{"id":1798,"date":"2007-06-01T01:22:00","date_gmt":"2007-06-01T07:22:00","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/2007\/06\/endorsement-of-developers-project-raises-further-questions-about-how-aggie-coach-is-being-paid\/"},"modified":"2007-06-01T01:22:00","modified_gmt":"2007-06-01T07:22:00","slug":"endorsement-of-developers-project-raises-further-questions-about-how-aggie-coach-is-being-paid","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2007\/06\/endorsement-of-developers-project-raises-further-questions-about-how-aggie-coach-is-being-paid\/","title":{"rendered":"Endorsement of developer’s project raises further questions about how Aggie coach is being paid"},"content":{"rendered":"

\"\"<\/a>In light of a recent increase in his compensation, a few eyebrows went up when New Mexico State Aggies\u2019 basketball coach Reggie Theus<\/a> showed up at a Las Cruces City Council<\/a> meeting last week to speak in favor of a controversial development. <\/p>\n

<\/o:p><\/p>\n

The university announced three weeks ago a $100,000 increase in Theus\u2019 annual compensation, bringing it to $446,000. The raise is contributed entirely by the private sector and, because the donations are funneled through the NMSU Foundation<\/a>, the university won\u2019t release the names of the donors.<\/p>\n

<\/o:p><\/p>\n

\"\"<\/a>The Board of Regents also approved three weeks ago a restructuring of President Michael Martin\u2019s<\/a> contract that includes deferred compensation and an optional housing allowance paid by private donors. I wrote at the time<\/a> that both moves were controversial because the secrecy has the potential to hide impropriety.<\/p>\n

<\/o:p><\/p>\n

Ten days later, Theus surprised many by waiting more than four hours during the council\u2019s meeting for the chance to endorse The Vistas at Presidio<\/a>, a 6,000-acre development proposed by Philip Philippou.<\/p>\n

<\/o:p><\/p>\n

\u201cI\u2019m here in support of Philip Philippou in the sense that I think he\u2019s become a friend of mine,\u201d Theus told councilors. \u201cI think he\u2019s a man of integrity and he\u2019s someone that I know has the best interest of this city at hand.\u201d<\/p>\n

<\/o:p><\/p>\n

Before leaving the meeting, Theus, Las Cruces<\/st1:place><\/st1:city>\u2019 biggest celebrity, gave Philippou a hug.<\/p>\n

<\/o:p><\/p>\n

Since then, several people have called and e-mailed me to ask me whether Philippou is helping pay Theus. It\u2019s a question I can\u2019t answer. As long as the information remains secret, however, such actions by Theus will be viewed by many with skepticism.<\/p>\n

<\/o:p><\/p>\n

Widespread practice has been controversial<\/span><\/p>\n

<\/o:p><\/p>\n

\n

While the University<\/st1:PlaceType> of New Mexico<\/st1:PlaceName><\/st1:place> does not supplement salaries of high-ranking officials with donations from the private sector, across the nation, the practice is commonplace. In 1998, one study found that a third of public university presidents received supplemental compensation through university foundations.<\/p>\n

\n

<\/o:p><\/p>\n

Though most state university foundations try to keep their donor lists secret, it\u2019s not uncommon for courts to order the release of records. In a 2005 article published in the Journal of Law and Education<\/a>, Scott Reinardy and Charles Davis examined a number of court cases and attorney general opinions from around the nation and concluded that \u201ccourts in most states would find such foundations public agencies for purposes of freedom of information laws\u201d and would require them to release donor lists and other financial records.<\/p>\n

<\/o:p><\/p>\n

In recent years, courts in at least six states have opened the books of university foundations in response to lawsuits. The question has often come down to whether foundations that are non-profits set up to benefit public institutions are truly operating as separate entities or are acting as de facto state agencies that are subject to public records laws. It\u2019s an important distinction because the federal government allows non-profits to keep donor lists secret.<\/p>\n

<\/o:p><\/p>\n

Since university foundations exist solely for the benefit of the schools to which they are tied, there\u2019s a fine line between operating as a non-profit and a state agency.<\/p>\n

