SECRETS of the REGENTS
by Charles Schwartz, Professor Emeritus, University of California,
July 17, 2005
Available on the Internet at
Several recent developments show
how the Regents of the University of California have been sneaking away
from their obligations to conduct business in the open, as required by
state law. This starts with the Committee on Investments, then spreads
to all regental meetings, with secretized discussions identified on the
topics of pension futures and long range planning for the whole
from the Lawsuit
In 2003 I, along with some other plaintiffs,
filed a lawsuit against the UC Regents, charging that they had
overstepped the bounds of state law in their conduct of managing the
investment of many billions of dollars in pension and endowment
funds. We charged that they were wrong to conduct closed meetings
to discuss and decide on major issues of investment policy and
strategy, where the state open meetings law allowed closed meetings
only for the limited purpose of considering the purchase or sale of
specific investment items, the advance disclosure of which in public
session might lead to disadvantageous changes in the market price.
The trial court ruled in our favor and ordered
UC to disclose the Minutes, tape recordings and other documents from
several closed session meetings, in 2000 and 2002, when the regents
dealt with some major investment policy issues. UC’s lawyers appealed
those rulings all the way up to the California Supreme Court, on a
variety of claims, all to no avail.
One question following those victories was
this: How would the Regents conduct their future business after
this proven past abuse of the open meetings law? At first, it
seemed that scheduled meetings of their Committee on Investments had
significantly fewer agenda items listed for Closed Session; but then
this usage seemed to grow. So, in May of this year, I made a
formal request for documents related to Closed Session agenda items
(other than those identified as Personnel Matters) from several recent
meetings of the regents’ Committee on Investments. I sent that letter
to the attorney in the Office of the General Counsel of the Regents who
had handled these types of matters; I made reference to the previous
lawsuit; and I asked specifically for Minutes, tape recordings, and
other materials related to those Closed Sessions.
A formal letter of response from that office
(dated May 16, 2005) acknowledged receipt of my Public Records Act
request; told me that a search for appropriate records was underway;
and said this:
Please note that the University no
longer tape records closed session meetings, so there are no tapes or
transcripts that are responsive to your request.
That was a surprise. It prompted me to
submit further inquiries about this change in policy and practice. Here
is the detailed response, dated June 23, from the Office of the General
Counsel (with my Q’s and their A’s), along with some of my comments
Dear Professor Schwartz,
This is in response to your inquiries regarding the change in
University practice to no longer make audiotapes of closed session
Regents meetings. Here are the University's responses to your
inquiries; please let me know if you have any questions.
1. Is it correct that this change in policy/practice relates to all
closed session meetings of The Regents and committees thereof and not
just to the Committee on Investments?
Correct, the University's current
practice is not to audiotape any closed sessions of meetings of the
Regents or its Committees.
2. When was this change in policy/practice decided?
The University's practice of not
making an audiotape of closed session Regents meetings began in
November 2003 is an interesting date. That was after the trial court
had ruled that certain past meetings of the Regents’ Committee on
Investments had been improperly closed and therefore the minutes and
tape recordings of those meetings should be made public; but at that
November date UC was still appealing that ruling to higher courts. In
January 2004 their appeals were exhausted and the relevant documents
were made public. Of the several meetings involved, only one tape
recording was “found” and transcribed; for the others we got only the
The Q&A continues:
3. Who are the University officials
responsible for this change?
The change of practice was implemented
by the Secretary of the Regents, in consultation with the General
What a laugh! Are we supposed to believe that this change – protecting
the secret-but-official deliberations of regents from any future court
scrutiny – was not ordered by some regents? I don’t know if it is
illegal for the responsible regents to hide their identity; but it
certainly is cowardly.
4. Please provide me with copies
(under the California Public Records Act) of any and all documents and
other records related to this change in policy/practice.
If, in fact, this change in policy/practice was discussed in any closed
session meeting(s) of The Regents or any committee thereof (or, in any
open session for that matter), my request for documents should include
Minutes and other documents related to those meeting sessions.
