The PBS News Hour uses the Frohnmayer family tragedy with Fanconi’s Anemia and the UO/FSU Rose Bowl game as a hook to examine the larger issue of research on rare diseases, here:
HARI SREENIVASAN: Dr. Summar, that attention, focus, there are 7,000-plus rare genetic disorders out there. And I’m going to feel a little callous saying this, but it’s almost the best thing that can happen is a celebrity gets it.
DR. MARSHALL SUMMAR, Children’s National Medical Center: In many ways, there’s some truth to that. …
HARI SREENIVASAN: Dr. Summar, what about these other 7,000 diseases? How do they gain kind of attention, especially from the pharmaceutical companies, right?
I mean, I hate to be a capitalist about it, too, but where’s the market? If it’s only 1,000 people or 500 people, do drug companies say, OK, we will take that risk and we will put in all that money into research and development and try to find a cure, vs. going after diabetes or cancer, right?
DR. MARSHALL SUMMAR: Well, that’s actually a great question, because, historically, they didn’t. They stayed away from the rare disease field. They figured there weren’t that many patients. There wasn’t much market. …
4/26/2010: What do gifts buy?
Greg Bolt of the RG will tell you that Pat Kilkenny has been working for UO without a written contract, just like Bellotti did. Not a surprise at this point. But why did Dave Frohnmayer ever put Kilkenny in charge of the UO athletics department, and let him decide how many millions of dollars – most of it public money, or tax deductible gifts – would be spent how, and on which coach?
These things are very complicated and involve lots of mutual respect and consideration of the public interest are usually about money.
Frohnmayer received $200,000 per year in pay from donors to the UO Foundation, and a special $150,000 bonus in 2009. These payments to Frohnmayer amounted to about 3% of the entire payout from the UO endowment that year.Who gave this money? What were the terms of the gifts? The Oregon Attorney General has ruled that the UO Foundation can keep this a secret.
But the IRS has released the data on donations from Pat Kilkenny’s “Lucky Duck Foundation” to Dave Frohnmayer’s Fanconi Foundation. Courtesy of the IRS and www.guidestar.org. Kilkenny gave $240,000 the year before Frohnmayer appointed him as Athletic Director, and another $100,000 each year since.
This is a sad story for everyone involved, in just about every possible sense. And no one would argue that Frohnmayer benefited financially from these donations to the Fanconi Foundation. But they create an obvious potential for a conflict of interest. Frohnmayer should have immediately made them public, and recused himself from any decisions involving Pat Kilkenny. Instead he kept quiet and then appointed him UO Athletic Director and gave him control of a budget of about $60 millon, mostly public funds. Not good, Mr. Frohnmayer.
I’ve got a bunch of new data on the UO Foundation from various sources, but haven’t had time to put it together. Fortunately Matthew Kish of the Portland Business Journal is on it, with several recent stories:
Christian Hill has the story in the RG, here. This development process will raise lots of questions about the secretive foundation, and perhaps will prompt some transparency from them. I’ll have more coverage in the coming weeks.
Chuck Lillis, the Chairman of UO’s new Board of Trustees, wants to raise $2 to $3 billion to get UO back on the AAU track. Gottfredson is not delivering. The word is his style does not go over any better with alumni than it does with students and faculty.
Now UO’s strategic communicators are doing their best to move the goalposts. I’m thinking that Mr. Lillis, who has been very generous himself and has called for the Trustees to develop quantifiable goals for Gottfredson’s next performance review, is not going to be fooled this easily:
Aug 19, 2013: Giving to the University of Oregon surpassed the $200 million mark during fiscal 2012–13, a banner year highlighted by a large increase in gift commitments providing student, faculty and research support. Individuals, companies and foundations contributed 41,460 gifts and pledges helping propel the university’s endowment to a record level. [2013 UO News link here.]
July 28, 2014: For the 2013-14 fiscal year, 77 percent of donors made gifts toward academic purposes. Individuals, companies and foundations made 49,904 gifts and pledges totaling $115,150,868, helping propel the university’s endowment to a record level. [2014 UO Around the O link here.]
From what I can tell the largest donation Gottfredson has brought in so far was $10M – for a new softball stadium. Seriously. More on the UO Foundation here.
