The UVA Slush Fund Saga Comes To Richmond
On Friday, the “come to Jesus” meeting was held. Though the door was made open to UVA to make good, the chest-thumping spin from Charlottesville has raised eyebrows this morning in Richmond once again.
For starters, it’s interesting how the regional news outlets in Virginia are treating the “slush fund” scandal. For starters, the Roanoke Times:
A former leader of the University of Virginia’s Board of Visitors told legislators Friday that the state flagship school could have avoided repeated tuition increases if the board had been aware that the school was stockpiling billions of dollars in unneeded operating funds, and she called on university leaders to immediately roll back recent tuition increases and to freeze it going forward.
. . .
It’s clearly better to learn of a $2.2 billion surplus than a deficit, Chap Petersen, D-Fairfax, a member of the Senate’s education and health committee, said earlier this week. But “the very basic point is why is a non-profit, a public university or any non-profit, sitting on this amount of cash — which is triple the state’s cash reserves? Why do they need it? If the state were sitting on a cash reserve of $8 million or $10 million or $20 million, we’d cut taxes, return it to the consumer. … We represent the taxpayers. That’s what we do. Of course we’ll be interested in that kind of money.”
The Roanoke Times piece was replete with statements from Virginia’s elected officials — a joint hearing of subcommittees from Senate Finance and House Education (which alone should send up red flags in Charlottesville) about concerns as to how UVA aggregated the fund, raised tuition, and only recently arrived at the consideration that perhaps these two events were disconsonant with one another.
The Fredericksburg Free Lance-Star was not at all kind to the perspective of UVA:
The University of Virginia’s top administrators on Friday staunchly defended $2.2 billion they have stockpiled for strategic investments while acknowledging they could have been more transparent about the existence and purpose of the funds.
Ouch.
Eyebrows raised, the Virginian-Pilot was no less enthused:
Saying the controversy over a $2.3 billion fund at the University of Virginia depressed him, defiant Board of Visitors Rector Bill Goodwin told lawmakers Friday they should “put some parameters” on the state’s Freedom of Information Advisory Council following an opinion he disagreed with.
Goodwin made his comments to lawmakers during a broader hearing on the university’s controversial Strategic Investment Fund, which an auditor’s review found to be proper and which the university says will be an important tool for spending on a variety of things to enhance the school.
Compare this to the positively triumphalist view at the Charlottesville Newsplex (which houses all three major area television stations). The Richmond Times-Dispatch, alternatively, was not as enthused about the results:
William Goodwin Jr., rector of the U.Va. board of visitors, asked the committee members to give the university time to prove the worth of the fund. He acknowledged that he would have done things differently in hindsight, but said he firmly believed the fund was a proper use of university resources.
After the meeting, Goodwin said administrators previously planned to announce the fund’s existence, but they were caught off guard by Dragas’ column. Looking back, he said, he would have been more transparent.
As in, the cat caught the canary and would like more time to formulate the conditions of the capture.
In the lead-up to the Friday joint subcommittee hearing, the crux of the argument was captured by none other than Democrat State Senator Scott Surovell, courtesy of the WaPo:
“Most of us think if you run the government, if you run a surplus, you cut taxes,” said state Sen. Scott A. Surovell (D-Fairfax). “Apparently, not U-Va. You just raise tuition some more.”
. . .
Francois DiFolco, of Fairfax County, said he was upset that U-Va. was holding such large operating reserves while it was raising tuition and his daughter was taking out student loans. She graduated in 2015, he said, about $28,000 in debt.
“We were in an economy where everyone was scraping, and they were making money,” DiFolco said. “I don’t think a state university is supposed to do that. .?.?. These 18-, 19-, 20-year-old kids took out loans to go to a school, and they took out more money than they had to. That’s not right.”
U-Va.’s in-state tuition for freshmen is now about $13,000, not counting fees, meals and housing. Three years ago, it was about $10,000. Tuition for out-of-state students is about $41,700 a year.
Shockingly enough, there seems to be a gentle-to-moderate smear campaign attacking just about any critic available (unless those critics are attached to Richmond, that is). To wit, the opinion of Virginia’s FOIA Council that UVA did not abide by the spirit or letter of Virginia’s Freedom of Information Act. From the RTD:
This opinion was written in response to a request from Kevin E. Martingayle, an attorney working for Dragas. It was based primarily on the facts presented to the council by Martingayle, who was recounting Dragas’ version of events.
According to the former rector, the board referenced the employees during closed session, but the discussion did not center on them.
“Instead, the closed discussion focused on principles for spending the money that now comprises the fund,” according to a statement by Martingayle.
Goodwin denied Dragas’ version of events and said it was inappropriate for the council to put out an opinion based on just one person’s point of view. The council should have sought the university’s side of the story, Goodwin said.
“If y’all are going to fund that, you ought to put some parameters on it,” Goodwin told a group of assembly members.
