By John Hrabe

Every good protest has a catchy rallying cry. A simple memorable phrase that summarizes the movement’s agenda. The Vietnam War: “Hey-hey! Ho-ho! LBJ has got to go!” The Women’s Rights Movement: “What do we want? Equal Rights! When do we want it? Now!”

Over the past year, students, faculty and staff have organized protests and rallies at California State University campuses, as the country’s largest higher education system copes with annual tuition increases and budget cuts.  The California Faculty Association announced on Tuesday that, after all the protests, it finally had reached a tentative contract agreement with trustees. And the rallying cry is clear:

“What do we want?” 

* “Salary for 12-month department chairs on sabbatical shall be based on a 12-month — not academic year — salary schedule.”

* “The age of dependents eligible for fee waiver will increase from ‘up to 23 years of age’ to ‘up to 25 years of age.’”

That’s not a parody, but two exact quotes from the faculty association’s fact sheet on the deal that could end the faculty’s holdout. Have they really been holding out for revised sabbatical pay schedules and an increased age for dependent tuition waivers?

The faculty association’s fact sheet confirms how badly they were beaten by trustees. In fact, faculty members only played defense. The first 19 bullet points contain some variation of the phrases: “stopped management’s attempt to,” “defeated CSU administration’s legislative effort to,” and “beat back a chancellor proposal to.” Another CFA victory brought Cal State “up to date with state law to prohibit discrimination against faculty.”

The deal only goes into effect “upon ratification by CFA members and the CSU Board of Trustees.” CFA members can and should veto the agreement. They’re the only group with any leverage over trustees and could use their contract negotiations to change the corruption at Cal State.

Cal State Administrators Immune from Austerity Measures

Cal State Trustees have been arrogant. Top administrators continue to be dismissive of student and faculty concerns. And CSU presidents have been entirely immune from any budget cuts.  Since 2008, student fees have nearly doubled.  Faculty members have matched student sacrifices by foregoing pay raises and taking furlough days. Over that same time, there’s been no end to Cal State’s administrative excess. Don’t forget that these figures are just the president’s base pay.

* Elliot Hirshman, the president of San Diego State University, has received an annual salary bump of $154,500. He made $267,000 per year at the University of Maryland, but now makes $421,500 at San Diego.

* San Jose State University’s Mohammad Qayoumi takes home 38 percent more per year now that he moved over from the Cal State East Bay campus. He earned $237,072 per year at East Bay and earns $328,200 at San Jose.

* Dianne F. Harrison, the new president of Cal State Northridge, has increased her salary from $270,315 to $324,500 per year, a 20 percent raise over her previous base salary at the Monterey Bay campus.

* Mildred Garcia, Fullerton’s new president, also scored a 10 percent pay raise by changing campuses. She now earns $324,500 annually, a 10 percent raise over her previous post.

* Leroy Morishita, the new president at CSU East Bay, receives $303,660 per year, a 10 percent increase from his salary as the interim campus president.

* Leslie Wong, the new president of San Francisco State University, earns $123,000 more than he did at Northern Michigan University. His salary increased from $201,995 to $325,000 per year.

Enough Money for Pay Raises for Top Managers

Cal State presidents have shared the wealth with their top managers.  According to an analysis of payroll data, Cal State presidents awarded 486 pay raises to top managers from 2008-10. Cal State Chancellor Charles Reed handed out another 80 pay raises to his chosen bureaucratic elite.  Those figures excluded promotions for staff that have internally changed positions.

“On an annualized basis, these discretionary raises added $6.5 million to the cost to run the CSU system,” the study’s authors concluded. You’d expect the California Faculty Association to highlight such inequitable measures in their negotiations, especially given that they authored the report.

Cal State has repeatedly defended the pay raises as necessary to retain and recruit the best talent. “We need to be able to recruit and retain the best and the brightest individuals,” said Mike Uhlenkamp spokesman for the Cal State chancellor’s office. Apparently, that logic only applies to presidents and not faculty members.

“Fair Agreement in Hard Times”

“It’s a fair agreement in the context of hard times,” said Lillian Taiz, the president of the California Faculty Association. “We are disappointed we were not able to get a raise, but that wasn’t in the cards. It was a tough pill to swallow, I won’t kid you.” Taiz is right. Given the current budget situation, it’s completely unreasonable for faculty to secure higher pay or increased benefits. However, Cal State faculty could have achieved something worth more than money: respect.

Faculty Association Should Demand Faculty Salaries Be Tied to Administrators’

The California Faculty Association should reject the current contract and demand just one additional contract provision: All salaries, including administrators, campus presidents and top managers, shall be linked to the faculty’s pay and benefits. To keep trustees honest, the policy should be applied to all pay, including bonuses paid out by nonprofit auxiliary foundations.