6/21/2014 update: The Arizona Republic has the story here. No word on how much Duck money was involved.
2/1/2013: No Policy Update: Duck administrators fly south for Felony Bowl
UO has no policy on free tickets or travel – not exactly “best practices” when it comes to claiming it’s exempt income, folks.
From: “Thornton, Lisa”
Subject: Public Records Request 2013-PRR-185Date: February 1, 2013 12:28:59 PM PST
Dear [UO Matters]-
The University does not possess records responsive to your request for ” a copy of UO’s policies and/or procedures on paying for travel and tickets to away games and/or postseason games”, made 1/28/2013.
Thank you for contacting the office with your request.
Office of Public Records
1/28/2013: Ever wonder how the Ducks get our administrators to look the other way about the accounting tricks that leave the academic side holding the bag for millions in athletic department costs? Free junkets are part of it. The Fiesta Bowl has a long history of corruption, see here. Continue reading →
5/14/2014 update: The UO Foundation has told me that they will release their IRS 990 form tomorrow. This should have been made public no later than November 15, but the foundation requested and received two 3 month extensions from the IRS. Tomorrow is their final deadline. The form will include information on expenses, salaries for their highest paid employees such as Paul Weinhold and Jay Namyet, and some rudimentary information on what the foundation does with the money it manages for UO. Probably not much clarity on how much goes to the Ducks and how much to UO academics, but I’ll post what there is, when I get it.
11/20/2013 update: Two weeks ago I received a “demand for retraction” from Thomas Herrmann, legal counsel to the University of Oregon Foundation, regarding this post which I first published on 10/25/2013. (Page down to read the original post in its entirety.)
Great news – the Daily Emerald has the story, here. Not clear how much of this is for athletics, e.g. Knight’s ~$125M “Legacy Fund” or the $5M Robin Jaqua endowment that Johnson Hall let the jocks hijack.
For a tax-exempt non-profit, the UO Foundation releases very little data on how they spend money. Their IRS 990 was due 5 months ago, but they keep asking for extensions. I’m guessing they’ll release it on the last possible day: 5/15/2014.
They did release this info for the 2013 AY. It’s incomplete, but shows $21M for athletics, $723K for research.
Of course I mean the OSU Foundation, report here. In contrast, while the UO Foundation’s report for the fiscal year closing June 30 2013 was due Nov 15, they’ve filed for an extension until Feb 15, and they will presumably file for another, preventing the release of the IRS required information on revenue, expenses, and executive salaries until May 15 2014. They also haven’t released their standard annual report showing what they spent donor money on, usually out in September.
What’s that about? My guess is that UO’s special supplemental retirement plan for current and former executives and coaches was underfunded, so they hit up the Foundation for $7.2M to make up the difference. To put this in perspective, for 2011-12, the last year for which they’ve released data, the UO Foundation spent $7.0M on merit and need scholarships. Total payout from the endowment was roughly $21M. No wonder Paul Weinhold decided not to put out an annual report this year.
3) Transparency and accountability. If the UO achieves a new degree of
autonomy from the OUS and the Oregon Legislature, we are concerned that the
UO be held to high standards of administrative transparency. Section 9 of the
Legislative Concept states that
“The UO would continue to be subject to[…]the public governance provisions of state
law: The Public Records and Meetings Law, Government Ethics, Investment of
Public Funds, the Public Employees Collective Bargaining Act, Public Retirement,
and the Oregon Tort Claims Act. But the UO would be exempted from many of the
business regulations applicable to state agencies, such as the Administrative
Procedures Act.” (p30)
The New Partnership financial plan would create a large endowment to be
managed by the UO Foundation. It would thus shift oversight and accountability
from the Oregon Legislature and the OUS to the Foundation. This shift should
not occur without increased transparency from the Foundation. Donors, faculty
and students, and Oregon citizens should all demand greater scrutiny of the
Foundation’s investments and its administrative expenditures.
Needless to say the Foundation has done the opposite. They didn’t even put out an annual report this year, just the mandatory auditors statement. If the SBC has done any followup, I haven’t heard it, and what I can tell this 2010 report was their last report to the Senate, although their charge calls for annual reports on UO’s financial status etc.
