Tag Archives: UC Regents

Hundreds of Students Attempting to Shut Down UC Regents Meeting Over Tuition Hikes

UPDATE (11:19 AM PT): After issuing a dispersal order to remove all students from the room, the Regents are voting on the budget now.

Cross-posted from Firedoglake and Dog Park Media:

About 500 students are currently blockading entrances to the University of California Board of Regents meeting at UC San Francisco this morning, where the Regents are scheduled to vote on a budget that presumes a 24 percent across-the-board increase on UC tuitions over four years. Picketing students have pledged to shut the meeting down.

According to Charlie Eaton, one of the organizers of the protest and co-author of a report released this week that charged the Regents with employing exotic financial instruments that doubled the UC system’s debt load over three and a half years, as of 8:45AM PT only a third of the Regents have made it inside the building. About 100 students are inside, according to Eaton.

At Governor Jerry Brown’s prompting, yesterday the trustees of California’s State University system postponed a decision on fee hikes and the Regents backed off a plan to raise fees on UC professional school students. But major tuition hikes for all UC students remain on the table. The Regents have voted to increase tuitions in all but two of the last eleven years, this year being one of the two.

Last week, California voters passed Proposition 30, which raises taxes in part to stem tuition hikes in the state’s UC and CSU systems. Student organizing and activism played a major role in the success of the Prop 30 campaign. Yet in the very first meeting of the UC Regents following the measure’s passage, the battle over tuition hikes is continuing unabated.

“These proposed increases are totally unacceptable, especially given the fact that the Regents leveraged student tuition hikes to enter into reckless interest rate swaps that created a huge part of UC’s financial mess in the first place,” said Eaton. “There will be no business as usual today for the UC Regents.”

Millions in Prop 30 Tax Revenues Will Be Diverted from Higher Ed to Wall Street, Thanks to Regents

Cross-posted from Firedoglake and Dog Park Media.

Millions of dollars in new tax revenue earmarked for the University of California system as part of the state’s recently passed Proposition 30 will instead be routed to major financial firms, because of bad bets made by a Wall Street-influenced UC Board of Regents.

Over the last decade, tuition and fees for undergraduates in the UC system have tripled, adding enormous debt burdens to UC graduates and pushing lower-income students into the already overburdened state college and community college systems, or out of higher education altogether. Members of the UC Board of Regents, which governs the system and which approved the tuition hikes, have blamed the increases on the bad economy and on politicians.

However, according to a new report written by five doctoral students at UC Berkeley, in the years preceding the 2008 financial collapse, members of the Board of Regents themselves had overseen “a qualitative shift in the financial practices of the University of California” by employing the same kinds of exotic financial instruments that precipitated the meltdown on Wall Street – primarily, bond issuances hedged by interest rate swaps.

An interest rate swap is essentially a bet that interest rates will rise. UC would issue a bond with a variable interest rate, then make regular payments to a third party (typically an investment bank) based on an agreed-upon fixed interest rate. The bank would then pay back to UC a dividend based on the variable interest rate of the original bond, if the variable rate were higher than the fixed rate. If the variable rate were lower than the fixed rate, then the money would go the other way: UC would owe money to the investment bank.

Between 2003 and 2007, the report explains, UC acquired interest rate swaps with five investment banks in order to issue over $600 million in bonds to finance development of medical centers on three campuses. Medical schools and hospitals are major profit centers for universities. As UC used debt financing to expand these profit engines, tuitions for students continued to rise. Since the risky contracts the Board of Regents entered into were made possible by the collateral afforded by UC student tuition costs and by the Board’s ability to jack up tuition and fees at its discretion, the same students whose ballooning debts and tuition payments to the university were making the UC system’s exotic financial bets possible were receiving no tuition relief from the university out of the profits generated by those bets.

The result of these complicated arrangements has become a familiar story since the 2008 meltdown. The Board of Regents’ pursuit of cheap money to increase UC profits left it exposed to the financial collapse. According to the report, UC’s risky bets have now cost it $57 million, which could rise to over $250 million over the next three decades. Between May 2007 and the end of last year, the Regents doubled UC’s debt load. The UC system is currently paying about three quarters of a million dollars per month to Wall Street firms as a result of the swaps.

Moreover, the LIBOR scandal earlier this year demonstrated that Wall Street bets against rising interest rates were in fact fixed by the banks. All of the interest rate swaps described in the report were based on variable rates determined by LIBOR. Through market manipulation by the banks, UC’s bets were guaranteed to be a raw deal for students, their families, taxpayers, faculty, university workers and anyone else associated with the university.

Like many other ripped-off institutional counterparties to LIBOR trades, UC has standing to sue the banks. But the Regents have not only failed to do so, they haven’t even tried to renegotiate the terms of their agreements, as other institutions have successfully done. The question is, why?

