- In case you are wondering why, amidst all the fee hikes, cutbacks, layoffs and furloughs, construction never seems to stop at University of California campuses, you’ll appreciate the following investigation.
From Spot.Us, community-funded reporting:
“The Investors’ Club: How the University of California Regents Spin Public Money into Private Profit,” an 8-part investigation by Peter Byrne
Experts identify multiple conflicts of interest among an elite group that oversees investments for the University of California.
Last fall, amid an unprecedented state budget crisis, the University of California Board of Regents took extraordinary measures to cut costs and generate revenue. Lecturers were laid off, classes eliminated. The board reduced admissions for in-state students, while increasing the admission of out-of-state students, who pay higher fees than state residents. And to the consternation of tens of thousands of students, undergraduate tuition was raised by 32 percent, with more hikes to come.
It now costs about $30,000 per year to attend the University of California (UC) as an undergraduate, including tuition and expenses. Even with student aid, it’s a sum beyond the means of many students and their families.
While education took a beating, the regents authorized $3 million in bonuses to a handful of top administrators, and reduced the salaries of janitorial staff. The regents approved new construction projects, including a sports stadium. They assured Wall Street bond underwriters that periodic tuition increases would help pay off hundreds of millions of dollars in new construction loans.
Objecting to the tuition increases, UC students, employees, and professors staged demonstrations at regents’ meetings and on campuses across the state. Some protestors accused the regents of “privatizing” the university to benefit industrial corporations and Wall Street investors. While it is true that the university’s ties to corporate and banking interests are many and legion, there is a special kind of privatization taking place behind closed doors.
Our eight-month investigation reveals that some members of the regents’ investment committee, who are also Wall Street heavy-hitters, have modified long-standing investment policies in a way that benefited their own financial holdings. The fallout: multiple conflicts of interest.
Of particular note are the investment deals of UC Regent and financier Richard Blum, husband of US Senator Diane Feinstein, and chairman of board of the world’s largest commercial real estate services firm.
In “Censorship — or something else?” the San Francisco Bay Guardian shares Peter Byrne’s story of how two Bay Area newsrooms dismissed the story of conflict of interest in UC investment deals, including the threat of costly legal action by Richard Blum.