10 Reasons Why Cal State Chair Carter Must Go

by CalWatchdog Staff | February 23, 2012 8:11 am

[1]Commentary

FEB. 23, 2012

By JOHN HRABE

Herbert Carter’s reconfirmation as the chairman of the California State University Board of Trustees could be taken up by the State Senate as early as today, Feb. 23. Cal State University lobbyists have been in and out of state Senate offices all week in a desperate attempt to secure two Republican votes for the embattled chair. The lobbying offensive hasn’t been very successful. On Wednesday, February 22, Senator Mark Wyland[2], R-Escondido, became the third Senator to formally oppose Carter’s confirmation.

Claudia Keith, Assistant Vice Chancellor of Public Affairs at California State University, recently pointed out to CalWatchDog.com that legislators aren’t the best educated bunch. “I doubt any legislator has to have a Ph.D. or Ed.D., 20-plus years of experience, and are required to raise a million dollars a week toward a fundraising campaign for an institution,” she wrote via email. Here at CalWatchDog.com, we don’t necessarily share Ms. Keith’s views about legislators’ intellects. Nevertheless, we’ve made it easier for legislators to understand Carter’s failed record by assembling the “Top Ten Reasons Why Carter Must Go.”

1. 2011 Cal State Executive Compensation Scandal: College Execs Make More than Private Sector.

Under Carter’s tenure as chair, Cal State University presidents make an average base salary[3] of more than $300,000 per year. That’s more than the base salary for private-sector executives, including Facebook COO Sheryl Sandberg. Just like the private sector, CSU executives are entitled to additional perks and benefits. Every Cal State president receives up to $60,000 per year in a housing allowance and $12,000 per year for a car. According to data from the Cal State University Chancellor’s office, the average Cal State president receives a total compensation package worth $372,000 per year. These outrageous salaries have been provided while faculty take furlough days and students pay higher tuition fees.

2. 1990 Cal State Executive Compensation Scandal: Carter’s Role in the First Pay Scandal.

More than two decades ago, the California State University system was involved in a similar executive compensation scandal. Then and now, Herbert Carter played a central role in the controversy. In March 1990, the San Francisco Chronicle’s Greg Lucas reported that Chancellor Ann Reynolds was grilled by legislators “over hefty salary increases she gave herself and 26 other top executives in the California State University system.”  When State Senator Nicholas Petris, D-Oakland, tried to ask Reynolds about the salary hikes, “Reynolds stood up, took a seat in the audience and directed her second-in-command, Herbert Carter, to answer the questions.”

Carter was well qualified to discuss the salary increases because he was one of the lucky 26 recipients of pay hikes. He received a $31,026 raise; his annual salary increased from $118,974 to $150,000. According to the Los Angeles Times[4], Carter’s 26 percent salary increase was the highest of the six vice chancellors and better than the average 17 percent raise given to 20 campus presidents.

The raises “were implemented without public hearings or a vote of the CSU board of trustees.” Carter defended the secrecy telling the Chronicle, “The process is fair and legal.”

3. Carter and Trustees Gave Sweetheart Tenured Professorship to Disgraced Executive.

Secrecy and no-bid contracts have been a common occurrence during Carter’s Cal State career. In 2006, former Chancellor Barry Munitz was awarded a $163,776 annual salary to “teach one English course and perform other duties” at CSU Los Angeles. John Travis, then president of the California Faculty Association, criticized the “lavish salary.” He told[5] the  San Francisco Chronicle’s Jim Doyle, “It appears that the agreement to retain and pay Mr. Munitz at a higher salary than any other faculty member was reached between the (CSU Board of) Trustees and Mr. Munitz without public input, or disclosure, in violation of the Bagley-Keene Open Meetings Act.”

Munitz was free for the CSU position because he’d just resigned as president of the J. Paul Getty Trust. The New York Times reported, “Mr. Munitz, whose travel and expense spending were being investigated by the California attorney general’s office, was required to repay the trust $250,000 and was not given a severance package.”

Clara Potes-Fellow, a CSU spokeswoman, agreed that “Munitz’s executive compensation package was not publicly discussed recently by the CSU’s Board of Trustees.” In 2008, the Second District Court of Appeal ruled that[6] the sweetheart deal did not technically violate open meeting laws because it was a personnel decision.

4. The Cal State Executive Transition Program: Secret Windfall for Top Executives.

Following the Munitz controversy, the San Francisco Chronicle’s Jim Doyle dug deeper into the Cal State’s executive compensation system. Sandra Fried, a consultant to the Assembly Higher Education Committee, summarized the Chronicle’s investigation in a bill analysis[7]: “In July 2006, the San Francisco Chronicle published a series of articles about transition compensation provided to former CSU executives who were leaving their positions, revealing previously secret compensation packages that included transition pay, professorships and special benefits.”

The Cal State system operated a CSU Executive Transition Program, which provided departing employees with “a full year’s pay without specified duties.” Another special benefit given to CSU executives was a special position known as a “trustee professorship.” On his official biography on the CSU website[8], Carter lists his position as a “Trustee Professor” from 1995-1998.

For the full story, read Doyle’s outstanding investigation, which is available here[9].

5. Cal State Blocks Open Meeting and Public Disclosure Legislation: “We simply cannot trust the CSU Board of Trustees to reform itself.”

In 2007, Assemblyman Anthony Portantino, D-La Canada Flintridge, proposed legislation to bring accountability to the Cal State Board of Trustees. AB 1413 would have prevented secret agreements, added ex-officio Trustees appointed by the Legislature, ended ghost professorships, and required public disclosure of employee compensation. The Cal State system successfully lobbied Gov. Arnold Schwarzenegger to veto the bill.

