Category Archives: Freedom of Information Act

For years, attempts to require the University of Connecticut Foundation to be more open about how it raises and spends millions of dollars each year have fizzled in the legislature.

But this year, new efforts to shed more light on the foundation’s operations appear to have greater momentum. Foundation officials, however, appear as determined as ever to keep their books closed.

“UConn has its boosters,” said state Rep. Roberta Willis, a Salisbury Democrat and co-chairwoman of the General Assembly’s higher education committee. “This year, I’m hearing from more critics than I’m hearing from boosters.”

Among the reasons: The foundation, a private, nonprofit fundraising arm for the university, drew widespread criticism for controversial expenditures last year, including $251,250 paid to Hillary Clinton for a lecture in April and its agreement to contribute $300,000 toward a 20 percent increase in UConn President Susan Herbst’s compensation.

Willis said such expenditures raise the question: “How much largesse is there that could be used to offset costs? You have all this money — why aren’t you giving more to help with costs, so that then tuition doesn’t have to go up as much?”

This year’s debate over whether the foundation should be subject to closer public scrutiny began Thursday when the higher education committee raised a bill called “an act requiring transparency of expenditures for higher education foundations” of public colleges and universities. Under Connecticut state law, those higher education foundations are exempt from the Freedom of Information Act.

Willis said the committee, which has “mixed feelings” on the subject, will hold a public hearing on the issue before it decides exactly what should be included in the bill. Last week, those opinions covered a wide range.

Rep. Toni E. Walker, D-New Haven, said she wants the foundation to be open, with information available on donors and expenditures. “It’s not to be intrusive, it’s just for clarity,” said Walker who also is co-chairwoman of the Appropriations Committee.

Rep. Tim Ackert, R-Coventry, on the other hand, said that the foundation has been successful and that there is no need to change the law.

In the meantime, foundation representatives have been meeting with legislators to voice their opposition to any bill that would force them to open more of their operation to public inspection. They have also been promoting the accomplishments of the organization — new gifts and commitments went up from $63 million in 2013 to $81 million in 2014.

Chasing Away Donors?

Joshua R. Newton, the foundation’s $350,000-a-year president and CEO, said he has had “multiple conversations with donors” who have told him they are nervous about any legislation that might result in wider public access to the organization’s records.

“My stance, as it always has been, … is in opposition to anything that might cause our donors to pull back,” Newton said.

While many donors are happy to have their names publicized, Newton said there are those who don’t feel that way. In addition, some donors are concerned that if all the foundation’s expenditures are made public, it will be a step toward treating private donations like public money. If that happens, the fear is that legislators might cut back on state support for the university.

“Our donors are very concerned that their money will replace state money,” Newton said, “and then their gift will have no impact on the institution.” If donors thought that were occurring, Newton said, “they absolutely would stop giving.”

Besides, Newton argued, the foundation is already “very transparent.” It files an annual report to donors, has an independent audit that’s available to the public, and financial documents that are filed with the Internal Revenue Service and open for inspection.”I’m not trying to hide anything,” Newton said. “We’ve got accountability to the donor, accountability to the external audit, as well as the internal audit, accountability to the board of directors, accountability to the attorney general. … I’m confused about the conversation about transparency and accountability because I think it’s strong already.”

But clearly, many legislators believe that transparency is insufficient: At least five bills have been filed this session that are aimed at greater public access to foundation operations. In at least a couple of the cases, the bills seek to repeal a state statute passed in 1989 that exempts public university foundations from the state’s Freedom of Information Act.

One bill filed by Rep. Gail Lavielle, R-Wilton, and another filed jointly by Sen. Leonard Fasano, R-North Haven, and Sen. Kevin Witkos, R-Canton, require the foundation to disclose expenditures, but not the names of donors.

The bill filed by Fasano and Witkos goes further, calling for the foundation to be subject to the Freedom of Information Act and prescribing how the foundation uses its donations, restricting the use for scholarships and direct financial aid and for programs and services related to the university and its campuses. The bill also would prohibit the foundation from receiving any funds from UConn.

Foundation officials say that bill, as it is written, would kill the organization because it would eliminate the $8 million the foundation receives from UConn for operational costs and ban the group from spending any of the money it raises on operations.

Sen. Michael McLachlan, R-Danbury, has filed a bill calling for the foundation to be subject to the state’s Freedom of Information Act; a similar bill he filed last year never made it out of committee.

“When you commingle taxpayer funds and privately raised funds, you have to be subject to FOI because so is every other taxpayer dollar subject to Freedom of Information,” McLachlan said.

State Reps. Christie Carpino, R-Cromwell, and Rick Lopes, D-New Britain, filed separate bills that would require the state auditors to audit the foundation.

Lopes’s bill prohibits “any entity other than the Auditors of Public Accounts” from performing an audit of a foundation established by any public institution of higher education. It also requires the foundation to cover the cost of the audit.

The UConn Foundation now has an annual audit performed by a private accounting firm, but Lopes said if it were done by the state auditors, it would “improve accountability and save money.”

‘You Can’t Offload Accountability’

How much additional disclosure bills might require may turn partly on the question of how closely aligned the foundation is to the university.

