Report Hammers Katehi in Some Places, but Exonerates Her in Other Places

With the investigative report completed, UC President Janet Napolitano on Tuesday sent a message to UC Davis faculty, many of whom have remained in support of Chancellor Katehi.  In it she wrote that, on April 25, she met with the chancellor to discuss what she called “a series of misjudgments and policy violations of such a serious nature that she should resign her position as chancellor of UC Davis.”

“Regrettably,” the president writes, “Chancellor Katehi refused to resign and made public statements to campus leadership and others that she intended to remain as chancellor.  I then placed Chancellor Katehi on immediate administrative leave and authorized the hiring of an outside firm to investigate a number of concerns.”

The report, President Napolitano says, “found numerous instances where Chancellor Katehi was not candid, either with me, the press, or the public, that she exercised poor judgment, and violated multiple University policies.”

She writes that the chancellor has now offered to resign and that resignation has been accepted.

“These past three months and the events leading up to them have been an unhappy chapter in the life of UC Davis.  I believe it is in the best interest of the campus, the Davis community, and the University of California that we move forward,” she writes.

Chancellor Katehi will now transition to become a full-time faculty member.  UC Davis will conduct a national search for a new chancellor and Ralph Hexter will remain as interim chancellor.

The report looks at six specific allegations.

First, the employment of Chancellor Katehi’s son and daughter-in-law.  The report notes, “In discussing allegations of nepotism raised by the press. Chancellor Katehi advised President Napolitano that there were ‘no issues’ related to the employment of her family members. If Chancellor Katehi intended to convey to President Napolitano that there were no issues with respect to her involvement in her son’s and daughter-in-law’s employment, then her statements were accurate.”

President Napolitano, however, “understood her to mean that there were no issues whatsoever with respect to their employment, which was not entirely accurate.”

However, the report concludes, “In any event, it does not appear that Chancellor Katehi attempted to intentionally mislead President Napolitano during their call on April 19, inasmuch as it does not appear she was aware of the specifics of any employment issues related to her son and daughter-in-law at that time.”

The social media and strategic communications contracts clearly generate most of the headlines.  The report summarizes, “The evidence gathered indicates that Chancellor Katehi minimized her knowledge of and role in certain social media and strategic communications contracts in her discussions with President Napolitano and the media.”

The findings here are that the chancellor “advised President Napolitano that she had nothing to do with the contracts and that they were all handled by the UC Davis communications. During these conversations. Chancellor Katehi conveyed the clear impression that she knew nothing of the contracts and that she was not involved in them.”

She told similar things to the Sacramento Bee editorial board.

The report finds, “The Chancellor’s statements were misleading, at best, or untruthful, at worst.”

The report summarizes, “In reality, Chancellor Katehi initiated UC Davis’ relationship with Nevins by unilaterally contacting an executive recruiter to find a social media consultant to help repair reputational damage caused by the 2011 pepper spray incident. She approved replacing Nevins with another company, Purple Strategies, which was recommended by the head of Strategic Communications, and when that engagement ended, she directed her Chief of Staff to find another company to continue the work. He in turn identified IDMLOCO, which was ultimately hired.”

It adds, “Although Chancellor Katehi did not negotiate the contracts or oversee the day-to-day work of the consultants, she advocated for or approved the hiring of each company, participated in meetings with each, and was aware of and reviewed their work product from time to time.”

On student fee revenues: “While the use of SASI [Student Activities and Services Initiative] fees for PE instruction was arguably inconsistent with the text of the SASI, the evidence establishes that any such inconsistency was inadvertent, had no substantive budgetary impact, was remedied shortly after being recognized, and resulted in a new control mechanism to help ensure the optimal allocation of SASI funds going forward. The investigation team identified no policy violations or management concerns related to the use of SASI revenues.”

On the issue of reimbursement of costs related to Chancellor Katehi’s travel: “There is no evidence of intentional misconduct with respect to Chancellor Katehi’s travel reimbursements in connection with her board service with John Wiley & Sons or trips to Greece. With one exception, the evidence shows that Chancellor Katehi sought reimbursement from UC Davis only for trips that included a substantiated University business purpose. The evidence further shows that, where Chancellor Katehi’s travel combined University and non-University purposes, she ultimately received reimbursement from the University for only University-related travel.

However, the report finds two violations with regard to reimbursements.  In one case they conclude that, while the practice violated policies, “Chancellor Katehi did not personally profit from this arrangement,” and in the second case, “It does not appear that Chancellor Katehi personally profited, or that UC Davis suffered a financial loss, as a result of these policy violations.”

Fifth, with respect to her service on the Wiley & Sons board: “Chancellor Katehi’s service on this Board was approved by President Napolitano’s predecessor, President Mark Yudof, and subsequently by President Napolitano.”  However, it admonished her because she has not, as promised in March 2016, donated the proceeds to a scholarship fund.

“Notwithstanding her promises, Chancellor Katehi has not to date established a scholarship fund or donated the stock proceeds. When interviewed by the investigation team on June 29, 2016, Chancellor Katehi indicated that she and her husband would re-evaluate whether to donate the stock proceeds in light of the investigation. Chancellor Katehi’s private spokesperson, Larry Kamer, later reiterated this to the press, stating that Chancellor Katehi and her family ‘will consider their options regarding charitable donations at the conclusion of the investigation.’”

With respect to DeVry, the report hits her for “disregarding” certain “information regarding government investigations and enforcement actions directed at DeVrv University, as well as other concerns about the for-profit education industry in general. Although she was aware of information that should have caused concern, at the same time she was unaware of other information because she did not exercise any meaningful due diligence before joining DeVrv’s Board of Directors.”

The report hits her for failing “to exercise diligence and judgment in 2012…” and noted, “Chancellor Katehi did not comply with University policies governing the reporting and approval of her outside professional activities.”

She is further criticized: “Following DeVry’s press release announcing her board membership, and in the midst of intense media scrutiny regarding the issue, Chancellor Katehi’s statements to President Napolitano were not candid. Chancellor Katehi told President Napolitano that she had not yet begun her service on the DeVry board, which was untrue. Chancellor Katehi had already attended two events related to her board service—an orientation for new board members at DeVry’s headquarters near Chicago and a board meeting in Florida just two weeks before her conversation with President Napolitano. It was during these meetings that Chancellor Katehi learned about some of the investigations and enforcement actions concerning DeVrv University, yet she failed to bring that information to the President’s attention in connection with seeking approval for board service.”

Finally, there is “no evidence that Chancellor Katehi retaliated or threatened retaliation against employees for their cooperation with this investigation or with UCOP.”

—David M. Greenwald reporting

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