UC Davis Chancellor Linda Katehi has faced controversy before. In 2011, she faced calls for resignation after Lt. John Pike was videoed pepper spraying seated protesters on the UC Davis Quad. Even after scathing reports by university-commissioned independent investigators, along with a task force led by former California Supreme Court Justice Cruz Reynoso, showed that errors by the chancellor and staff contributed to the problems which led to the pepper spraying of student protesters, she survived – mainly due to support from the faculty.
However, the latest round of controversies, from accepting a board position last month with DeVry Education Group and now a report in the Sacramento Bee that the chancellor received a total of $420,000 in income and stock over the 2012-2014 fiscal years as a board member for John Wiley & Sons, a publisher of textbooks, college materials and scholarly journals, leads to questions about the chancellor’s judgment.
DeVry Education Group is a for-profit company which is under federal scrutiny for allegedly exaggerating job placement and income statistics. She was forced to resign from that post Tuesday after her involvement became public knowledge.
“I take my responsibilities as Chancellor of UC Davis, and to the entire University of California, very seriously and sincerely regret having accepted service on boards that create appearances of conflict with my deep commitment to serve UC Davis and its students,” Ms. Katehi said in a statement released late Friday.
Ms. Katehi added, “I have resigned from the DeVry board and intend to donate all the stock proceeds I made from serving on the John Wiley and Sons board to a scholarship fund for UC Davis students. I look forward to continuing to serve the UC community.”
That is not good enough for Assemblymember Kevin McCarty, who represents parts of Sacramento and also West Sacramento.
On Friday at midday he issued a statement calling for UC Davis Chancellor Linda Katehi’s resignation and announcing legislative hearings.
“Recently, I met with UC Davis Chancellor Katehi regarding her recent resignation to the DeVry Education Group’s Board and other campus issues. After this meeting, her rationale for associating with DeVry has left me unsatisfied and contradicts her job to run a public university and educate our students. Further, a subsequent revelation of another sweetheart deal with text book publishers earned her an additional $420,000 from 2012-2014,” he said.
He continued, “This has driven my level of dissatisfaction even higher.”
As the Assemblymember points out, “Chancellor Katehi receives a taxpayer and tuition funded salary of $424,360. It is unseemly for the Chancellor to be moonlighting side deals to fatten her bank account, especially when it runs contrary to the interests of our students that are strapped with decades of student debt to pay the high costs of text books and other education expenses.”
“Therefore,” he said, “today I am calling for the resignation of Chancellor Katehi and am announcing legislative hearings to look into this matter across all three segments of higher education.”
Chairing the Assembly Higher Education Committee is Assemblymember Jose Medina. He also called for oversight hearings as the Legislature considers UC funding.
“Chancellor Katehi’s paid positions with private, for-profit corporations raise important questions about UC’s conflict of interest and outside employment policies,” he said in a statement. “This information is particularly concerning in light of the positive strides that the state has made to increase funding for the system.”
The Bee on Friday reports that the UC Office of the President is required to review outside board positions prior to allowing chancellors to accept them. The Bee reports that Chancellor Katehi accepted the position at DeVry “without completing the required approval process and without final approval from UC President Janet Napolitano.”
The Bee adds, “It is not clear whether the president’s office signed off on the board seat with John Wiley & Sons.”
UC data shows that she spent 168 hours during the 2012-2014 fiscal years on work with Wiley. “For the 120 hours that came during UC Davis business hours, she used vacation time.”
In a statement from UC President Janet Napolitano, she said, “I appreciate that Chancellor Katehi has apologized and taken responsibility for having accepted board positions that created an appearance of conflicts of interest with her University responsibilities.”
She added, “I deeply value Linda’s strong record in helping to make UC Davis a world-class center of scholarship and research, and continue to believe in the value of her contributions to the University. We will take all steps necessary to prevent a recurrence of this unfortunate incident.”
What does this mean for the chancellor? Four years ago, the chancellor was able to survive an incident that led to national news coverage and criticism of the university. Just last week, the chancellor artfully avoided a potential landmine by embracing student protesters in the wake of a hate crime incident. A similar situation at the University of Missouri brought down both the chancellor and president.
However, this latest controversy is troubling. As Assemblymember McCarty points out, the optics of both situations are bad. First, the chancellor is receiving well over $400,000 in salary from the university, so she needs to moonlight for additional money, as tuition costs are pricing students out of school or into student debt?
In the meantime, making money on textbooks is problematic, giving the widespread belief that publishers are gouging students.
“Publishers are gouging students for the cost of textbooks,” Assemblymember McCarty would tell the Bee. “The optics of this are horrible. I’ve lost my confidence in Ms. Katehi and I think this warrants calling for her resignation.”
The biggest issue for me is simply the lack of good judgment here. The chancellor appears to have failed to follow proper protocols for outside appointments, it is hard to believe that the chancellor was in need of additional money, and the two associations she chose couldn’t have been much less appropriate. What exactly what she thinking?