With just this one demand, CFA members could fix Cal State’s attitude problem. No more presidential pay raises. Faculty members could force a new policy of shared sacrifice and tie administrators’ success to their own.  Everyone at Cal State would be on the same page and face the system’s upcoming challenges together.

Faculty members don’t teach for the money. They do it because they love teaching. But, more and more, faculty are finding it hard to teach for a university system that creates one set of rules for administrators and another for faculty members. It’s especially disrespectful given that faculty are the only ones in the classroom.

Shared Sacrifice! Equal Austerity! Not bad slogans for the next Cal State protest.

By John Hrabe

With 427,000 students and 44,000 staff on 23 campuses, the California State University System is the nation’s largest higher education system. But from Los Angeles to San Francisco, Cal State is raising tuition, cutting enrollment and campaigning for a multibillion-dollar tax hike — all while providing high salaries and lavish benefits to its top executives. “If the tax measures fail,” the Associated Press recently reported, “fall enrollment would be cut another 20,000 students and 3,000 employees laid off.”

In less than eight years, tuition has risen 150 percent, from $2,334 per year in 2004 to just under $6,000 this fall. Just don’t ask Cal State’s top executives to share the burden. The college’s trustees have doled out massive pay raises, misled the public about its executives’ compensation and now want to use nonprofit donations to supplement already excessive salaries.

College Foundations Face Minimal Scrutiny

Cal State’s official executive-compensation summary leads the public to believe that the average president receives $300,000 in pay and up to $60,000 toward housing costs. The job isn’t easy, and the high salary reflects the need to recruit top executives that can raise money for the school, among other tasks. To fulfill their fundraising obligations, Cal State argues, presidents need two things: a housing reimbursement and the authority to run a tax-exempt, auxiliary foundation. These auxiliary foundations, however, offer crucial evidence that Cal State has underreported the total amount of taxpayer-funded compensation its officials receive.

College auxiliary organizations, like any tax-exempt nonprofit, are required by law to report executive compensation on publicly available tax returns. In order to prevent organizations from hiding the true amount of executive compensation, the IRS requires the disclosure of all compensation from the nonprofit and any related organization, including “a nonprofit organization, a stock corporation, a partnership or limited liability company, a trust, and a governmental unit.”

That means every president’s taxpayer-funded salary should be disclosed on the college foundation’s tax return because it is from a related organization. The IRS regulation is designed to prevent non-profits from hiding executive compensation from other sources. Therefore, Cal State foundation tax returns can act as a way to verify the taxpayer-funded compensation disclosed by each Cal State University. Cal State foundation tax documents don’t come close to matching the numbers disclosed by the Cal State Chancellor’s Office or the State Controller’s Office.

Consider the case of Mohammad Qayoumi, the former president of California State University East Bay and current president of San Jose State University. Cal State’s website reported his East Bay starting salary at $237,072 per year, plus $60,000 toward housing costs. Yet the Cal State East Bay Educational Foundation, the nonprofit auxiliary organization the college president manages, reported that Qayoumi received zero compensation from the foundation or any related organization on federal tax returns for 2008, 2009 and 2010. The foundation’s Form 990 tax return is inaccurate and contradicts the IRS’s straightforward instructions for disclosing executive compensation.

It’s conceivable that East Bay’s missing executive-compensation data could be an inadvertent accounting error. However, East Bay’s tax returns don’t resemble the tax returns of other Cal State foundations that reported total presidential compensation. For example, Sacramento State University’s foundation tax returns for the same period include executive compensation data from both taxpayer and foundation sources.

East Bay: Non Responsive to Requests for Public Information

Cal State East Bay hasn’t responded to repeated requests for the total compensation data for the periods in question. “The IRS Form 990 tax reports filed by Cal State East Bay and available to the public on the university Web site were complete and accurate at the time each was filed,” Barry Zepel, Cal State East Bay’s Media Relations Officer, wrote to CalWatchdog on April 28. “The 990 forms include some information presented on a fiscal year basis and some on a calendar year cycle, which includes data from two fiscal years (e.g., the 990 for CY 2008 would reflect data drawn from FY 2007 and FY 2008).”

Taxpayer advocates like Senator Joel Anderson, R- Santee, aren’t buying the excuses. “CSU’s leaders are proving over and over again that they’re incapable of being good stewards with taxpayers’ money: the $400,000 executive salaries, the tapping of Foundation money to cover-up these outrageous salaries,” Anderson told CalWatchDog.com. “Now we find out that they may have committed tax fraud in the process.”

The foundations’ missing or misreported numbers bear directly on the debate about Cal State’s executive compensation. The Cal State Chancellor’s Office continues to claim that high salaries are needed to attract the best talent. Moreover, the Cal State Board of Trustees has now shifted all future pay raises to these nonprofit foundations.

