Fixing the Foundation - Page 2

City College entities battle over fiscal oversight in the wake of a money laundering scandal

Milton Marks wants to retain some oversight of fundraising activities conductyed by the Foundation.
Guardian photo by Charles Russo

Bagatelos said the foundation will still be subject to monthly reviews and regular audits as outlined by the laws governing all nonprofit organizations, but the district may not have access to donor and fundraising information.

Hao Huntsman, president of the Academic Senate, which represents the college faculty, said this lack of transparency would hurt the ability of both entities to rebuild their reputations.

"The foundation raises money using the City College name. We have a lot of investment in that name and are very sensitive to how that name is being used and the kinds of places we are soliciting money from," he said. "We don't want to be taking money from firearm manufacturers and tobacco companies, for example."

But Rizzo explained that the college has no control over where the foundation gets its donations. "They could collect money from PG&E or Chevron and give scholarships and the district would have no say," he said.

This leaves the college wide open to efforts by corporations to make donations that direct the course of research at the college, a phenomenon that has blighted many a public school over the years. "We are concerned that there won't be the same degree of knowing," Huntsman said. "If the college doesn't have a say in the control of that money, it could be used for something other than what it was intended for."

As it stands, the foundation primarily raises money for scholarships. Rizzo would also like to see the foundation give the college from $3 million to $5 million annually to help cover operational costs and close the budget deficit. "It's great to have scholarships, but if we don't have classes the scholarship can't mean much," he said.

Rizzo and Huntsman also want the new agreement to require the foundation to turn over upwards of $3 million raised by faculty members independently of the foundation.

Rick Knee, a member of the San Francisco Sunshine Ordinance Task Force who has tried for years to bring City College under its oversight, said the potential agreement raises concerns about the foundation's ability to wield unprecedented political clout.

"It might enable them to do some arm twisting," Knee said. "If the foundation wants to make a clean break from the Day era, they should give the current Board of Trustees a chance to make their case and demonstrate that they're not Phil Day."

Peter Scheer, executive director of the First Amendment Coalition, said that an agreement in which there was both independence and transparency for the two parties would strike an appropriate balance.

"The irony here is that you have the college and the foundation saying the exact same thing," he said. "The college is worried that unless they have control the foundation will threaten its integrity, and the foundation is saying that without autonomy the school will tarnish its name and make it harder for them to get donors. They are both right in light of what happened with Day."

Lawyers on both sides agree that, as a nonprofit, the foundation has the right to control its own assets. But that doesn't mean they should keep the district in the dark, say the trustees, who want the foundation to open its books to the district, if only to ensure a modicum of public accountability.

Rizzo, who was on the negotiating team, told us that the agreement currently maintains donor secrecy but allows for some financial oversight by the district, including monthly audit reports and notification of instances when district funds enter foundation accounts. "They'll have to report some things to the Board of Trustees, then the district will make them public," Rizzo said. "But they do not want to report donor names and that will be an item of discussion." *

Steven T. Jones contributed to this report.