The lawmakers have a good deal of leverage on this situation, and may use it if people like Assemblymembers McCarty and Medina are going to press the issue and/or threaten to hold up money for UC in committee.
Still, at least based on the initial statement by Ms. Napolitano, it does not look like the chancellor’s job is in immediate jeopardy. She just better hope the next shoe doesn’t fall anywhere near her.
—David M. Greenwald reporting
It’s not clear to me that either of these positions pose a blatent conflict of interest; though perhaps they could be in the grey area.
What surprises me is how she has the time to do this. I would think her position as chancellor is more than a full-time job. UC Davis is a complicated place to help steer, and has some serious issues, not the least of which is student housing. I would think she would be busy more than 40 hours per week for her chancellor responsibilities; and really there is no end of work that can be done and contributions made in such a job. On the other hand, perhaps her positions on the boards require only a few hours of work per year for her ~$70K(?) salary–when buying their Wiley books at the college bookstore and waiting in line to pay for them, students can meditate on how the price of their textbook (typically $150-$200 per hardbound textbook) helps to support their chancellor, for her input of a few hours per year, and a meditation on the infallibility of the invisible hand (as it currently operates) in helping to ensure such a compensation rate–Katehi is providing a lesson here to the students, and ain’t nothing for free!
Lots of trouble for me to find any grey in the conflict-of-interest application. Conflict of Interest laws and administrative controls has been in existence for many years, for every non-college public servant with budget authority. Prior to reform measures–implemented just a decade ago in response to public pressure–California’s University system had numerous leaders receiving per-hour compensation that far exceeded their compensation as “public” servants.
Aside from the handsome direct compensation for Katehi’s services, she received stock options from both private interests, Wiley and De Vry. Stocks are economic performance measures for a company. For every print book published by Wiley and sold at the UCD Bookstore, Katehi directly benefited by having her gifted stocks increase in value.
UCD is representative of all advanced education schools is the longstanding controversy on text book prices. Students argue for public domain texts, on-line publishing, on academic topics, all of which are no-cost or substantially reduced costs to hard-copy text books (which also happen to cost ten times more than a current best-seller). The UCD Chancellor ultimately rules on all procedural matters involving its on-campus book store and text-book selections and options. Where’s the grey?
” Conflict of Interest laws and administrative controls has been in existence for many years, for every non-college public servant with budget authority.”
Sadly, they really haven’t stopped city managers, department heads and council persons from skirting them, and setting up sweet schemes to enhance their retirements and insuring lucrative contracts for their kin. I agree, Katehi’s conflict is cut and dried.
“Further, a subsequent revelation of another sweetheart deal with text book publishers earned her an additional $420,000 from 2012-2014,” he said.
“UC data shows that she spent 168 hours during the 2012-2014 fiscal years on work with Wiley.”
My arithmetic shows $420,000/168 hours = $2500/hour.
This ought to help give students incentive to graduate and make all the right moves in the corporate world, and the all-infalliable invisible hand will reward them too!
Has UCD signed any new contracts with any of the companies that she is associated with since she signed on with them?
What did she do at these places? Did they hire her at DeVry to clean it up or to legitimize the program that exists? Was the textbook company after her expertise in using technology to lower prices or was she hired to resist lowering them? I have no idea but a leader who doesn’t follow the rules fails the fundamental test of leadership by example.
As for Assemblymember McCarty it might have been better to wait until the hearings to call for the resignation of Katehi. Maybe the hearings will offer some explanation or answers to the questions above. Still its hard to see her survive this one. How does she build a new campus in the district of a legislator who has lost his confidence in her?
The University President’s Office must formally bless any chancellor’s participation as a board member outside the university environment. Katehi failed to comply with this requirement with De Vry, and the President’s Office made this declaration within hours after this controversy became a press item.
The Sacramento Bee then quickly discovered that the UCD Chancellor has been on John Wiley’s Publishing Board for the past four years and received several hundred thousand dollars for her participation. Exercising due diligence, the Bee again contacted the University President’s office and asked if Katehi was given permission by the President to join forces with Wiley. Days later, still no reply. One wonders how the University of California President is enjoying her weekend.
The Chancellor is one of the many people in the Administration who think they “deserve” the salaries of private institutions, like Stanford, or UCLA. Even J Napolitano had to be enticed to serve at UC, which is a stretch, but for the UC Administration of Major Defense Contracts worth billions.
Ms Katehi has been sliding the scale of Admissions toward foreign and out of state students, so the income keeps going up.
Pretty sweet she can double her salary in one month (168 hours is a short month, and she of course sits in her office and uses her own stationery for that work too). This also is why she thinks she “deserves” more money. She has lots of colleagues with the same complaint.
This is no suprise. It is this and the obscene pay and benefits of some private sector CEOs that contribute to a nation of voters fed up and disgusted and turning to candidates like Bernie Sanders and Donald Trump.
The difference is that Katehi and most other public sector executives do not have any downside financial risk related to their positions. They don’t have real skin the game but they play it like each money-making opportunity is legit.