Greatest passions: Oregon pinot noir, sports, antique mechanical banks.
First choice for a new career: I started out in athletic administration, and if I had to pick a second career it would be to go back to working for the University of Oregon’s athletic department. Go Ducks.
[Above updated to note that Anderson is Chair, Holwerda is Chair Elect. Thanks, commenter.]
The ORS 31.200-31.225 statute that Mr. Herrmann cites in his take-down demand is titled “Liability of radio or television station personnel for defamation”. 31.205 discusses “Damages recoverable for defamation by radio, television, motion pictures, newspaper or printed periodical”. So I guess I am a professional news organization, at least in the eyes of the UO Foundation. Section 31.215 lays out the following procedure for retraction demands:
(1) The demand for correction or retraction shall be in writing, signed by the defamed person or the attorney of the person and be delivered to the publisher of the defamatory statement, either personally, by registered mail or by certified mail with return receipt at the publishers place of business or residence within 20 days after the defamed person receives actual knowledge of the defamatory statement. The demand shall specify which statements are false and defamatory and request that they be corrected or retracted. The demand may also refer to the sources from which the true facts may be ascertained with accuracy.
(2)The publisher of the defamatory statement shall have not more than two weeks after receipt of the demand for correction or retraction in which to investigate the demand; and, after making such investigation, the publisher shall publish the correction or retraction in:
(a)The first issue thereafter published, in the case of newspapers, magazines or other printed periodicals.
(b)The first broadcast or telecast thereafter made, in the case of radio or television stations.
(c)The first public exhibition thereafter made, in the case of motion picture theaters.
(3)The correction or retraction shall consist of a statement by the publisher substantially to the effect that the defamatory statements previously made are not factually supported and that the publisher regrets the original publication thereof.
(4)The correction or retraction shall be published in substantially as conspicuous a manner as the defamatory statement. [Formerly30.165]
I have received a plethora of advice on how to respond to this threat. Several attorneys have looked at it, and my post, and said that they do not think that my language is an accusation of criminal activity, particularly given the full context of the post. They have suggested I call the Foundation’s bluff and then file an anti-SLAPP countersuit against them, if they proceed with a lawsuit against me.
I was also told that that the language in Mr. Herrmann’s blustery last paragraph would be quite helpful in a counter-suit, given that anti-SLAPP laws such as Oregon’s are specifically designed to make it difficult to use defamation lawsuits to limit public discussion, as his threat seemingly proposes to do.
One reader suggested that I offer to replace the phrase that the Foundation claims to interpret as an accusation of criminal activity, i.e. “money laundering cash for the Duck Athletic Fund”, with something like “lovingly laundering sweaty jockstraps for the Duck athletic department”. Thanks for this proposal, really.
In the end, I decided to follow the precedent established by noted barrister John Cleese. Mr. Herrmann, you may take this video as my response, in full, to your threatening letter:
The DVD is available from Amazon for $14.98, here.
Meanwhile, back in Chicago:
Chicago State University seems to have some of the same insider dealing issues that have troubled UO. Check out their “Crony State University” blog, written by 8 faculty. Impressive.
… Our public university was built by Oregonians, and for more than 135 years it has carried out its mission to serve the students and the state of Oregon.
In recent decades, inadequate investment in the activities, resources and personnel that constitute and define a world-class research university have not matched the demands of a growing student body.
Layers of highly-paid administrators, in a quest to secure private funding, have too often sought the easy money, often failing to use their authority and discretion to prioritize and promote the value of investing in our core educational and research strengths. …
Michael Dreiling, an associate professor of sociology, and Karen McPherson, an associate professor of romance languages, are members of the United Academics of UO Organizing Committee. Also contributing to this essay were organizing committee members Jack Boss (music), Jane Cramer (political science), Karen Creighton (physical education and recreation), Joseph Lowndes (political science) and Dan Hosang (political science).
Oregon’s luxurious Hatfield-Dowlin Complex distorts the academic-athletic balance
The comment jumped out at UO ethnic studies professor Daniel HoSang as he read a story about the Ducks’ swank, new football operations center, the Hatfield-Dowlin Complex.
UO director of football operations Jeff Hawkins was explaining the need for facility improvements for athletics. “The academic center was 8,000 square feet,” Hawkins said.
