Mar 21


Opening the books at the UB Foundation

By Luke Hammill

The UB Foundation and other foundations and non-profits associated with SUNY schools operate in some ways similar to authorities in state government. In UB’s case, its foundation manages university real estate, grants scholarships and supplements the pay of hundreds of employees.

But unlike state authorities, SUNY-related foundations operate behind closed doors. Their meetings are not open to the public and their records are not subject to disclosure under the state Freedom of Information Law.

The opaqueness has come under criticism in the face of press reports that raised possible conflicts of interest by UB Foundation board members and the propriety of at least two political contributions.

In response, a bi-partisan bill working its way through the state Senate and Assembly would subject SUNY-affiliated foundations and non-profits to FOI Law. The bill would also require the SUNY-related foundations to adopt conflict of interest policies.

UB officials declined comment on the bill, and the UB Foundation’s executive director said the organization has yet to take a stance. But the Business Council of New York State – a prominent business lobbying organization that UB pays $5,000 in annual dues to – opposes the bill, contending it would require disclosure of trade secrets and otherwise damage the ability of foundations to do business.

“Rather than a ‘welcome mat’ to opening (research and development) to collaborative investments, this bill sends a very strong ‘steer clear’ signal to what are very complex business-higher education relationships,” reads a statement on the Business Council’s website.

But Robert Freeman, executive director of the state Committee on Open Government, said the FOI Law protects trade secrets and other confidential business information from disclosure.

“The law provides the protection that’s needed,” Freeman said. “I don’t believe (the Business Council’s statement) clearly recognizes the ability to deny access to records that is provided in the Freedom of Information Law.”

Many members of the UB faculty support the bill.

“There’s absolutely no reason why the UB Foundation shouldn’t have the same disclosure as the rest of the university,” said Professor of Economics Paul Zarembka, a member of UB’s Faculty Senate.

Chartered in 1962 by the state when then-private UB joined SUNY, the UB Foundation is an “independent” not-for-profit corporation that controls UB’s endowment, valued at $685.2 million last year.

Other school-specific foundations have control over much smaller amounts of money. The Stony Brook Foundation, for example, manages an endowment of $110 million.

The UB Foundation manages gifts and facilitates public-private partnerships for UB, among many other services. Some of its spending has come under questioning.

For example:

  • The Spectrum, the university’s independent student newspaper, reported in October that one of the non-profits operated under the foundation’s umbrella made two contributions worth $2,560 to the campaign of Erie County Executive Chris Collins in 2010. The Spectrum reported the contributions violated federal tax laws governing how tax-exempt foundations can spend their money. UB officials said the money was returned and contended they did not realize the purchase of the two tickets to a Collins campaign event were considered political contributions.
  • The New York State Commission of Public Integrity reported in 2008 that more than 40 university employees were being paid by the foundation to function as UB 2020 lobbyists. The compensation was in addition to their state salaries.
  • Artvoice reported last March that the foundation spends seven times more money compensating its employees, many of whom are also state-paid UB employees, than it does providing scholarships to students.
  • Artvoice also reported that the foundation paid or supplemented the salaries of some 1,400 university and foundation employees. Undated information foundation attorneys provided Artvoice showed more than 260 people were paid at least $30,000 by the foundation, including 17 who earned over $100,000.

The UB Foundation has steadfastly defended its right to operate behind closed doors. Its meetings are usually closed to the public and the foundation fought, and won, a lawsuit filed several years ago by Artvoice, Buffalo’s alternative newsweekly, to obtain financial data under the FOI Law.

Disclosure rules would change under the bills under consideration in the Legislature.

Both the Assembly and Senate versions of the bill have bipartisan support and are making their way through committee.

Primary sponsors include the chairs of the Higher Education Committee in both the Senate and Assembly, Sen. Kenneth LaValle, a Long Island Republican, and Assembly Member Deborah Glick, a Manhattan Democrat, respectively. The bill has 11 co-sponsors hailing from both sides of the aisle. All are from downstate; no members of Western New York’s legislative delegation has signed on.

Rob Lillpopp, director of communications for the Business Council, said members of his organization aren’t sure the system is broken and thus in need of repair. He added there are already transparency measures in place for university foundations, such as the disclosure of IRS 990 tax forms.

However, those IRS reports disclose only a fraction of the information that would be subject to release under the FOI Law.

“I think that the SUNY Research Foundation and the University at Buffalo, in their dealings, are always trying to have transparency wherever they can,” Lillpopp said.

“At the same time, they have to balance that with the need to be able to do business with businesses and help create jobs – not only within the university itself, but also within the companies who work with them.”

UB Law School Professor Martha McCluskey, a member of  the Faculty Senate’s executive committee, outlined in an e-mail why she thinks the bill is necessary.

“Many UB Foundation trustees and directors have private business interests in the university and its foundation funds, and concerns about conflicts of interest have been the subject of news reports in the past,” she wrote.

“Without transparency, representation, or public oversight, what ensures that the UB Foundation is effectively fulfilling its purpose of supporting UB?”

Related stories

    None Found