Yesterday students, teachers, and labor unions joined in protest across California. From San Diego to Sacramento the message was clear – public education is an important public good and tuition hikes and budget cuts threaten that. No doubt you probably knew about the day of protest already. Almost everyone in California is touched in some way, shape or form by the public education system. A system that used to be described as a crown jewel of public education.

Peter Byrne continues his investigation into the regents financial holdings and what, if any, overlap they might have with the UC investments. He hopes to be done with his reporting by the end of the month. The media was certainly out in force covering the protest, but few are asking the tough questions. At Spot.Us we are proud to be supporting Peter as he goes beyond media hype and easy coverage of this issue. We hope you join us in supporting his work. Every small contribution helps.

Meanwhile: Spot.Us has collected some other coverage of the protests from around the state. Enjoy the articles below along with YouTube clips and photos.

David Cohn was at the Civic Center protest and grabbed some photos and video.

And nine short YouTube videos

UC Santa Cruz Protest Draws Nearly 1,000 Students – Neon Tommy
blogs.uscannenberg.org
The largest on campus protest was probably at UCSC which virtually shut down the school with 1,000 students. By noon, a large rally formed with students yelling “Student Power!” (YouTube).

March along Telegraph – a set on Flickr
flickr.com
A Flickr set of photos of the march along Telegraph Ave

From Santa Barbara
thedailysound.com
The rally and march, dubbed March Forth on March 4, began at noon at UC Santa Barbara, where about 400 students railed against state budget cuts that have resulted in 32 percent hike in student fees. From there, four bus loads of university students were taken to De la Guerra Plaza, where they joined with hundreds of students and teachers in the Santa Barbara School Districts for a march up State Street to the Santa Barbara County Courthouse Sunken Gardens

UC Berkeley Blackout Protest

YouTube
A look at racial issues tied to the UC protests.

Education Crisis: Behind the March 4 Day of Action
oaklandlocal.com
California spends $2,400 less per student than the national average and ranks 47th in per-pupil expenditures compared with other states, according to the Oakland Unified School District’s Every Student Blog. The state also ranks at the bottom of barrel for staff-to-student ratios. According to the blog, California cut money for education by $18 billion for 2008-09 and the first half of the current school year. As a result, each classroom has lost about $11,750.

UC Irvine March 4 Protest 3

YouTube
Students block traffic at the intersection of Campus and University.

KALW News Erica Mu gives a blow by blow on her blog.

Cal Students Rally to “Educate the State” on Day of Action

YouTube
From Youth Radio: UC Berkeley students, their parents, faculty, and labor unions rallied and marched from Berkeley to Oakland as part of a statewide Day of Action protesting fee hikes and budget cuts in state educat.

Protests Spotlight UC Fee Woes

YouTube
“There is not an atmosphere of cooperation with the legislation because there is an aura of secrecy within the UC system” Senator Leland Yee – at 1:10 into the video.

From the AP: Millions Protest Education Cuts in California

YouTube
Millions rallied across California to protest deep spending cuts to schools and universities. Demonstrations, marches, teach-ins and walkouts were planned in what was called the “March 4th National…

Shutting down 880
SFGate.com
More than 150 protesters were arrested on Interstate 880 in Oakland after using an exit ramp to walk onto the freeway and shut it down for nearly an hour. Many wore black, identified themselves as anarchists and carried a banner that read, “Occupy everything.”

In San Diego
San Diego Union Tribune
At San Diego State University, the University of California San Diego and other campuses, students, faculty and staff members banded together in anger over the budget upheaval, saying it undercuts the state’s 50-year-old promise to provide students with an affordable, quality education.

Lesson in SF grade schools: protest education cuts
sfpublicpress.org
Many students intending to begin the protest early were initially going to do so as a school-organized field trip, with fellow students and teachers, until the superintendent’s office issued a memo Friday banning field trips to the march, citing of safety concerns. “The notice came out on the 26th, very late in the organizing, and since then we have had a lot more families come on board to be part of the march,” said Adrienne Johnstone, a teacher at San Francisco Community School. She said many families were “coming to take their kids out of school early.”