<\/o:p><\/p>\n

According to the Council for Advancement and Support of Education<\/a>, issues critical to the distinction include \u201cindependent governance, use of university office space that is not rented at fair market rates, service of university employees that is not covered by quid pro quo agreements, handling of state funds, and the specific terms of the operating agreement between the foundation and institution.\u201d<\/p>\n

<\/o:p><\/p>\n

In denying my request for the names of the contributors to the compensation for Theus and Martin, Rebecca Dukes, who is both the university vice president for advancement and director of the NMSU Foundation, said \u201cdonor records are private and those gifts are given to New Mexico State University Foundation, Inc.,\u201d which she wrote is a \u201cseparately incorporated\u201d non-profit, \u201cnot a governmental agency.\u201d<\/p>\n

<\/o:p><\/p>\n

She did provide me with the foundation\u2019s agreement with the university<\/a> and its 2005-2006 audit. She also directed me to the university\u2019s 2005 annual tax form<\/a>, which is public record and contains a lot of information about how the foundation operates.<\/p>\n

<\/o:p><\/p>\n

\n

Foundation gets free services and facilities use
<\/span><\/p>\n

<\/o:p><\/p>\n

In the 2005 fiscal year, the foundation had assets of almost $70 million, a figure that increased to more than $82 million in 2006.<\/p>\n

<\/o:p><\/p>\n

The foundation has no employees. University staffers do the foundation\u2019s work, and the foundation reimburses the university for salary expenses \u2013 more than $859,000 in 2005 and $1.1 million in 2006. Some NMSU employees work exclusively for the foundation; others split their time between foundation and NMSU.<\/p>\n

<\/o:p><\/p>\n

The university provides a number of services to the foundation for free or at discounted rates. According to the foundation\u2019s agreement with the university, utilities, maintenance and repairs and property insurance are provided by NMSU, as are data processing, telephone service, \u201csome consumable office supplies,\u201d and \u201croutine business and financial services.\u201d<\/p>\n

<\/o:p><\/p>\n

The estimated value of services and use of facilities NMSU donated to the foundation during the 2005 fiscal year was $107,762, according to the public documents. In 2006, it was $151,412. The university also paid administrative fees to the foundation in 2005 totaling $374,304 and in 2006 totaling $396,731.<\/p>\n

<\/o:p><\/p>\n

Such financial assistance isn\u2019t a one-way street, according to Martin. He said the foundation owns an office in Santa Fe<\/st1:city><\/st1:place> that the university uses without paying \u201cfull rent.\u201d<\/p>\n

<\/o:p><\/p>\n

In addition, the university president has some direct control over the foundation. Major fundraising campaigns have to have his approval. Martin is also Dukes\u2019 boss.<\/p>\n

<\/o:p><\/p>\n

Martin said the foundation\u2019s relationship with NMSU isn\u2019t unique.<\/p>\n

<\/o:p><\/p>\n

\u201cThis is the way all universities do it,\u201d he said.<\/p>\n

<\/o:p><\/p>\n

Is foundation operating as a public body?<\/span><\/p>\n

<\/o:p><\/p>\n

The New Mexico Inspection of Public Records Act<\/a> defines \u201cpublic body\u201d as \u201cthe executive, legislative and judicial branches of state and local governments and all advisory boards, commissions, committees, agencies or entities created by the constitution or any branch of government that receives any public funding, including political subdivisions, special taxing districts, school districts and institutions of higher education.\u201d<\/p>\n

<\/o:p><\/p>\n

It would be up to a judge to decide whether that includes the NMSU Foundation. Do the contract fees paid by NMSU and the donated services and use of facilities amount to \u201cpublic funding?\u201d<\/p>\n

<\/o:p><\/p>\n

Despite what courts in other states have determined, Phil Sisneros, spokesman for the state Attorney General\u2019s Office<\/a>, didn\u2019t seem to think aspects of the foundation\u2019s relationship with the university would matter.<\/p>\n

<\/o:p><\/p>\n

\u201cThe foundation is not subject to the Inspection of Public Records Act, which means that they\u2019re not required to disclose donor lists,\u201d he said.<\/p>\n

<\/o:p><\/p>\n

Bob Johnson, director of the New Mexico Foundation for Open Government<\/a>, said changing that \u201cwould require a lawsuit and a ruling by the Supreme Court, or some legislation.\u201d He said state university foundations should have to open their books.<\/p>\n

