The UC has long been dominated by highly connected, wealthy Californian business people, political insiders, and lawyers appointed by the Governor as “Regents” who manage the entire UC system (and three national labs) during their 12-year term. 19 Regents are appointed (almost none have experience in education), and 7 are “ex officio” members (including public officials, the Governor, the UC President, and one student). Although CA’s constitution says “The university shall be entirely independent of all political or sectarian influence & kept free therefrom in the appointment of its Regents,” favoritism and financial ties pervade Governors’ choices of Regents.
Profiting from Student Fee Hikes
Last year students saw a 32% fee increase. While this is sickening in and of itself, former Chair of the UC Regents and current Regent Richard Blum is heavily invested in for-profit colleges like ITT Technical Institute. That means that when the UC closes its doors to students and fees increase, Blum directly profits as demand for his private institutions goes up. You lose, he wins.
Regent Paul Wachter is Schwarzenegger’s money-man, and were business partners before Schwarzenegger’s run for Governor. Wachter manages the blind trust into which all of Schwarzenegger’s investments were liquidated when he became governor. Given Wachter and Schwarzenegger’s buddy-buddy relationship it’s hard to see how Wachter acts as an independent manager of the Governor’s assets. Schwarzenegger’s financial holdings were briefly and partially disclosed during the recall campaign in 2003. They revealed a financial empire of tens of millions of dollars invested in securities, private equity funds and over 100 business ventures, many in partnership with Wachter.
Finance & Real Estate
Regent Russell Gould is VP of Wachovia, one of the country’s largest banks, holding $billions of loans from millions of students. Gould was appointed Regent by Schwarzenegger after he advised and campaigned for Schwarzenegger, and was also a top choice for the Gov’s chief of staff. Regent Judith Hopkinson gave $145,000 to Gov. Davis, who appointed her Regent. Her company Ameriquest Capital specializes in predatory home mortgages, and also gave $1.5m to Schwarzenegger. Real estate magnate and Democrat insider George Marcus gave $215,000 to Davis before the Gov. appointed him a Regent.
Military & Construction
Regent Eddie Island was Vice President for McDonnell Douglas, a major defense contractor that makes fighter jets, Apache helicopters, and other war tackle. Regent Richard Blum has been milking us for years to feed his construction companies and five mansions. His wife, Diane Feinstein, on the Senate Subcommittee on Military Appropriations gave his URS and Perini corporations juicy Iraq contracts – only outdone by Blum himself once he was appointed Regent (after donating $50,000 to Gov. Davis). He has given his pet companies hundreds of millions in unusual contracts, one of which is to level the Memorial Oaks Grove that students have been protecting for over a year (see article, pg. 4). After student protest, he divetested from URS and tried to buy some good PR by throwing $15 million at a hastily convened poverty research center – see, the children love Blum, he’s a good guy!
Many of the same people shaping popular consciousness through mainstream media also control our university. Regent Sherry Lansing was CEO of Paramouunt Pictures for 12 years. Regent Norman Pattiz controls America’s largest radio network – he gave $300,000 to Gov. Davis who appointed him Regent. And Regent Monica Lozano is VP of Impremedia, which controls 75% of the Spanish- language news market in the US.
UC conflict-of-interest coordinators are supposed review the Regents’ statements of economic interests, which are required by the Political Reform Act of 1974 and can be viewed by making written public-records requests to UC offices in Oakland.
UC holds about $65 billion in its Retirement Plan and endowment fund. This UC money is heavily invested in the world’s largest corporations, most irresponsible businesses, and major weapons manufacturers. Most infamous were investments (>$3 billion) in companies doing business with the South African apartheid government in the 1980s (see the film “From Berkeley to Soweto”). The UC also once held and lost $325.5 million in pension and endowment funds in telecom giant and mega-fraud MCI WorldCom Inc. Under student pressure to end state-sponsored genocide in Darfur, the University is currently liquidating investments in nine companies doing business with Sudan, though it’s also taking BP’s $500 million (BP collaborates closely with genocide-supporting companies like PetroChina and is responsible for the single worst environmental disaster in the history of the United States). See also www.endowmentethics.org