NPR station KPCC in Los Angeles reports:
scpr.org
Audio interview with the following guests. Adolfo Guzman-Lopez, KPCC’s education reporter John Travis, Chair of California Faculty Association’s political action committee, Professor of Political Science at Humboldt State Issamar Camacho, By All Means Necessary (BAMN) Organizer at UC Berkeley, at UCLA today Joaquin Beltran, Associated Students President at Cal State Los Angeles. He will also be emcee of the Pershing square rally at 5pm. Steve Boilard, Director, Higher Education in the California Legislative Analyst’s Office Jack Scott, Chancellor, California Community Colleges H.D. Palmer, Deputy Director of External Affairs, California Department of Finance

UCSC protesters stream toward downtown Santa Cruz again…
San Jose Mercury News
The protest at UCSC continues.

Protest outside my office – UC Berkeley

YouTube
Video of the UC Berkeley Protest – March 4th, set to calm music

By Peter Byrne
Photos/video by Monica Jensen, multimedia editor of SF Public Press

This is an update on the progress of the Spot.us-sponsored investigation into possible conflicts of interest among the Regents of the University of California. This is a community funded reporting project. You can support it at the link above.

On January 8, the regents held their bi-monthly meeting at the Mission Bay campus in San Francisco. The building bristled with armed guards—both uniformed and in plain clothes.

The regents, many of whom are multimillionaire financiers (view the Regent’s form 700s online), appeared worried that students and workers might engage in acts of civil disobedience because the governing board had recently raised tuition by 30 percent, while continuing to spend hundreds of millions of dollars on such non-educational projects as a sports stadium retrofit.

Incensing furloughed employees, the regents have rewarded top university executives with $3 million in bonuses—on top of 25 percent pay raises—while the salaries of professors and instructors are reduced, and core educational programs are eliminated or cut to the bone. The pay of janitors and service workers has been slashed by 15 percent, causing further hardship to families already afflicted by recession. From Los Angeles to Berkeley, workers, students, and professors are accusing the regents of union-busting and de facto privatization of a public institution. They complain that corporate and military research and multinational investment agendas are being funded at the expense of the general curriculum and student admissions. The university has discarded its mandate, they say, of educating the masses, affordably—and is transforming a publicly-funded institution into a school of the elite.

State senator Leland Yee has been asking hard questions of the regents—questions about excessive pay scales for executives while education is being cut back, and questions about how the regents invest UC’s pension and endowment portfolios–worth$53 billion. Before the meeting began, Yee was in the lobby chatting with Lakesha Harrison, president of the service worker’s union, Local 3299.

I had a chance to ask Yee and Harrison how they felt about the regents investing billions of public dollars with financial firms with ties to some of the regents (see Yee interview near the bottom).

But, first, some background information.

Let’s start with Regent Paul D. Wachter.

Since the early 1990s, Wachter has been Governor Arnold Schwarzenegger’s main business partner and personal investment advisor. One of the governor’s first acts in office was to appoint Wachter as a regent. Since then, he has been a leading force on the board’s investment committee, which currently oversees $53 billion in public and private equity investments.

The governor is himself an ex-officio member of the board of regents. This means he does not vote on matters before the board, but he has access to information available to the regents and their staff (but not to the public). He clearly has the ability to privately lobby his fellow regents. Many of these regents are campaign donors who Schwarzenegger rewarded by appointing them to the powerful board. But he is obligated by law to influence them in a manner that does not conflict with his private financial interests, which are valued at more than $100 million.

Thickening plot

It turns out that Regent Wachter is paid to administer Schwarzenegger’s blind trust. In theory, placing a government official’s assets in a blind trust prevents him from knowing what changes are made in his investment portfolio after he assumes office, so that he will not be tempted to use his governmental power for personal benefit. However, as a Salon.com investigation (by yours truly) showed a few years ago, it is not ethically logical to put your business partner in charge of your blind trust, especially when that partner is a close friend and political advisor.

Interestingly, many of Schwarzenegger’s real estate and business partnership holdings are not in the blind trust (which is mostly composed of publicly traded stocks). According to his annual financial disclosure statements, Schwarzenegger has a large ownership stake in a financial firm called Dimensional Fund Advisors (DFA). And since 2004, the regents have invested a third of a billion dollars in DFA.

DFA is an “index” fund (a type of mutual fund) created in Santa Monica, California during the early 1980s. It’s claim to fame was putting three Nobel Prize-winning economists on the board of directors. The Big Brains designed algorithms for efficiently pumping pools of public assets — combined with money fronted by wealthy, private clients — in and out of the stock market with (sometimes) better than average returns.

Wachter’s and Schwarzenegger’s financial disclosure statements from 2004 to the present show that each owns stock worth “more than $1 million” (no upper limit is specified) in the privately owned DFA, which controls a $160 billion investment portfolio, much of it funded by public pension funds. Schwarzenegger discloses “more than $100,000” in annual dividends from his ownership stake in DFA. He is reported to own five percent of DFA.