“UC Regents and management have provided no explanation for why they are not re-negotiating or litigating against Wall Street to re-coup losses on these swaps stemming from the banks’ illegal interest rate manipulation,” said Charlie Eaton, a UC Berkeley Sociology graduate student and one of the authors of the reports.

One possible answer is another sadly familiar story: The UC Board of Regents has become what the report describes as a “revolving door with Wall Street.” An increasing number of posts in top UC management and on the Board of Regents have been filled by former Wall Street bankers, the report explains, including a new CFO position created in 2009 and filled by Peter Taylor, who was the Managing Director of Public Finance for Lehman Brothers before he found himself out of a job following the firm’s spectacular collapse. Monica Lozano, a UC Regent, also serves on the Board of Bank of America, a position for which she has received approximately $1.5 million. Bank of America stands to make as much as $28 million from an interest rate swap at UC San Francisco, according to the report. B of A is also one of the banks under investigation for LIBOR manipulation.

Prop 30 was passed last week by California voters in part to stem the tide of perpetual tuition hikes and the rapid decline of public higher education in the state. But because of the Regents’ predilection for gambling with student tuition money, much of that new tax revenue will be routed away from tuition relief and toward the very Wall Street firms that – with the Regents’ help – created the financial crisis that accelerated the higher education crisis in California in the first place.

Since its founding, the UC system has always played a central role, both structural and symbolic, in making the California Dream possible. Over the last decade, it appears that the Regents leveraged that dream to make the UC system a player in Wall Street’s casino economy. As with any casino, the game was fixed. Now the rest of us are being forced to pay for their mistakes.

WINOGRAD–Gets Major Teachers Endorsement

I was overjoyed to see that a serious progressive, one who is COMMITTED to helping TEACHERS, is being supported by one of the most influential of our unions, UC-AFT. We need to STOP sending back to Washington the same old incumbents who can’t seem to separate themselves from their corporate sponsors. I personally think they should be registering as LOBBYISTS when they take so much money from the corporations.

Here’s the release I received:

Marina del Rey, CA, January 27, 2010  —  The University of California American Federation of Teachers (UC-AFT) has endorsed public school teacher Marcy Winograd for Congress in her challenge to Jane Harman in the 36thDistrict.  The union local represents 3,000 lecturers and librarians on ten UC campuses.  

Local President Bob Samuels said, “California needs to send a progressive vote to Congress.  Marcy Winograd is a proven supporter of higher education who will fight the current military expansion so we can fund education at the proper level.”

Winograd received her undergraduate degree in political science from UC Berkeley (1974) and her teaching credential from UCLA (1994).  Said Winograd, “I am proud to have the endorsement of colleagues working hard to restore world class education to California.  As a graduate of the UC system, I understand the importance of protecting and fully-funding one of our state’s most valuable assets – a distinguished public university system once affordable to all.”

Last year the UC Regents voted to hike fee increases 32%, despite massive campus-wide student walk-outs to protest the hike in fees and lack of transparency in the budget process. Winograd, a featured speaker at the November UCLA student rally, called on students and faculty to demand UC Regents lift the veil of budget secrecy to engage everyone in solutions. “The Regents meet with the blinds closed, while the students stand outside in the dark.  Let’s open up the books so we can see where the money is.  Without budget transparency, the larger community remains locked out of the problem-solving process,” Winograd told reporters, adding, “We should not be holding a funeral for the UC system, but celebrating its rebirth as one of the greatest educational institutions of all time.”

Said Samuels, “At UCLA they have given lay-off notices to most of the long-term lecturers, which could result in the cancellation of hundreds of classes.  They are also talking about suspending language requirements while increasing class sizes, threatening to close libraries, and limiting services.  In general, we are fighting the downgrading of educational quality.”

Winograd’s platform makes federal funding of higher education a top priority.  A 15-year veteran of the Los Angeles Unified School District, Winograd worked last year at Crenshaw High School, where she taught English and coached teachers on best literacy practices.

To learn more about the Winograd For Congress campaign, visit:

http://www.WinogradForCongress…

http://www.Facebook.com/Winogr…

http://www.Twitter.com/MarcyWi…

http://www.youtube.com/Winogra…

http://www.flickr.com/photos/w…

http://www.meetup.com/Winograd…

Contact:

Michael Jay

Campaign Manager, Winograd for Congress

[email protected]

Ph: (818) 445 4520

Cowardice and Fear of Honest Debate at UC Irvine

(An excellent comment by Former Asm. Hannah Beth Jackson of SpeakOut. The LA Times editorial is spot-on. Perhaps now would be a time for post-partisan Arnold to lead by voicing support for a legal scholar of the highest order. UPDATE: In the interim, Speaker Nunez has written Mr. Drake a letter (PDF) protesting the unhiring. Text of the letter in comments. – promoted by Brian Leubitz)

When I learned that UC Irvine had just hired Erwin Chemerinsky to become the first dean of their newly created law school, I was very impressed. It’s quite rare for any law school to get one of the greatest legal scholars of our day as its chief. To get someone of Chemerinsky’s stature to be the first dean of a new law school is an even greater coup. This is the real deal-  a person who is going to put a beleaguered UC Irvine on the map and very quickly.

