The Question of the Regents

Catherine Liu’s call to remove Richard Blum from the Board of Regents points to structural questions that confront anyone concerned with reforming the University. As Catherine reminds us, Blum’s companies hold nearly a billion dollars worth of stock in for-profit, online educational companies that, reportedly, have received millions of dollars of UC investments. Of course, as no one needs reminding, President Yudof, Dean Edley, and Regent Gould are all pushing for an expansion of online education—an act that would establish greater legitimacy for the for-profit educational sector at the moment of rising scrutiny of its business practices, educational quality, and reliance on public funds. Indeed, as Catherine Cole has recently pointed out, rising student fees and an accelerated UC commitment to the notion of online education cannot but help legitimate a for-profit education sector that, while dependent on large amounts of public funds in effect diverted from public universities, has been subject to little oversight of its educational commitments or quality.

Given the lack of a clear business model for UCOP’s proposed expansion into online education, and the general opacity of UC’s investment decision-making process, the relationship between Blum’s holding, UCs investments, and the UCOP’s online frenzy call out for some public explanation. At the very least Regent Blum needs to respond to the reports and explain why his dual role does not constitute a conflict of interest.

But the issue goes beyond Richard Blum. As Bob Samuels has argued UC lost 23 Billion dollars in investments over the past several years, (investments largely related to UCRP) and continues to accrue debt far beyond its actual revenues. These losses and debts put the future of UC at risk. Indeed, the restart of employer contributions for UCRP will cause funds to be taken out of divisions and departments and, without resumption of state responsibility for UCRP contributions those withdrawals will become increasingly severe in the future. UCOP (or at least its leadership) have blamed the contribution holiday and the recent collapse of the stock market for these problems. They have refused to examine the role of their own investment decisions and their reliance on money managers for the disastrous transformation of UCRP’s condition. Again, a serious and open examination of these investments and the way that UCOP has relied on out-of-house money managers is the least that is owed to the University community.

These issues point to the continued lack of accountability—on the part of either the President’s office or the Board Regents—to the University and its citizens. The Board and the President treat the rest of the University—faculty, staff, students—as interlopers in their business. They are happy to hear our voices when we speak in praise but push them aside when questions are asked. But the consistent failures on the part of the Board to protect state funding, their apparent commitment to risky financial investment strategies, and their seeming unwillingness to take seriously what at the least appear to be disturbing conflicts of interest, call out for reform.

Regent Blum owes us an accounting: the University rests on open debate of freely disclosed evidence, he needs to adhere to these standards in disclosing and explaining investments that on their face seem to show a lack of confidence in, and support for, the public sector he helps lead but in whose competition he invests. The Committee on Investments owes us an audit. The Board of Regents and President Yudof owe us greater responsiveness, openness, and most importantly a revamped organization that represents the University rather than governs it from afar.