Indexfunds.com DFA Article

DFA stock is not publicly traded and ownership is available only to select institutions, company employees, and a few private investors.

In 2006, the UC retirement fund invested $226 million in a DFA “emerging market fund.” In 2007, this investment increased to $329 million. By the end of 2008, the value of the investment had fallen to $151 million. As of December 2008, the UCLA campus endowment fund had placed $82.3 million (nearly 8 percent of its total endowment) in three market funds offered by DFA.

When the stock market tanked in 2008, it appears that UC’s investments with DFA took a substantial hit–Nobel Prize winning smart guys notwithstanding. But DFA insulates its stockholders (e.g. Schwarzenegger, Wachter) from downturns in the market by charging large management fees to its investors (e.g. UC Regents).

The law of the state of California (Gov Code Section 87100) proclaims: “No public official at any level of state of local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”

The magnitude of the University’s investment with DFA, and the magnitude of Regent Wachter’s and Regent Schwarzenegger’s stake in DFA suggest that there a conflict between their personal financial interests and their public duties.

Wachter told Spot.us that the regents do not direct university staff to select specific investment fund managers. Rather, the regents decide the types and amounts of investments that are to be made, e.g. certain percentages of the total retirement fund are slated for private equity funds or emerging market funds, etc. Considering DFA’s size, he commented, “It is not surprising to see [DFA] represented in part in any endowment or pension fund.”

Neither Schwarzenegger, Dimensional Fund Advisors, nor the Regent’s press office responded to a request for comments. But it is remarkable that Schwarzenegger and Wachter allowed the UC Treasurer to invest hundreds of millions of public dollars with an investment management firm which they partly own. The regent’s investments with DFA were not a secret: they were publicly reported to the board. And Schwarzenegger’s and Wachter’s large stake in DFA has long been a matter of public record, so the Treasurer could easily have refrained from investing in DFA.

Conflicts at CALPERS

Since 2004, DFA has been paid about $4 million a year to manage about $1.5 billion in the California Public Employees’ Retirement System. CALPERS is one of the world’s largest public employee pension funds and is periodically afflicted by scandal. Recently, an internal investigation by CALPERS revealed that certain financial firms (but not DFA) were paying two former CALPERS board members to lobby employees to invest with those firms.

CALPERS also keeps a large portfolio of investments with an investment bank run by another regent, Richard C. Blum, who is the husband of U.S. Senator Diane Feinstein. Blum and Feinstein ran afoul of federal conflict of interest prohibitions during the early years of the War on Iraq as the senator micromanaged $1.5 billion in military construction appropriations that were awarded to two companies controlled by Blum. See “Senator Warbucks” and “Blum’s Plums.”

CALPERS also pays Blum’s real estate corporation, CB Richard Ellis, millions of dollars in management fees. Nice work, if you can get it.

As our investigation of the regents continues to develop, we will plumb Blum’s political pipeline into California’s public pension investment pools and beyond. And we will examine if the regents are invested in a series of nested private equity partnerships (aka “leveraged buyout” firms) tied to Wachter, Schwarzenegger, and Blum. We will paint a detailed portrait of the financial holdings of each regent; and continue to place public record databases online for all to see.

But first let ask Senator Yee and Ms. Harrison what they think about the regent’s investing hard-earned worker pension funds with DFA

YEE: “I’m not only surprised … its horrible, shocking … get all information out …”
HARRISON: “That’s despicable … destroying workers lives…”

Interview with Leland Yee by Peter Byrne

Interview – Senator Leland Yee by SpotUs and Peter Byrne

Interview with Lakisha Harrison.

Interview – Lakisha Harrison – President of Local 3299 by SpotUs and Peter Byrne

And now let’s visit the regent’s meeting and see what happens when members of Local 3299 implore the regents to listen to reason and stop cutting the salaries of manual workers while executives get quarter million dollar bonuses and politically-savvy investment banks run wild with retirement funds.

Notice Mark Yudof, president of the university. Between 10 am and noon his Twitter account registered numerous posts, such as “UC’s research performance tells world how UC is doing as a university … Regent Dick Blum tells those unhappy w. the budget: Don’t yell at Regents. Don’t yell at Mark Yudof. Yell at your legislators in Sacramento.”