“Not to say we think there is anything bad going on with the foundation, but when its mission is so closely tied to the university’s mission, to promote the educational objectives of the university … then transparency is generally a good thing,” said Colleen Murphy, executive director of the Connecticut Freedom of Information Commission. The agency submitted testimony last year in favor of McLachlan’s bill.

Frank LoMonte, executive director of the Student Press Law Center and an expert on the First Amendment, said that nationally “it’s really a mixed bag” as to how open public university foundations are.

“The common denominator seems to be, you are not going to find out very much at all about the donors,” LoMonte said. “You can find out a lot more about how the money is being spent than you can about who is giving it.”

But LoMonte maintains that it’s important to know the identity of the donors, as well, partly to determine who might be attempting to buy influence with the university.

The best argument for why a foundation should be subject to open government laws is if “they are doing something that the public university would have to do if the foundation didn’t exist,” LoMonte said. “You can’t offload accountability by putting on the hat of a private corporation.”

LoMonte said his organization is “an advocate for open government in colleges and schools.”

“Foundations, athletic associations and any other private, nonprofit arm of a public university should be fully covered by state open records and open meetings law. It’s a meaningless distinction to say a vital function of a public university can somehow magically be transformed into a private corporation.”And the colleges are very upfront. The reason they incorporate is to avoid disclosure. That’s the main reason they do it. … There’s only one reason to incorporate these auxiliary institutions, and that’s to avoid public disclosure.”

According to a study by the Office of Legislative Research, Connecticut is the only state that specifically exempts public university foundations from the state’s Freedom of Information Act.

In a report issued in September, the research office said that FOI laws in other New England states “generally do not address university foundations specifically, but it is unclear whether the lack of a specific exemption make the foundations subject to FOI laws.”

The report says that some of the New England states’ laws address specific foundation records. For example, the report says, Massachusetts and Rhode Island “specifically restrict public access to the identities of donors who wish to remain anonymous.”

The report also noted that the UConn Foundation raises substantially more money than the other foundations at New England flagship universities. The University of Vermont Foundation came the closest, with $55.2 million raised in the 2014 fiscal year, almost $26 million less than what was raised by the UConn Foundation. The University of Massachusetts Foundation raised the next highest amount, $32 million in the 2013 fiscal year.

Mitchell Pearlman, who retired in 2005 after 30 years as executive director of Connecticut’s Freedom of Information Commission, said he argued against exempting public university foundations in the late 1980s and urged greater transparency for the foundation over the years.

But, he said, “as long as UConn basketball keeps winning, no way the legislature is going to change it. It all kind of coincided. There were so many alumni in the legislature the pressure was just too great.

“We all like to see [the foundation] successful, but we’d also like to see some accountability.”

The President’s House

Newton offered explanations for recent foundation expenses that have raised the most questions.

The money spent on Hillary Clinton’s lecture on April 23 was from a donor who wanted to fund a series of five lectures over five years, he said.

Regarding the foundation’s contributions to Herbst’s salary, Newton said the chairman of the university’s board of trustees, Larry McHugh, asked if the foundation could contribute more money. So the foundation boosted its support from $145,000 to $300,000 per year, bringing Herbst’s total compensation to more than $758,000 in 2015.

“It was a [foundation] board decision,” Newton said. Herbst has been a strong leader and a good fundraiser, Newton said. “If Susan were to leave, the impact on fundraising would be significant.

“People give to people, people give to vision, people give to leadership,” Newton said. “The vision Susan put forward, the excitement she’s created on campus around the state and the country. … That’s part of what is drawing in additional philanthropy.”

Another controversial expenditure was the 2013 purchase, for $660,000, of a house in Hartford’s West End for UConn’s president. Newton said that money was provided by 14 donors who specifically earmarked the money for that purpose. He said the money was donated years before Herbst arrived on campus and wasn’t used until Newton arrived and the donors asked him why the money was never spent.

The house is meant as a place to entertain donors and where Herbst can stay when she has business nearby. Newton said it’s also been a good spot for her to meet with faculty from the UConn Law School, located a few blocks away, and with staff and faculty from the UConn Health Center in Farmington.

“I can certainly tell you we’ve had dozens of dinner parties there … for that kind of intimate experience, for those who gave the most generously, to thank them,” Newton said. “This is what great universities do and it was one of the things we were missing.”

Finding out the cost of those dinner parties is the kind of thing the public can’t do now. While plenty of information is available through the foundation’s tax documents and reports, the figures tend to be large aggregate numbers.

For instance, it’s easy to find out that the foundation provided $49.4 million in university support last year, including $8.8 million for scholarships and fellowships; $20.6 million for the UConn Basketball Champions Center; $8.9 million for faculty and staff compensation; and $2.4 million on fundraising. But unless the foundation chooses to disclose it, you won’t get the financial details on an elegant dinner party for donors or on a trip for donors to a UConn sports event.

Newton said he fears if that level of detail were made public, “I think the general citizen is not going to understand that. … To me, it creates more confusion and really will hinder our ability to do what we do.”