UC Berkeley Web Feature

Back at the Capitol, top UC officials insist they mean business
But state lawmakers, in their second hearing on executive-pay practices, wonder if UCOP and the regents have the right stuff to 'turn this ship around'

By Barry Bergman, Public Affairs | 23 February 2006

SACRAMENTO – Top UC officials, hoping to tamp down the fallout over revelations about executive compensation, testified at a legislative hearing on Wednesday in a sequel that might have been titled "Who's Minding the Store?" - the store being the $19 billion University of California.

Two weeks after UC President Robert Dynes promised the state Senate Education Committee he would revamp the system's culture to embrace "public responsibility and public accountability," Dynes returned to the Capitol with Gerald Parsky, chair of the board of regents, who agreed that the "organizational structure and business practices of the Office of the President need to be enhanced."

Also on hand for the sometimes-testy 3-hour session were regent Joanne Kozberg and former Assembly Speaker Robert Hertzberg, co-chairs of a task force established by Dynes to review executive-pay practices, and regent Judith Hopkinson, who heads up a new committee on compensation.

As in the first hearing, UC representatives acknowledged problems with the university's business practices, and assured legislators that steps were being taken to remedy them. Parsky said regents had learned only "after the fact" of controversial severance deals made with Marcie Greenwood, the former UC provost who resigned her executive post after the San Francisco Chronicle made inquiries about her role in creating a job for a business partner, and Celeste Rose, a former vice chancellor at Davis who remains on the UC payroll but has no job responsibilities.

Parsky pointed to a set of principles adopted by the regents in 1992 to guide executive compensation, but acknowledged that "the letter and the spirit" of those guidelines had not been followed "in every instance."

"We relied on voluntary compliance," Parsky said. "We're not going to rely on voluntary compliance going forward."

Dynes went further, admitting that "exceptions to policy have become the norm," and declaring: "Our business practices are broken. Our systems are broken."

Both men promised to bring more business acumen to the Office of the President, as well as to the offices of the system's 10 chancellors. Added Parsky, "We will hold people accountable. If that means firing people, we will."

But senators, keenly aware that a previous generation of UC officials had vowed to fix much the same problems more than a decade ago, seemed intent on finding tools of their own. Several suggested a "hammer."

It was Sen. Abel Maldonado (R) who first broke out that particular metaphor, saying he'd introduced a bill to cut UC's state funding if it failed to report as required to the California Postsecondary Education Commission, and asking Parsky if he would support it. (Parsky demurred.) "I'm not here to legislate what the regents ought to be doing," Maldonado insisted. "We're just looking for disclosure."

But Maldonado also complained that the state's taxpayers were not getting "world-class leadership" from UC's Office of the President, and peppered Dynes with a volley of prosecution-style questions, ending with a query about what grade he would give himself as president.

That's when Sen. Jackie Speier (D) jumped in, telling Maldonado, "I understand your zeal" in questioning Dynes, but objecting that "I'm not prepared to sit around here and flog him for the next 20 minutes."

"I'm just frustrated, sir," explained Maldonado, noting that troubling information about UC's pay practices had been disclosed by the press, and not by the UC system directly.

Speier expressed frustrations as well, telling Parsky, "My question to you is, where does the buck stop at the University of California?" Noting that the regents serve voluntarily and without pay - and that most, like Parsky, have full-time professional careers - she wondered if the board, as presently constituted, is up to the job of riding herd on the massive UC system and ensuring that UCOP complies with existing principles and policies.

Speier ticked off a list of state boards and commissions whose members receive salaries for their work, and "have, frankly, far less responsibility" than the UC regents. "I look at this $19 billion industry that you are responsible for, and the material that you receive from meeting to meeting . and it makes me begin to think, considering what's at stake, considering what's been uncovered," that it might take a paid board to "commit the kind of time that I believe is necessary to turn this ship around."

Parsky responded that "we have paid executives" to handle the daily business of running the university. "If they're not doing their jobs," he said, "then they need to be disciplined."

Sen. Joe Simitian (D) suggested the possibility of "third-party staff assistance" for the regents' newly established task force on compensation, so that the regents "aren't in the position of relying on the very institution - that being the UC system - which they are then obliged to govern."

Sen. Elaine Alquist (D), saying "the crown jewel really is tarnished," voiced sympathy in principle for Maldonado's legislation - which she said she hadn't yet seen - and reflected on the larger question of what the Legislature can do to make UC more accountable. "How do you put in place something that changes the philosophy of the UC system?" she asked.

Alquist and Parsky disagreed over whether the regents had owned up, as Dynes had, to their responsibility to ensure full compliance with existing policies. "What I have not heard is that the board of regents is accountable," she said, demanding assurances that "the University of California understands that it is not above the law."

When she appeared less than satisfied by Parsky's reply that "we do believe we are accountable," it was his turn to voice frustration. "I really don't want to engage in an open debate," he told her.

Transparency and compliance aside, several panel members wondered whether UC really needs to pay what critics have called exorbitant salaries to top administrators, despite UC officials' insistence that such compensation is essential to keep the system competitive with top-ranked universities.

Sen. Jack Scott (D), the committee chair, mused that "somebody might be willing to take a $50,000 pay cut" to come to the University of California, and suggested telling recruits, "This is what we pay, these are the perks," instead of getting into "a matching game" with better-funded institutions. "You can get whipsawed pretty fast," he said.

During a 30-minute public-comment period, the panel also heard from about a dozen UC staffers, many from nearby Berkeley and Davis, and many of them angry at what they regard as a double standard in the treatment of top-level executives and lower-paid staff.

"Students and workers are suffering" as a result of the university's business practices, said Amatullah Alaji-Sabrie, who works at Boalt Hall and served as chief negotiator for the Coalition of University Employees in recent bargaining talks. "I think that the regents need to be replaced, because they have failed the public trust."

Jim Stockinger, a sociology lecturer at Berkeley, read from a letter written by the UC Berkeley Labor Coalition, which comprises four campus unions. "As organizations that represent both faculty and staff at UC, we are all too familiar with the UC administration's habit of concealing information, bargaining in bad faith, and misdirecting or failing to account for monies that the Legislature has given it, especially for staff salary increases," the letter read. "We therefore urge you to expand your oversight to consider the entire range of UC compensation practices, not just those that affect employees at the top of the system."

Citing UC's motto, "Fiat Lux," the letter concluded by suggesting the committee members make that their own motto as well.

It was Sen. Gloria Romero (D), though, who articulated what might be the panel's true rallying cry. "We are going to be watching you," she warned Dynes, "very carefully."