Ouch — back to the Virginian-Pilot article on the deeper objections that UVA Rector Goodwin had with Virginia’s FOIA Council:
“I’d like to make a suggestion for the legislature. Y’all fund this FOIA Council. And they give opinions and they do no research to see if their opinions have fact. … Helen had her attorney write a letter that was very misleading, in my opinion. To my knowledge, not one person from the FOIA Council contacted anybody that was in that meeting, including myself, including the president, and including the general counsel that reported to the attorney general. So something just tells me, if y’all are going to fund that, you ought to put some parameters on it to make it fair.”
Senate Majority Leader Tommy Norment, R-James City County, asked, “Are you advocating that we should abolish that council?” The comment prompted laughter in the room.
Once again, this is the crux of the problem. To Richmond, the problem isn’t the existence of the slush fund per se (legal, but worryingly unethical). The problem is that UVA got caught… as in most things, it’s never the act but always the cover-up that seems to sink things. More to the point? FOIA shouldn’t have to ask. These meetings should always be performed in the sunlight. Again, from the RTD article:
“If a public body held a closed meeting to discuss topics other than those described in the motion, and in fact did discuss topics other than those identified in the motion, that closed meeting would be in violation of FOIA,” reads a passage from June’s opinion concerning U.Va.
Of course, FOIA opinions are indeed advisory — as Everett (executive director of the Freedom of Information Advisory Council) mentions, they aren’t a tribunal nor are they equipped to be one.
…and yet.
Del. David B. Albo (R-Fairfax) said that for years, lawmakers have pleaded with the university to expand the number of seats for Virginia students. About two-thirds of U-Va.’s 16,700 undergraduates come from within the state. The university has grown in-state enrollment somewhat, but lawmakers wish it would do far more.
“For the last 10 years, they told us: ‘We can’t, because we’re really broke. We need the money from the out-of-state students,’ ” Albo said. The lawmaker, a U-Va. alumnus, said he had long been sympathetic to that response because he knew state funding had decreased.
“Now I find out that was all a bunch of bull,” he said. “They’ve got the money. They just don’t want to do it.”
Do you see where this is heading?
UVA’s public relations team has mishandled this from day one. Even assuming the very best of intentions, the existence of a “slush fund” while raising tuition rates and denying an increase of the number of in-state students at the University is problematic at best. The over-the-top attack on Helen Dragas for pointing out the dichotomy — first for attempting to modernize UVA, second for unveiling the existence of the slush fund — seems entirely misplaced. The labeling of the Virginia General Assembly as an “important constituency” when in fact their name is on the institution? Speaks to an obtuseness that cannot be easily reconciled in the eyes of stewards of the public trust in Richmond. Goodwin seems to be painfully aware of this fact:
“I wished we had put together a little bit better public relations about this, but … we didn’t know Helen was going to take to the press,” Goodwin said. “We were going to announce it within the month, but our way of doing it was going to be a little different.”
…but that right there is precisely the problem, and you have to admire Goodwin’s integrity throughout the process. If a pile of cash was mysteriously found, a “strategic investment fund” would be one excellent way of putting the money to good use for UVA — if those are ones optics. For the Virginia General Assembly, other optics are in play… especially as fungible taxpayer dollars were thrown at the institution to help create this slush fund — rightly named.
From the perspective of the General Assembly, Majority Leader Norment is right — Dragas’ WaPo whistleblowing op-ed was helpful, not harmful. The efforts thus far to quietly shaft Virginia’s FOI Council and Helen Dragas are deplorable in the extreme; the Charlottesville press’ inability or unwillingness to critique UVA should be a hint as to the real problem here: culture.
The Virginian-Pilot yesterday offered the Virginia General Assembly fulsome praise for offering light rather than heat, perhaps more symptomatic of the long-lauded “Virginia Way” in public discourse versus the more Trumpian or Clintonian slash-and-burn methods that have dotted our discourse over the last 25 years.
Yet absent in all of the praise for the General Assembly — a last ditch effort to abase oneself before Richmond in the hopes of avoiding any re-appropriation of the “slush fund” towards other Virginia public institutions — isn’t the what, or the why… it’s the how.
How this “slush fund” was aggregated — and at the expense of in-state Virginia students both potential and actual — is the core of the concerns coming from Virginia’s General Assembly.
Simply put, the money doesn’t belong to UVA.
No matter how it is sliced, the gains were ill-gotten, the complaints and resolution to fix the problem bi-partisan, the facade of UVA “being broke” while hiking tuition and demanding ever-increasing commitments from the Virginia taxpayer smashed, Dragas’ complaints against a sclerotic bureaucracy confirmed.
The solutions should not be public relations, sympathy for the devil, and spin. Rather, far better solutions would be sunlight, transparency, and a recognition of — perhaps impropriety is too strong a word — the public distraction the “slush fund” has become for the University of Virginia.
Penance requires three qualities: admission, restitution, and a firm resolution to sin no more. To date, the University of Virginia has offered the latter, but not the former two qualities.
That will remain a problem so long as it is ignored.