The only written record related to the
decision not to create audiotapes of closed session meetings on a
going-forward basis, is a single sentence contained in the minutes of a
closed session Regents meeting in November, 2003. The minutes
themselves are exempt from disclosure pursuant to the California Public
Records Act and the Bagley Keene Act, as pertaining to litigation
matters. However, I have reviewed the minutes and can assure you
that there is only one sentence on this topic, which states: "Mr.
Holst noted that closed session meetings were no longer being tape
Mr. Holst is the General Counsel of the Regents. You see how this
works: They hold an illegally closed meeting to decide how to
circumvent the law on open meetings; then they deny public access to
records of that meeting on the grounds that the meeting was closed and
therefore its records are not publicly available. I can imagine that
further attempts to inquire into how that decision was made would be
met with the objection of attorney-client privilege.
of Another Illegal Closed Door Meeting
The Academic Council is the top body of the
University faculty’s Academic Senate. The chair and vice-chair of
this body sit with the regents at almost all of their meetings,
although they are not voting members of the Board. Here is a
portion from the Minutes of the Academic Council’s meeting of March
30-31, 2005, covering a report by the Chairman, Professor George
Blumenthal, on items of interest from the Regents’ meeting earlier that
2) Pension issues: There was an
extensive discussion on several pension plan issues in closed session,
including the question of when contributions to UCRP might be expected
to resume and plans for how those might be implemented. Options for how
UC might convert some or all of its employees from a Defined Benefit
Plan to a Defined Contribution Plan or Hybrid Plan were also discussed.
The regents’ position at this time is that they are not prepared to
move in the direction of changing UC’s Retirement Plan, independent of
what may be required by state pension reforms.
That such topics were discussed (extensively),
and perhaps even a regental consensus arrived at, in closed session meeting, is a
clear violation of the state’s open meetings law. I have examined the
formal agenda for that March meeting of The Regents and there is no
indication of any such topic scheduled for a Closed Session, so it may
have been something that was just brought up during a Closed Session
scheduled for other business; but such conduct is still in violation of
the letter and the spirit of the law.
Let me remind readers of the powerful language
of Legislative Intent introducing the Bagley-Keene Act, to which the UC
Regents are subject. This is California Government Code Section
It is the public policy of
this state that public agencies exist to aid in the conduct of the
people's business and the proceedings of public agencies be conducted
openly so that the public may remain informed.
In enacting this article the Legislature finds and
declares that it is the intent of the law that actions of state
agencies be taken openly and that their deliberation be conducted
The people of this state do not yield their sovereignty to
the agencies which serve them. The people, in delegating
authority, do not give their public servants the right to decide what
is good for the people to know and what is not good for them to
know. The people insist on remaining informed so that they may
retain control over the instruments they have created.
This article shall be known and may be cited as the
Bagley-Keene Open Meeting Act.
Of further interest is the ballot statement in
support of a Constitutional Amendment, approved by California voters in
1970, which placed the Regents of the University of California under
Legislative mandate for open meeting rules.
The second, and most important
argument for this Constitutional Amendment is that the University of
California is supported by the people of California. We, the
people, have a right to know how the decisions affecting our tax money,
and our sons and daughters, are made; who is making them and why.
By requiring open meetings we help guarantee that all decisions will be
made in an open, logical, and democratic manner with all facts present
and all viewpoints noted. We also eliminate the chance for
"backroom politics" to play a role in the decisions. …
Moreover, the Board of Regents is a branch of the state
government. As with all other state agencies, there is no good
reason why the decisions made by the Board should not be debated and
voted upon in the public view. In fact, there is every reason to
guarantee that the public trust assigned to the regents will be
administered openly, not privately or secretly. If the people are
to understand and support their University, if they are to have faith
not only in the University but in all operations of government, they
must have legal guarantees that no action will be taken "behind their
back." Proposition 5 will help provide that guarantee, will
protect the public interest. And will provide the University with an
added measure of public confidence.
