available online. Donations will be reported in alphabetical or chronological order, and the reports generally are not difficult to understand. They're worth a look.

To do a thorough reporting job, a public-records Jedi master will look not just at the governor's campaign disclosure reports, but at those of the governor's state party and of any political-action committees headed by the governor. (These are especially common for governors with further political ambitions, such as Minnesota Gov. Tim Pawlenty's "Freedom First" PAC.)

Most states require regents and trustees to file personal financial statements when they are appointed and annually thereafter. To see an example of such a disclosure law, look at Alaska's, which requires (among other things) an annual statement detailing the source of any income greater than $1,000, the identity of any investment holdings valued at more than $1,000, and any contractual dealings with the state by the appointee's businesses or immediate family.

While these reports vary in their level of detail, all of them should at least give some indication of the major business holdings of the board members, and whether the board members, their businesses or their families are in a position to benefit from doing business with the university system. Some well-organized states have started making these disclosures available online as well; for an example, check out New Mexico's here.

Using financial disclosures, a journalist working with the nonprofit Spot.us distributed several stories during 2010 raising questions about the business dealings of University of California System regents, and whether members of the UC regents' investment committee were using their positions to steer public dollars into investments from which the regents stood to profit personally.

The stories focused on the activities of board member Richard Blum, a financier (and husband of U.S. Sen. Dianne Feinstein, D-Calif.). Based on reports Blum filed with the state of California, as well as corporate disclosure forms filed with the U.S. Securities and Exchange Commission, the stories concluded that Blum had benefited from a switch to a more aggressive UC investment strategy that he was involved in enacting. Specifically, the stories found that Blum -- either directly or through investment partnerships -- had a financial stake in multiple private-equity deals (investments that are not publicly traded on stock exchanges) into which the UC system poured more than $700 million.

Not every plunge into disclosure reports will yield such rich results. But, since public officials sometimes cut corners on their reporting obligations (or don't file at all), it's important for them to know that someone is watching.

Tagged: newsgathering, public records, Transparency Tuesday