PERSONAL PERSPECTIVE
Lessons not learned at UC
Louis Freedberg


WILL THEY ever learn?

The most depressing aspect of the recent revelations by my Chronicle colleagues Tanya Schevitz and Todd Wallack about the lack of transparency in awarding compensation to top University of California employees is that the university went through a similar nail-pulling experience 13 years ago.

In 1992, the university was thoroughly shaken by disclosures that the Board of Regents, in a series of closed door meetings, had awarded then-UC President David Gardner a "deferred compensation" and retirement package worth close to $1 million.

That included an annual pension of $126,000, adjusted annually for inflation, that Gardner, who chose to retire at age 58, would receive for life.

The revelations came during another period of financial duress for the university. During the three years leading up to the Gardner disclosures, student fees had risen by 85 percent. That was the last time student fees had escalated so rapidly until the most recent round of fee increases -- up 79 percent since 2001.

I covered the ins and outs of the scandal, which included publishing transcripts of a closed-door meeting at which regents schemed how to keep details of Gardner's compensation from the press. (As we later discovered, I and other reporters were waiting right outside the room where the regents brazenly discussed how to keep the information from us).

Revelation upon embarrassing revelation followed -- including how the university bought Gardner's house in Utah in order to facilitate his move to California and ended up losing $111,000 on the deal when it sold it later. Gardner didn't want to live in the president's house in Kensington, so the regents gave him a low-interest loan, plus a generous housing allowance, so he could buy a house in Orinda. It even paid for the property taxes on the Orinda property.

The scandal widened when it turned out that 22 other top officials of the university also received similarly secretive "deferred compensation" packages.

The furor reached its peak when then-Gov. Pete Wilson and Speaker Willie Brown showed up at a tumultuous special meeting of the regents to defend Gardner's severance package.

In his memoir "Earning My Degree," published last year by UC Press, Gardner tried to rewrite history by downplaying the seriousness of the scandal.

He blamed the media for its "unremitting, and unrestrained (mostly inaccurate) news reporting" -- even though he never once requested a correction for any of the dozens of stories I wrote about the furor.

In his memoirs, he paid me a backhanded compliment by describing me as "an intelligent and accomplished journalist." But, in a conspiratorial flight of fancy, he concocts a theory that has no basis in fact by suggesting my reporting was driven or manipulated by Ralph Nader, simply because I knew his sister Laura, an anthropology professor at UC Berkeley.

In his 432-page memoir, Gardner leaves out any mention of a lacerating 1992 report commissioned by the university by retired Legislative Analyst A. Alan Post, at the time perhaps the most respected fiscal analyst in California.

"The manner in which compensation issues have been presented, considered and approved during the last 10 years has been seriously deficient," Post concluded. "The imposition of secrecy (regarding executive compensation) appears to have become commonplace, becoming a matter of convenience rather than principle."

Gardner's memoir also neatly leaves out any reference to a 178-page audit by the state's auditor general, also in 1992, expressing concerns about questionable practices by UC officials, including first-class air travel, using university money to pay for a wedding reception and making charitable contributions using UC funds with no clear benefit for the university.

The auditor rejected the argument that some of these perks were paid for from "private funds." "Because UC exists as a constitutionally based public trust, it is an entity of the state," the auditor wrote. "As such, all of UC's funds are state funds and should be expended with similar regard for UC's responsibilities as a public trust."

After Gardner left, new UC president Jack Peltason introduced a range of reforms that promised more openness in disclosing executive compensation. The university, for example, pledged to provide full details of executive compensation to the Legislature and involve UC faculty in helping to set administrative salaries.

So what happened? Gardner went on to become president of the Hewlett Foundation and chairman of the J. Paul Getty Trust. Over time, the scandal faded in memory, and Gardner was lionized by his peers. A smart new addition to the Doe Library on the UC Berkeley campus was named after him.

The transparency promised by the university gradually become more opaque, making a mockery of the "reforms" adopted by the regents -- with the unfortunate results we have seen over the past weeks. As Jeremiah Hallisey, the retired regent who was Gardner's most persistent critic at the time, reflected this week, "If they have to pay these salaries, let's justify it in a public meeting, and let's have transparency."

It's pretty simple. A public university has no choice but to do its business in public.

That is a truism that the University of California has yet to fully embrace. It should not take a lashing from the public and the press every dozen years or so to force it to do so.