Reacting to Schwarzenegger’s veto, California Faculty Association president Lillian Taiz predicted[10], “Without this bill, CSU Chancellor Charles Reed will be able to continue his destructive practice of padding the pockets of wealthy administrators at the expense of students, faculty, staff and the university as a whole.” Given the recent executive pay scandal, Taiz’s prediction seems to have come true. Portantino was equally prescient[11], “We simply cannot trust the CSU Board of Trustees to reform itself.”

6. $2 Million for Cal State Trustee’s “Secret Lobbying Corps.”

It wasn’t easy for the Cal State system to defeat AB 1413. The Cal State system needed the help of multi-million-dollar lobbying contracts to persuade the governor. Once again, the San Francisco Chronicle’s Jim Doyle had the scoop[12]: “In the last decade, the university system has paid more than $2 million in public funds to two Sacramento lobbying firms — Capitol Advocacy LLC, and Sloat Higgins Jensen & Associates — to influence the policies and budget decisions of the governor and state lawmakers…. Nearly $400,000 of those funds were paid to the two lobbying firms during months of the year when the firms performed no services for the CSU system regarding administrative or legislative actions, state records show.”

These multi-million dollar contracts were funded entirely by taxpayers. Trent Hager, chief of staff to Assemblyman Portantino, said that the lobbyists were responsible for defeating AB 1413. Sen. Gloria Romero, D-East Los Angeles, said that the responsibility for the “secret lobbying corps” rested with the Board of Trustees. She said, “This is the time for Chancellor Reed and the Board of Trustees to pull the plug on this secret lobbying corps, this secret force. There is no need for these lobbyists. There is no need for us to spend this money.”

7. Carter’s Tenure: Era of Tuition Increases.

To pay for the million-dollar Sacramento lobbyists, the Cal State Board of Trustees has filled its coffers with annual double-digit tuition increases. In November 2011, Carter was among the nine trustees to approve a 9 percent tuition increase on the system’s 409,000 students.  Since 2004, Carter’s first year on the board, tuition has increased from $2,334 per year to just under $6,000 for the upcoming 2012-13 academic term.

8. Carter Canceled Cal State Board Meeting to Hide from Outraged Public.

Carter allowed the vote to raise student fees in Nov. 2011 to occur behind closed doors, which led to charges from Lt. Governor Gavin Newsom that it violated the spirit of the Brown Act[13]. “While I understand the CSU leadership’s concerns regarding public safety, the spirit of open deliberations has been marred by the events of November 16, 2011,” Newsom wrote[14]. “This issue is simply too important to not allow for a full and thorough discussion. Otherwise, we contribute to the perception that this process is anything less than open and transparent.”

Then, Carter affirmed his fear of the public by canceling the Trustees’ Dec. 5 meeting. “We made this decision based upon our experience at the last board meeting where a large number of protestors attended, which is difficult to manage under the best of circumstances,” Carter said in the Nov. 30 press release[15]. Speaker John Perez, D-Los Angeles, seized on Carter’s meeting cancelation[16] to host “a free-ranging discussion on ways to ensure every Californian has access to our system of higher learning.”

9. Carter Authored Cal State’s Phony Pay Cap.

Portantino’s admonition, “We simply cannot trust the CSU Board of Trustees to reform itself,” is proving true once again with the Board of Trustees’ newest scam, a phony compensation cap. This past January, the board approved a new compensation policy after public outcry following the trustees’ approval of a $400,000 annual salary for San Diego State University President Elliot Hirshman. CSU spokesman Erik Fallis recently told the Daily 49er, Cal State Long Beach’s student newspaper[17], “Carter is the one who recommended the change in policy.”

Maybe that’s why the policy is filled with clever loopholes. The carefully-worded cap allows the board to continue its controversial policy of supplementing executive pay through university foundations. CSU Chancellor Charles Reed, San Jose State’s Mohammad H. Qayoum, San Diego State’s Hirshman and Cal Poly San Luis Obispo’s Jeffrey Armstrong currently receive foundation bonuses ranging from $25,000 to $50,000 per year.

State Sen. Leland Yee, D-San Francisco, has seen through the Cal State’s phony pay cap from the start[18]. “While I am pleased to see CSU Board of Trustees finally recognize that their past executive compensation practices were completely unacceptable, their new policy just doesn’t go far enough,” Yee said.  “Those making hundreds of thousands of dollars should not receive double-digit pay increases during bad budget times or when students are forced to foot the bill.”

10. Carter: Career CSU Bureaucrat Who Can’t Claim Ignorance.

Carter has been involved with the California State University (CSU) System in one capacity on and off over the last 37 years. Carter is the consummate Cal State insider. He has no credibility to plead ignorance to board policies, procedures or past scandals.  His positions with the Cal State system have included:

* 1974-78 — System-wide Affirmative Action Officer;

* 1978-83 — Assistant Executive Vice Chancellor;

* 1983-87 — Vice Chancellor Administration;

* 1987-92 — Executive Vice Chancellor;

* 1995-98 — Trustee Professor;

* 1998-99 — Acting President, CSU Dominguez Hills;

* 1999-01 — Special Consultant, CSU;

* 2004-09 — Member, CSU Board of Trustees;

* 2009-present — Chairman, CSU Board of Trustees.

“Since 1984, Herbert Carter has been near the center of every CSU pay hike scandal,” said Senator Joel Anderson[19], R-Santee, the first official to publicly oppose Carter’s confirmation. “With my ‘no’ vote I intend to send a clear message to the students, parents, and taxpayers we deserve better from higher education than skyrocketing tuition, poor planning, and little oversight.”

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