I beleive we need new rules that prevent any city, county or state public official from making more than the governor, and any federal public official… including executives in charge of any GSE… to not be allowed to make any more than the President.
“I beleive we need new rules that prevent any city, county or state public official from making more than the governor, and any federal public official… including executives in charge of any GSE… to not be allowed to make any more than the President.”
Maybe we should do the same for the public sector as well. After all, then everyone would have enough if all the excess were redistributed ( spoken with tongue only partially in cheek).
Perhaps Katehi gave up the wrong jobs.
Well said!
It’s never enough is it? To take in salary and stock more than her full time extremely generous salary to full time run UCD from a private school under investigation and a text book and material provider to our students for high profit is a blatant conflict of interest. I will always believe she not only ignored warnings but actively encouraged if not ordered the pepper spray disaster which humiliated the school and our entire community, after which she should have been fired. But don’t look for any faculty at UCD to challenge her on this. They also are able to take large salary and benefits to do private work. Even our legislators would not and cannot by law lobby the government while in office. She needs to go. Now
Do the people also know her breakfast and a lot more gets catered every morning, delivered to her University owned home right across the street from campus?
In her bio, it mentions she came from Chicago, after her Electronics genius garnered several patents which should be also paying her handsomely.
Nice life.
I suspect, but do not know, that the lion’s share of her patent royalties go to her former employer.
Why does she lie? . . . is it her greed?
Miwok
“Do the people also know her breakfast and a lot more gets catered every morning, delivered to her University owned home right across the street from campus?”
This is a sincere question since I am certainly no fan of Ms. Katehi. But as long as she is paying for it, I honestly don’t care if all of her meals are served catered. Do you have information that she is not paying for this service or is charging it to the university ?
I have heard, from authoritative sources, that she often sends her Mrak Hall staff out to get her coffee in the nearby campus coffee kiosk (probably at King Hall), and never reimburses them.
While she deserves recognition for all the funds she has brought to the campus, my understanding is that very few staff and faculty like working with her.
I am sorry to see this news. If the Chancellor retains her position, I hope that she concentrates on the needs of the UCD campus and its students, like building significantly more on-campus student housing.
If…
The more I read about this I believe Katehi needs to resign. She has the appearance of just trying to hang onto her job instead of being a strong leader of the institution. This is evidenced by her recent cave in to the Black Diaspora demands and her immediately quitting her two moonlighting jobs when outed. IMo she’s lost too much respect to be a an effective leader.
Yeah. The same University that can’t build enough housing on 5,000 acres that it already owns, because it’s too costly to adhere to labor rules that apply to the University. In the meantime, collect questionable $ for yourself, and push housing needs for students onto the city. (Make the city pay for it, instead.) Sounds like a plan!
Should work even better now, with the city’s new staff member (from the Cannery development, no less)!
The Linda Katehi situation is a symptom of the problem and not the cause of the problem. Henry Yang, U.C. Santa Barbara chancellor, is having problems as well.
What we are dealing with is U.C.’s misuse of its publicly-granted autonomy. It has been increasingly seeking private resources since 1970 to carry out its public function. With the result that private sector corporations now lead the way as to how U.C. spends those public moneys. Naturally you end up with scandals such as the Katehi and Yang ones.
When U.C. was granted autonomy, perhaps it made sense to grant autonomy, since what expertise does the public have in setting appropriate academic direction? And the assumption was that U.C. would set that direction in the interest of the public–so granting autonomy made sense.
Unfortunately the severing of the link between State action and U.C. action, while having the State continue to fund U.C., has resulted in an unwarranted subsidies being extended to private corporations. With U.C. increasingly neglecting its academic duties of research in the public interest and teaching students critical and general thinking instead of only instilling technical skills.
Therefore, U.C. has weakened the reason for having autonomy and has strengthened the State and public’s reason for taking that autonomy away. The Katehi and Yang problems indicative of a much larger problem, we will have to eventually address as our public assets are increasingly exploited for private ambitions.
Jim–Excellent post! You have stated several very important inter-related problems that I’ve also observed or have strongly suspected.
“With U.C. increasingly neglecting its academic duties of research in the public interest and teaching students critical and general thinking instead of only instilling technical skills”–spot on, you took the words from my mouth! The universities have gradually morphed into corporate training camps that are mainly teaching sets of technical procedures; mainly how to press the right buttons with the right software on which techno-gizmo. Not that such skills are not important these days, but in the past these sorts of lower level skills would have been learned fairly quickly on the job; but of course corporations want to reduce the expense of any kind of employee training or break-in ramp-up period, and you are expected to hit the ground running on day 1 for many types of jobs.
I think its important to have more such discussions on the long-term implications of the corporatization of universities–my own view is that in the short term, yes it can help the bottom line of the companies; but in the long-term there is a large detriment; both on a personal and spiritual level for the employee; and on the bottom line for the corporations that are interested in little beyond fully compliant latest-version de-bugged techno-serfs.