From the San Francisco Chronicle: University of California executives routinely sit on the boards of companies that do business with the system — a common arrangement around the country that helps connect schools with industry. But they are also lucrative moonlighting deals that raise questions about influence and access, and a Bay Area state senator wants those relationships to end at UC. Sen. Aisha Wahab, D-Hayward, is asking fellow lawmakers to prohibit companies from contracting with UC if any university executive or family member is paid by the business — including sitting on their board of directors — and to extend the ban for at least one year after payment ends. Violations would trigger a 10-year ban on business ties between that company and UC.
...UC’s lobbyist argued at the hearing that such a law would trigger an “immediate operational and instructional crisis” across the university, and that no conflicts of interest occur because rules require executives to recuse themselves when faced with decisions that would personally benefit them. The committee approved the bill by a vote of 4-2 and sent it to the Senate Judiciary Committee. Neither Wahab nor the bill’s sponsor, UC’s largest employee union, Local 3299 of the American Federation of State, County and Municipal Employees, flagged any actual conflicts of interest resulting from the executives’ secondary jobs. They said it was impossible to know if such conflicts exist.
...If the bill becomes law, it “would trigger an immediate operational and instructional crisis across the UC’s 10 campuses and five medical centers,” Tyler Aguilar, a UC lobbyist, told the education committee. The bill defines compensation as anything worth $500 or more. So if a UC executive earned even a $500 dividend from a company doing business with UC, the violation would mean that company could not contract with UC for 10 years, he said. “If we can’t renew our contract with Microsoft, our students and faculty can’t do their work,” he said, offering that vendor as an example. He said board service also helps ensure that products are consistent with UC’s needs.
Aguilar said UC is already governed by a “robust suite” of conflict-of-interest protections. These include state laws that bar employees from having a financial interest in certain activities; UC’s Conflict of Interest Code,which requires officials to disclose private economic interests and recuse themselves from making decisions in which they have a stake; and other UC policies aimed at reining in conflicts. UC also has a specific policy covering executives’ “outside professional activities,” like board service. If the executive receives at least $2,500 for the work, Policy 7707 requires yearly approval from the executive’s manager. Serving on more than one board requires approval from the regents...
The issue is not unique to UC, said [Lynn] Pasquerella, [President] of the American Association of Colleges and Universities. “Universities today operate within a complex ecosystem that increasingly overlaps with industry, health care systems and private-sector partners,” she said. “The concerns that motivate SB 1141 are legitimate,” Pasquerella said. “Closed-door board meetings can heighten the appearance of a conflict of interest even when officials are technically complying with disclosure and recusal rules.” But she warned that excluding UC leaders altogether from corporate boards doing business with the university risks “overcorrecting” the problem...
Full story at https://www.sfchronicle.com/california/article/uc-executive-board-company-22185837.php.
As we have noted in other contexts, the road to actual enactment of a bill and getting it signed by the governor can be a long one. Many bills die in the process. AFSCME reached a wage settlement with UC in March. Other terms are still under negotiation.
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