“As I said last week when the chancellor proposed this new policy, it is nothing more than smoke and mirrors disguised as reform,” said State Senator Leland Yee, D- San Francisco. “The trustees are beyond tone deaf; they are either completely oblivious or simply don’t care what students, lawmakers, and taxpayers think.”

Finance Expert Qayoumi Can’t Fill Out Basic Forms

A former vice president for administration and finance and chief financial officer at Cal State Northridge, Qayoumi had impeccable credentials to sort through the foundation’s finances. However, Qayoumi couldn’t follow basic tax instructions. Two sections of the 2009 tax return clearly call for disclosing compensation from related organizations: “Column E: Reportable compensation from related organizations (W-2/1099-MISC)” and “Column F: Estimated amount of other compensation from the organization and related organizations.”

One reason to think the foundation’s numbers may not be the result of mere oversight or clerical error appears on Schedule O of the East Bay Educational Foundation’s Form 990. It describes in painstaking detail the review process officials undertook before submitting their 2010 returns to the IRS: “Form 990, Part VI, Section B, Line 11: The organization’s Form 990 is reviewed line by line by the president and treasurer and then signed by the president. After the president and the treasurer have approved the final draft of the Form 990, the organization will create a PDF of the form and email it to the members of the governing body before submission and/or due date of the form.”

East Bay is the fourth Cal State campus to report one set of compensation numbers to the IRS and another to the public. On federal tax returns for 2007, 2008, and 2009, San Jose State University’s Tower Foundation reported zero compensation paid by the organization or any related organizations to more than a half-dozen high-ranking university personnel, including the college’s president, provost, athletic director, and several vice-presidents. The California State University Office of the Chancellor understated the annual compensation of San Francisco State University president Robert Corrigan by as much as $52,787 when compared to the San Francisco foundation tax returns.

The most substantial discrepancy uncovered so far involves Cal State Los Angeles president James Rosser. He reported $515,612 in annual compensation to the IRS for the 2009 tax year. In at least five instances, including official statements from the chancellor’s office, Cal State’s website, and an independent competitive pay analysis by the Mercer Consulting firm, Cal State officials have falsely claimed or implied that Rosser’s compensation was nearly $200,000 less—an annual base salary of $325,000.

Rosser’s half-million-dollar compensation, which was reported on foundation tax documents, provides evidence that Cal State’s official compensation data is bogus. It turns out that base salary and housing benefits are only a fraction of total executive compensation, and these miscellaneous benefits represent as much as 50 percent of a college president’s base pay.

Retirement benefits alone cost taxpayers an amount greater than the state’s average per capita income. In the case of East Bay’s 2006 presidential compensation of Qayoumi, base pay and housing were supplemented by a $12,000-per-year car allowance, five weeks of annual paid vacation, 12 days of sick leave, a top-of-the-line health-care plan, dental coverage, vision care, automatic enrollment in the state’s retirement program for public employees, an annual physical examination, relocation costs and moving expenses, and “entertainment allowances.”

In 2011, Qayoumi transferred to San Jose State University, which increased his base salary to $328,200, a $91,128 raise in five years. By transferring to San Jose, Qayoumi picked up another $25,000 from the university’s nonprofit auxiliary foundation. Four Cal State officials (including Qayoumi) collect anywhere from $25,000 to $50,000 in bonuses paid by tax-exempt college foundations.

Cal State’s Ongoing Pay Scandal

Cal State’s executive-compensation woes began last July, when the university’s Board of Trustees approved a $400,000 base salary for Elliott Hirschman, San Diego State University’s new president. At the same meeting, the trustees announced a 12 percent tuition increase for the fall term. Students protested. The faculty union president blasted the trustees for their “complete arrogance and tone deafness.” Governor Jerry Brown questioned why Cal State presidents should be paid “twice that of the Chief Justice of the United States.” Ultimately, the public outrage encouraged Republicans in the State Senate to oppose the reconfirmation of Herbert Carter, chairman of Cal State’s board of trustees.

Carter is gone, but his successor hasn’t learned anything from the executive compensation scandal. “Herb Carter was basically the fall guy,” Bob Linscheid, the board’s interim chairman, bluntly told the Chico Enterprise-Record. The board has matched Linscheid’s talk with equally tone-deaf action. Trustees last month voted 10 percent pay raises—the maximum allowable under a rule the board passed earlier in the year to mollify critics—for the new presidents at Cal State’s East Bay and Fullerton campuses. “I’m just sorry we can’t pay them more because of the policy we adopted,” CSU Trustee Roberta Achtenberg lamented at the meeting.

Assemblyman Anthony Portantino, a Democrat representing La Cañada-Flintridge in Southern California, and Senator Yee are calling on Cal State administrators “to come clean with a complete and detailed look at just how CSU executives are paid.” The two Democratic legislators are hoping to “ferret out the truth,” which isn’t too much to ask, especially since Cal State’s motto is Vox Veritas Vita: “Speak the truth as a way of life.”