Long Range Guidance Team
In January, UC President Robert C. Dynes
announced that he had appointed a UC Long Range Guidance Team –
composed four Vice Presidents, three Chancellors, two Faculty leaders,
and seven Regents – with the following charge:
• Examining and clarifying the mission,
focus, and strategic intent of the University of California for the
next 20 years,
• Identifying a concise set of goals, objectives, strategies, and
measures to guide the University toward its chosen direction, and
• Focusing and aligning University resources, initiatives, and the
talent and energy of the leadership team to achieve those strategic
goals and objectives.
Given the budgetary problems of recent years,
many people have been worrying about the future of this great public
university; and intensive study of long-range planning is certainly a
good thing. But why should this be done in secret?
I made several inquiries of top UC officials
and was informed that meetings of this Guidance Team would not be open
to public observers. I submitted my objections to such secret
proceedings and made a formal request for related public records.
On June 30, I was informed that the Guidance Team held its first
meeting in May, with future meetings planned at two month intervals.
It is explicit that this Team is intended to
shape and guide future decisions by The Regents about what directions
the University shall take. The particular regents chosen to be
part of this Team are dominant members of the Board – they chair the
most important committees and are forceful speakers at open
meetings. Thus one is led to conclude that the primary purpose of
this Team – as distinct from any one of many administrative task forces
that the President might create to prepare studies on particular issues
– is to form an advanced consensus among the regents about
fundamentally important issues, and to do this by means of closed meetings.
That sort of tactic – evading the public deliberations requirement of
the open meeting law – is something that the courts have in past cases
found to be illegal.
It has been customary for the Office of the
Treasurer of the Regents (OTR) to provide a variety of data on the
and one of the regular features there was a quarterly listing – a
portfolio – of the investment holdings of the university’s pension and
endowment funds. I have frequently looked at that information;
and I did so sometime in February of this year, downloading the equity
and bond portfolios compiled as of December 31, 2004. Sometime during
March I looked again and found that all of the portfolio information,
current and previous listings, had disappeared from the Treasurer’s
website. I sent an email inquiry to that office and received a reply as
We are posting documents consistent
with materials provided to The Regents Committee on Investments in open
I then looked more closely at the report
prepared for the Regents’ Committee on Investments at their February
15, 2005, meeting and found that the data given there, listing
components of the UCRP investments as of December 31, 2004, was indeed
different from the data I had downloaded in their portfolio for that
same date. It seemed that almost $1 billion in funds previously
designated as placed with external Small Cap Domestic Equity managers
This could easily be imagined as a minor
clerical error. But there has been no public acknowledgment or
any other explanation given out, nor has any of the portfolio data been
restored on the public website. The Regents and their Treasurer have a
fiduciary responsibility to keep the beneficiaries of these investment
plans well informed about what is going on; and that implies admitting
and clearing up any mistakes or other discrepancies in their reported
The reference to “open session” in the
above-quoted email suggests that perhaps this problem, the billion
dollar discrepancy, was discussed in the Closed Session part of that
February 15 meeting of the regents. But that would be an improper
use of the law, which provides for closed meetings only on narrowly
specified topics – and covering up an embarrassing situation is not one
I wrote to the University Auditor about this
and requested an investigation. His report, released July 15, says the
discrepancy was the result of a “programming error” in OTR and there
was no misconduct. The report, however, says nothing at all about
whether there was discussion of this matter at a closed regents meeting.
California Government Code Section 11130
allows any interested person to bring legal action against public
officials who violate the terms of the Bagley-Keene Open Meeting Act;
and among various sanctions, the judge may order the future tape
recording of all closed sessions. Section 11130.7 also provides
criminal penalties for any member of a state body who attends a meeting
in violation of the Act with the intent of depriving the public of
information to which the public is entitled.
It would be nice to think that there are
members of the Board of Regents who care enough about their public
responsibilities to insist that the current mess of secret proceedings
be cleaned up; but perhaps that is expecting too much.