<\/o:p><\/p>\n

\u201cI think that they\u2019re skirting the law, and I think without legal action or legislative action they\u2019re able to do it,\u201d he said.<\/p>\n

<\/o:p><\/p>\n

Why does it matter?<\/span><\/p>\n

<\/o:p><\/p>\n

Some argue that if donors lose their anonymity, a number of potential contributors will refuse to give. According to the article by Reinardy and Davis, when the University<\/st1:placetype> of Louisville<\/st1:placename> in Kentucky<\/st1:place><\/st1:state> was forced to open its records in 2003, it was revealed that, out of about 45,000 donors, 62 had requested confidentiality.<\/p>\n

<\/o:p><\/p>\n

The article also cited examples of three university foundations whose fund-raising efforts were not deterred by court rulings that opened their books. Eastern<\/st1:placename> Michigan<\/st1:placename> University<\/st1:placetype><\/st1:place>\u2019s foundation reported an increase in assets from $20 million to $25 million a year after its records were made public in 1997.<\/p>\n

<\/o:p><\/p>\n

The universities of Toledo<\/st1:city> and Louisville<\/st1:city><\/st1:place> also increased their assets significantly after their books were opened to the public.<\/p>\n

<\/o:p><\/p>\n

A number of abuses have been revealed by the opening of records. For example, according to Reinardy and Davis, opening the books of the University<\/st1:placetype> of South Carolina Foundation<\/st1:placename><\/st1:place> in 1991 revealed that the school\u2019s president was illegally spending foundation money in violation of tax laws. He later pleaded guilty to tax evasion.<\/p>\n

<\/o:p><\/p>\n

Audits have revealed other problems. At Grambling<\/st1:placename> State<\/st1:placetype> University<\/st1:placetype> in Louisiana<\/st1:place><\/st1:state>, an audit found in 2000 that more than $1.5 million intended for the university was given to the foundation in violation of the state constitution. At Florida<\/st1:placename> Atlantic<\/st1:placename> University<\/st1:placetype><\/st1:place> in 2003, investigators found that $42,000 had been allotted by the foundation to buy a Corvette for the outgoing university president. The foundation\u2019s chief fundraiser later pleaded guilty to falsifying records for trying to mask the expense.<\/p>\n

<\/o:p><\/p>\n

What happens next?<\/span><\/p>\n

<\/o:p><\/p>\n

The current agreement between NMSU and its foundation was approved by the regents in 1991, and Dukes called it \u201coutdated.\u201d The university is in the early stages of constructing a new agreement that will address services the university provides the foundation and other matters.<\/p>\n

<\/o:p><\/p>\n

The new agreement probably won\u2019t open donor lists to the public. Not only do university officials believe they have a right to keep such information secret, but the foundation also promises donors, in its Donor Bill of Rights<\/a>, \u201cconfidentiality to the extent provided by law.\u201d<\/p>\n

<\/o:p><\/p>\n

Without a lawsuit or legislation, or an attorney general opinion that would have to be requested by a lawmaker, the public isn\u2019t likely going to learn who is helping the university pay Theus and Martin.<\/p>\n

\n

\n

A prior version of this posting incorrectly stated that Grambling<\/st1:PlaceName> State<\/st1:PlaceType> University<\/st1:PlaceType> is in Iowa<\/st1:place><\/st1:State>. It also incorrectly stated that NMSU is the first school in New Mexico<\/st1:place><\/st1:State> to use private donations to boost the compensation of high-ranking employees.<\/p>\n

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In light of a recent increase in his compensation, a few eyebrows went up when New Mexico State Aggies\u2019 basketball coach Reggie Theus showed up at a Las Cruces City Council meeting last week to speak in favor of a controversial development. The university announced three weeks ago a $100,000 increase in Theus\u2019 annual compensation, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1798","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1798","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/comments?post=1798"}],"version-history":[{"count":0,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/posts\/1798\/revisions"}],"wp:attachment":[{"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/media?parent=1798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/categories?post=1798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nmpolitics.net\/index\/wp-json\/wp\/v2\/tags?post=1798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}