UVA Slush Fund Scandal Wears Down Supporters

The Staunton News-Leader has perhaps been the most charitable of Virginia’s publications in covering the UVA Slush Fund scandal.  When even their editorial board is softening, that’s a problem:

First, we need to say this right up front: The university’s leadership — Rector William Goodwin and President Sullivan — need to address the questions and concerns about the investment fund much sooner rather than later. It does no one any good for these doubts to fester until September when legislators will discuss the matter.

Second, the concerns raised by the state FOIA Council must be cleared up immediately. Though there is no exemption for discussion of budgetary matters in the Code of Virginia, there is an exemption for matters that are related to or may affect budgetary planning. That’s a matter for lawyers to haggle over, and possibly a section of the state code the General Assembly itself may need to clarify in the future.

The News-Leader does what it can to obscure the issue, pointing towards 2006 enabling legislation allowing universities to pool resources and citing an underfunding of so-called critical needs.

These arguments are poor sophistry indeed, not while UVA has raised tuition 74% over 10 years in its aggregation of a multi-billion slush fund that only recently discovered a purpose in reducing the cost of tuition for cash-strapped students.

Carrying the battle standard still?  The Roanoke Times once again helpfully reminds Virginians of another issue at stake — in-state admissions vs. out of state:

On Aug. 8, state Sen. Bill DeSteph, R-Virginia Beach, and 10 other state legislators sent a letter to the university asking some pointed questions about its now-famous fund. Their suggestion that the fund be used to roll back tuition increases got the headlines, but that wasn’t all they were asking. Another option was listed. That was to use the fund to “immediately increase the number of in-state slots for Virginia students.”

“We want more in-state students,” DeSteph says. “We want more Virginia students to have an opportunity to attend the University of Virginia.”

That’s pretty straightforward, although the politics are not.

The legion of questions continues, especially now in the wake of the revelation that the Virginia Freedom of Information Advisory Council has deemed that UVA may very well have violated Virginia’s FOIA law when discussing the details of the slush fund’s aggregation.

Governor McAuliffe has already called for more sunshine as the General Assembly prepares to do its own investigation.  True to form, UVA is following the playbook of “internal investigations” to prepare its defense, something that once again strikes at the culture that seems to envelop the institution.

…which only invites more questions.

The Virginian-Pilot in an August 9th editorial suggests that the Virginia General Assembly ought not to stop at the UVA Slush Fund, but expand their investigation to explore other pertinent issues at the Commonwealth’s flagship university:

There will be questions: Where did the money come from? How will it be spent? That sort of thing.

We will see how this plays out, but there’s no need to be shy. Let’s keep this interesting and explore the salient issues.

Like, who is in charge here? State Sen. Bill DeSteph’s Aug. 8 letter to U.Va.’s hierarchy, demanding “information in every form regarding the monies that now comprise the fund,” does so on the basis of the Code of Virginia Section 23-69, he says, which provides that “the rector and Visitors of the University of Virginia shall be at all times subject to the control of the General Assembly.”

Of course, it’s not just DeSteph — Petersen (D-Fairfax), Ramadan and others have made their objection known in a bi-partisan furor.   The Virginia General Assembly is no mere “important constituency” — their name is on the institution, and it is run on behalf of and in benefit to the people of the Commonwealth of Virginia.

Somewhere, that was forgotten.  That is the crux of the issue at UVA.

It is interesting to note that those speaking on behalf of UVA (even on background) will note that the Virginia General Assembly only contributes 9% of the university’s operating funds — the same argument used to end the Gilmore-led state tuition freezes of the late 1990s.

What strikes the casual reader in the light of the Code of Virginia is the obtuseness of this argument, the shifting of the box away from the impropriety of gathering a $2.3 billion slush fund while crying poverty to the General Assembly.

The Virginian-Pilot editorial — wisely, one might add — errs on the side of caution when criticizing something such as $50 million yoga programs.  While sounding obtuse to the taxpayer, such donations if granted by an individual or foundation are indeed expected to be spent on the purpose for which they are donated.

Yet fears of the General Assembly meddling in football schedules (yes, an argument that has been proffered) in the search for accountability and oversight are particularly shortsighted, and emblematic of the cocoon crafted around critics of the status quo in Charlottesville.  To wit, the editorial continues:

Would the University of Virginia have helped itself by getting out in front of the news of its Strategic Fund? Yes. The vast U.Va. PR apparatus poorly managed this one.

Of course, the school likely did not count on a former board member to launch a populist “I-stand-for-the-people” attack on its financial planning. Which is exactly what happened with former rector and board member Helen Dragas.

Even so, a lesson taught. Opt for transparency at the earliest possible moment. Better to be prepared than on the defensive.

The problem here, of course, is that “slush funds” aggregated at an institution that is fed by taxpayer dollars while students endure 74% tuition hikes over 10 years?

UVA has a specific mission, and that is all well and good.

The Virginia General Assembly has a different mission — to be responsible stewards of the public trust, and to promote the common weal.

The $2.3 billion slush fund belongs to the people of the Commonwealth of Virginia.  Should the General Assembly choose to put it to use, the options are expansive.  UVA did not aggregate these resources in the sunlight; UVA should be prepared for a brokered compromise as the very best of outcomes.

A worst case outcome for UVA?  The General Assembly re-appropriating the public trust to the common good.

The basic question of ownership remains the effective issue at stake here.  When resources are given from the public trust, the concept that “all money is fungible” arises — and when those resources are aggregated in possible violation of Virginia’s FOIA laws?  The General Assembly rightly and wisely has a responsibility and duty to intervene, investigate, and if required interpose.

One final observation in all of this.

Former UVA rector Helen Dragas seems to be the focus of much of the ire coming from Charlottesville such far.  Accusations that Dragas has only brought this to light because she has political ambitions (many have suggested lieutenant governor) seem to be rather shallow and bitter.  The outcry from Richmond has been strong, direct, and bi-partisan — Dragas’ principal sin, if it can be called that, was to seek reform within a sclerotic bureaucracy that seems to have drifted from Jefferson’s vision for the institution.  As that failed, Dragas sought more radical means.

That such lengths are required at UVA to effect change — whether it is the slush fund or any other number of concerns?  That is a cultural problem that cannot be long ignored.

That condition need not be, and the recrimination directed towards Dragas strikes one as odd, displaced, and extraordinarily counterproductive — but part of the problem.  It is the cavitation of a siloed institution in desperate need of both air and sunlight.  Dragas may or may not run for public office, and presumably under the Democratic ticket if she chooses to do so.  That should be of no concern to the issue at hand.  As mentioned by the Virginian-Pilot, UVA’s leadership poorly managed the defense of the slush fund here, and this is yet one more distraction to the issue at hand.

Covering this story has been difficult, because it tarnishes an institution and community I have grown to respect a great deal — one that I am honored to be a part of and at many times feel an invited guest rather than a full member.  Nevertheless, there is a culture at play that at times needs to be reminded of the optics of the outside world.  One worries implicitly when examples are made of former rectors… so there it is.

Yet reminders are required from time to time, and Dragas deserves credit for bringing the “slush fund” to light despite the slings and arrows.

Richmond has the better argument; listening rather than responding might be the better play for the University in the short run.


DISCLAIMER: The author is a 4th year BIS student at the University of Virginia

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