Either Yudof was madly Twittering away under the table, when, you would think, he could have been doing something more productive to earn his $828,000 salary, or the university is paying a public relations flack to pose as the Yudof on Twitter.

Spot.Us and Peter Byrne continue to make headway on our investigation in the UC Regents. We now have a coailition of five publishers and 47 individuals who have raised close to $4,000 for our reporting efforts. Next week we will have a blog post update and soon after that – we will release some of the public documents we’ve requested to the internet for all to see (they are, after all, public documents). For now – here’s the latest from the inter-tubes.

An Honest Approach
The Daily Cal
After one day of last week’s meeting of the UC Board of Regents, Vice President for Budget Patrick Lenz dropped a bombshell: UC applicants could be put on wait lists system wide for the first time this spring. Sometimes, the most important part of judging someone’s actions isn’t what they do, but how they do it. And UC administrators did this one all wrong.

Students Defy Attack on Higher Education in California

Anual fees at the University of California in 1979 were $685. Thirty years later, they were $10,302 as the University of California’s appointed regents, who oversee 10 campuses throughout the state voted to raise fees by 32 percent, to begin next fall. Schools throughout the state’s three-tiered public education system—including hundreds of state schools and junior colleges—are also seeing fee hikes and program cuts.

West Coast Lessons: Don’t Give Universities Tuition Authority
Olympia Newswire
The University of California system has had the authority to set its own tuition rates for many years. In November 2009, after the state legislature made yet another cut to its already tight budgets, the UC Regents voted to increase student fees by a whopping 32% — bringing the cost of an undergraduate year at a UC school to $10,300 (and that’s before room, board, and books are included). In contrast, when I graduated UC Berkeley in 2000, I paid $4,400 a year.

Regent’s Meeting: students protest fee hikes

YouTube
Although the protest was late last year, this video was just uploaded last week. The impact of the tuition hikes are still being felt.
Tags: UC

University of California applications set record
The Modesto Bee
University of California campuses from Davis to San Diego saw dramatic increases in the number of transfer students applying for the fall of 2010, fueling a rise in applications statewide to their largest number ever despite steep hikes in student fees, according to data released Thursday by UC’s Office of the President.

‘A Budget You Can’t Believe In’
City on a Hill Press
The UC Board of Regents, the 26-member governing body of the UC system, met yesterday to discuss issues of the newly proposed budget. The regents, who meet six times each year at different campuses, specifically addressed the state’s possible increase in higher education funding. Student presence was markedly low compared to the last regents’ meeting, but UCSC’s Student Union Assembly external vice chair has high hopes for attendance at a March 1 rally in Sacramento. Comparing the governor’s recent proposal to last year’s, student regent Jesse Bernal said, “I wouldn’t say that I’m optimistic, but I’m less disappointed than last year.”

Regents to back UC students protest at Capitol
SFGate.com
After last fall’s angry and at times violent campus protests, it seems unlikely that rival students and leaders of the University of California would stand together to speak out on behalf of UC. But when students hold their big Day of Action in Defense of Public Education on March 4, converging on Sacramento to lobby lawmakers for sufficient funding, several members of UC’s governing Board of Regents and UC President Mark Yudof said Wednesday they’ll be there with them.

UC leaders wary of governor’s budget promises
San Jose Mercury News
University of California leaders on Wednesday expressed skepticism about Gov. Arnold Schwarzenegger’s proposed budget, saying he made unrealistic assumptions about federal money and still does not plan to give UC the funding it needs.

Waiting lists to be established at most UC campuses, regents say – latimes.com
Los Angeles Times
The University of California will break with tradition and establish waiting lists for freshman admission as it copes with uncertain state funding, officials said Wednesday.

UC Regents Propose Cutting Enrollment Again
kcbs.com
The state budget crisis is having a significant impact on the University of California, and now regents are taking a close look at lowering student enrollment.

UC regents to OK millions in exec incentive pay
SFGate.com
The University of California’s governing Board of Regents, meeting in San Francisco this week, is expected to formally approve $3.1 million in incentive pay to 38 senior medical center managers who last year met performance goals, ranging from improved patient safety and satisfaction to raising revenue.

Schwarzenegger Seeks Shift From Prisons to Schools
The New York Times
With his state strapped and his legacy looming, Gov. Arnold Schwarzenegger proposed on Wednesday to greatly reduce the amount of money California spends on its prisons and to funnel that sum to the state’s higher education system instead. City on a Hill press also weighed in.

