May 18, 2006

Mea Culpa, Twice Over

Amid calls for his resignation by several California lawmakers and enraged members of the public, Robert C. Dynes, president of the University of California system, told the university’s Board of Regents Wednesday that he had failed to adequately report to them compensation of top university officials and promised “a sea change” in the way his office operates.

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Months of audits and a task force report on financial accountability in the U.C. system revealed that dozens of high-level hires received hidden compensation over the past decade that were awarded without approval by regents, as required by policy. The audits came following a series of investigative reports by the San Francisco Chronicle.

A university audit released Wednesday showed that more than 100 senior managers received unreported pay or benefits. PricewaterhouseCoopers revealed yet another audit which added significantly to the number of overall policy violations, including cases of unwarranted sabbaticals, large raises and extraordinary relocation funds.

Dynes, a former chancellor at the University of California at San Diego, is on shaky ground with some board members. Heading into Wednesday’s meeting at the University of California at San Francisco, some thought the president faced the possibility of losing his job — though nothing during the proceedings indicated that would happen. Instead, Dynes had his chance to publicly explain what went wrong and how he plans to fix it.

“There were a variety of reasons we didn’t comply, most of them were ignorance,” Dynes told the regents. “There was paranoia about not leaking candidates that resulted in too much secrecy and not enough disclosure.”

Dynes said he has spent so much time thinking about the big-picture issues that he has neglected to properly monitor day-to-day matters. The president defended benefits given under his watch to top university officials, saying the California system must remain competitive with hard-charging private and public institutions in the state. Often times, Dynes said, revealing that a high-profile person is a candidate for a chancellor job hurts the candidate’s ability to function in his or her current position.

Gerald L. Parsky, chairman of the regents, questioned Dynes on his explanation. “How are we operating here?” Parsky asked. “That sounds more like the government than a university. I don’t see the link between the intense competition for talent and secrecy.”

Dynes promised to change the “culture of secrecy” inside the president’s office. In a proposal sent to board members, he agreed to increase communication with the chairman of the board and the chair of the compensation committee in order to be in line with the board’s 1992-93 principles on executive compensation. “We must regain public confidence in us,” Dynes said. “We need to communicate more openly and work in a very different way.”

Parsky reminded the president that calling one or two regents about compensation matters doesn’t amount to transparency, and that Dynes’s office needs to demonstrate marked changes.

Several regents also acknowledged that the board must do a better job of overseeing the president’s office. “Lots of information fails to come before us. Some of the regents have looked the other way,” said one regent, John J. Moores. “Regents have a history of not asking a whole lot. This board ought to be embarrassed about what it has failed to do.”

Board members agreed to a number of recommendations set forth by the Task Force on UC Compensation, Accountability, and Transparency, including the creation of a template that would help allow for a centralization of information about compensation arrangements. The board is also considering adding executive positions and looking at a restructuring. Dynes spoke to board members about individual cases of compensation in closed-door sessions.

Moores said the compensation issue is “immaterial” and is just one indication of a greater failure in the U.C. system. Regent Norman J. Pattiz deflected criticism away from Dynes by saying, “This isn’t about hanging anyone. This is about taking information from a wide variety of sources and doing something about it.”

Hours earlier, during a public comment session, the tone was much more hostile. State Senate Majority Leader Gloria Romero riled up an already vociferous crowd by announcing: “I am calling for the resignation of President Dynes. I call upon regents to act decisively to act on the matter before you. Don’t go behind doors. Raise this issue in full public sunshine.”

Two other state senators also reiterated their earlier call for Dynes to quit. Numerous guest speakers also criticized the president for his role in what they deemed improper management. A group in the audience began the chant: “Hands off our pensions,” and some speakers said they are upset about the growing disparity between the salaries of employees and senior administrators in the UC system.

The issue struck a nerve with many Californians after a PricewaterhouseCoopers audit, commissioned by the board, showed that the number of administrators and faculty making more than $300,000 a year had skyrocketed over the past few years. In other cases, officials received massive bonuses or fringe benefits without authorization from regents. Some have vilified Dynes for this, but others said the practice of secretive compensation pre-dates the current president.

In November, M.R.C. Greenwood, provost of the University of California system, quit amid an investigation into her role in improperly hiring two officials — one a business partner, the other her son.

The board meeting continues today. Further action on how to respond to the reports is expected to be announced when the board meets in July.

— Elia Powers

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