I didn’t think for a moment, “Wow, and now we’ll start putting out progressive lawyers to match the thousands being rubber-stamped out of conservative institutions, like those overrunning the federal government and the executive branch, in particular.” What I thought, and apparently like so many others who have worked with  Chemerinsky or heard him speak, is that this University will become an institution of excellence and pride, with thoughtful and quality lawyers. With a dean of Chemerinsky’s reputation, this school will quickly put itself on the map. Go UC Irvine! … Not.

Just a week after announcing that the position had been offered to Chemerinsky, who then accepted the offer and planned to return to California after a 4 year hiatus at Duke University Law School,  the Chancellor  of UC Irvine, Michael V. Drake, rescinded the offer. This questionable act sets academic freedom and integrity back into the Bush era. Professor Chemerinsky is a great legal scholar, an academic expert who the L.A. Times says stands out not for his liberalism, but for “the intellectual rigor of his analysis and the effectiveness of his argument”.  For more on this excellent editorial, click here

Apparently he is too controversial and too independent for the Chancellor’s liking.  What?  You’ve landed one of the best constitutional scholars of our day, an expert in an area of the law which is fast disappearing into hysterical oblivion, and you decide he’s “not the right fit for the University”?  That, of course, begs the question: What is the right fit for this University?  Is it the embarassing controversies that have befallen the institution and in particular, its ethically challenged medical research facilities, that have plagued the school for over a decade? Is it the inadequate way UC Irvine handled the Muslim/Jewish furor this past spring? Or is it the school’s mediocre standing in the ranks of the University of California? Whatever the case, here comes an enormously well-respected legal scholar–by conservative and liberal scholars alike–to bring excellence to the school and he’s unceremoneoulsy dumped because the Chancellor suddenly decides he’s too liberal?  What has happened to academic freedom? When did it become wrong to express one’s beliefs and opinions—especially in defense of the constitution of this country? What happened to the pursuit of excellence in America-whether academia, politics or any other field of endeavor?

I am sure the irony of this is lost on very few. Here, in this day and age when the Bush adminstration has successfully stifled free speech, whether through FCC sanctions or uncontrolled wiretapping of people and organizations with whom it disagrees, we have seen our first amendment rights diminish almost daily. Whether through fear or intimidation, we are becoming a nation of lemmings. With the announcement that Ken Burns 14 hour documentary on war now has two versions, just in case the FCC disapproves of the language used by our soldiers in battle (as honestly portrayed in this documentary), we can only wonder what has happened to the most precious of our fundamental rights in this nation?

The irony here is that censorship is now being imposed by a public law school on a constitutional scholar because that esteemed scholar insists on exercising his constitutional rights. Is the fear of Professor Chemerinsky that he  will bring in legal scholars who will assure that the students at this school understand what those rights are and seek excellence in their pursuit of it? Isn’t that exactly what a law school is supposed to do? After all, what is freedom if it isn’t the right to speak out without fear of retribution or sanction? Isn’t public discourse and debate exactly what this nation is founded on and what has made this nation great?

Michael Drake should be ashamed. This is a travesty. As a long-time supporter of the University of California, I am both embarassed and outraged at this turn of events. As California taxpayers, I think we all should be so.

The Regents of the University of California must take action. Their duties require nothing less than a full investigation of this matter, and the reinstatement of Professor Chemerinsky to the position he had been offered and had accepted. As conservative legal scholars are quickly coming to his defense, it is clear that this injustice and embarassment must be rectified. 

If the University of California is to continue serving the people of California as the place where ideas and values are to be nurtured and promoted, where excellence in academia is pursued, where intellectual discourse is encouraged without fear or retribution, it must respond. If there is, indeed, any legitimate justification for its recission of Chemerinsky’s contract, then the University must divulge it and explain its actions fully. Anything short of that only reinforces the taint on the Chancellor’s actions. Otherwise, this act will be viewed as a dangerous precedent that will only weaken the University, both as an academic institution and as a bulwark of academic freedom.

With all the scandals it has endured recently, the Board of Regents must stand up quickly and loudly in the defense of its fundamental mission of seeking excellence and intellectual honesty. And, by the way, in this instance, it’s all about our Constitution as well. Maybe somebody with public responsibilities today will take a stand to protect that document. We can’t expect that from our Congress, apparently, but we can expect and demand it from our UC Regents. Time to act, folks, our academic integrity and future are at stake here.