Responding to the Governor
Universityprobe.org
In the short term, I see Schwarzenegger’s initiative as helpful in avoiding the rush to decision-making. The Regents’ Commission on the Future seemed to me as nothing more than a fig leaf to cover the push for faster privatization of UC.

President Yudof on 2010-11 budget proposal

UC President Mark Yudof tells what Gov. Schwarzenegger’s proposed 2010-11 budget means for UC and why it’s critical to speak out for full budget funding. Read transcript at http://www.universityof…
Tags: UC

Remaking the University
utotherescue.blogspot.com
A blog looking at the current UC situation. It’s filled with all kinds of useful tidbits and information.

How the UC Hides its Money
changinguniversities.blogspot.com
In notes from the Regents Committee on Finance meeting from Nov. 18 2009 , one sees how the UC is able to bring in a record level of revenue but still claim that it has no money.

Schwarzenegger Finds Chong a New Job
Rachelle Chong may have been kicked off the California Public Utilities Commission (CPUC) for messing with Universal Lifeline, but Arnold made sure she got a new state-funded position…..It doesn’t matter how many schools lose their funding, how many clinics close down and how many IHSS workers get axed – there’s always room in the budget for discredited political hacks.

University of California applications for fall admission jump
scpr.org
Applications from African-American and Latino students, especially from those who hope to transfer from community colleges and other schools, grew significantly. Applications from foreign students were also up.

UC Santa Cruz – Students are Present! Listen Up.
With a still camera, video camera and a whiteboard, students are voicing their thoughts, concerns and convictions by answering a single question, “How is the U.C. Financial Crisis Impacting You?” As students share their individual stories, a collective voice emerges, demanding quality and accessible higher-public education at an affordable price.

Workers strike picket against poverty wages

After months of deadlock over poverty wages with University of California executives, 85,00 service workers from ten UC campuses and five medical centers have begun strike picketing.

“UC wages are dramatically lower than other hospitals and California’s community colleges, which pay 25% higher wages on average. In addition, UC insist on passing on benefit costs, pushing families deeper into poverty.”

The employees are represented by the American Federation of State, County, and Municipal Employees (AFSCME) union, against which the Public Employment Relations Board issued a complaint for bad-faith bargaining. The Superior Court of San Francisco declared the strike illegal on July 11.

• More from SFist

New technology to ease parking pains in Cit

New technology to ease parking pains in City

The San Francisco Municipal Transportation Agency (SFMTA) will test a new technology in the Fall using wireless sensors to announce open parking spots on smartphones or street displays.

“The same sensors will be capable of monitoring the speed of traffic past the spaces, and that data will be transmitted as well.”

The SFMTA intends to use the data to create a dynamic server-to-meter price system that adjusts to demand.

• SF Weekly discusses the high costs of parking in San Francisco

Honduras runway fiasco tied to San Francisc

Responsibility for a recent airline incident in Honduras may be traced back to SFO Enterprises, formed by San Francisco International Airport, according to SF Weekly’s Matt Smith.

”This shady private company, set up nearly a decade ago by current airport director John Martin and his deputy, Leo Fermin, won a bid to privatize and manage Honduras’ airports based on a boast that SFO International Airport officials’ knowledge, prestige, and financial clout would bring this dangerous airport up to first-world standards.”

Despite the transfer of San Francisco city funds into Honduras, there was not enough to improve safety on its runway.

• Mark Pritchard gives his briefing

Board to vote on set-asides

The City board will vote July 22 to place a proposal to eliminate set-asides in the November ballot.

“Supervisor Chris Daly has asked the city attorney to draft an amendment to a charter amendment that would provide voters with the opportunity to eliminate all The City’s set-asides.”

Daly also proposed a new set-aside for affordable housing.

Set-asides, a way to allocate funding for specific programs each year, included “$200.9 million for a mandated staffing level at the Police Department, $137.4 million for children services, $75.5 million for public libraries and $1.6 million for the San Francisco Symphony” last year.

• More on set-asides from icallbs

Homeowners insurance surcharge may increase

Due to the high costs of fighting California’s wildfires, a plan to double the insurance surcharge for homeowners was approved by a joint legislative budget committee.

“Under the new proposal, homeowners in “high-risk areas” – which, between fires, floods and earthquakes, covers about 95 percent of the state – would have a 2.8 percent surcharge added to their policies.”

The plan would generate $280 million a year to cover the cost of disasters, most of them wildfires.

• More from Robert Cruickshank about the debate on who should pay for the costs of wildfires