“It was dilapidated; it was rodent infested. And it was filled with asbestos. Take the pictures of before and realize what we didn’t have.”
Shortly after the 2010 completion of the 40,000-square-foot Jaqua Academic Center UO athletes and the athletic academic advisers moved out of the Esslinger Annex and the Department of Ethnic Studies moved in.
One of the former conference rooms used to tutor athletes became HoSang’s office.
“The athletic department seems tone deaf sometimes,” HoSang said.
UO spokesman Julie Brown said the Esslinger Annex underwent a small renovation after the athletic department decamped that included work on the heating and air conditioning system, new flooring and fresh paint.
She said there is no record of asbestos or rodents. It’s now home to the school’s American English Institute.
… Well, it’s the Knight’s money and his right to spend it as he chooses, right?
Sure, if we’re talking about his house, or his company, or his professional franchise, should he choose to buy one.
But the University of Oregon is a public institution of higher education, and, in theory, should not be for sale.
“This is serving more the advertising purposes of Nike and less the academic mission of the university,” UO sociology professor Michael Dreiling said. “This is about the leadership of the university and setting boundaries.”
That line was crossed in 2010 when Richard Lariviere, then UO president, warned the State Board of Higher Education of dire consequences if board members failed to give Knight approval to do as he pleased without administrative oversight while constructing Hatfield-Dowlin.
The board acquiesced. Three years later the deed is done. The university now will deal with a different set of consequences, among them staffing, and maintenance for the new edifice, and an underswell of faculty discontent.
There is nothing wrong with having a nationally-ranked football team. But it should be the product a campus-wide pursuit of excellence.
When the most impressive building on campus is a football complex nearly as large and tricked out as a Hapsburg palace, something clearly is out of whack.
“We’re not that far apart in actual dollars,” Bramhall says. UAUO is proposing a faculty salary increase of $20 million, or 15 percent, while the administration is proposing a faculty salary increase of $14 million, or 10.5 percent. According to the OUS June 2013 supplemental budget for 2012-13, the UO’s total operating budget was $865,513,412. The blog UO Matters reports that full professors at UO make about 82 percent of the average salary at other AAU public universities, associate professors 90 percent and assistant professors 89 percent.
Bramhall says that the budget reflects the administration’s priorities and decisions. “We decided we would have our own police force and that we would arm that police force,” he says. “The budget now reflects that decision.” In addition, UO’s general fund is paying $2 million for tutoring student athletes, an average of $4,000 per student athlete, a fraction of what’s available for the average student.
Taking a portion of all athletic donations and using it for the academic side is one solution. Even 10% would be a start. Meanwhile President Gottfredson still hasn’t even offered a substantive response to the UO Senate’s resolution calling for an end to the millions in subsidies for the athletic side, that come out of UO student tuition money.
8/19/2013 update: “Around the O” reports UO raised $200M this FY in donations. It’s difficult to tell from the press release, and as explained below UO Foundation CEO Paul Weinhold has refused to release breakdowns, but it appears that about 57% of the donations to the Foundation went to the jocks. If you count the $140M or so Knight spent on the football sweat shop – and it’s hard to ignore – the jocks got about 75%.
It’s well past time for UO to start taking a percentage of the athletics donations for the academic side. But there’s still no substantive response from President Gottfredson to the May 8 Senate motion on this, just a letter saying maybe he’ll appoint a working group. It’s been 9 years since the original athletics task force recommendation.
The story also reports that chronically unlucky Chief Investment Officer Jay Namyet was able to earn only 13.8% on the endowment. Disastrous. The S&P 500 returned 18.6% over the same period, the Dow was up 16.3%, and the NASDAQ 17%. His underperformance is, conservatively, $11M in just one year. For perspective, the faculty union and the administration are currently about $5M apart on salaries.
The UO Foundation’s full annual report is typically released at the end of September. This early press release appears to be an attempt to divert attention from the latest athletic excesses. Good luck with that. 6/2/2013 update: The UO Foundation has been dominated by sports boosters for far too long. See past posts on the Foundation, including their (successful) effort to get an exemption from UO’s public records law, here. Tax deductible donations without transparency is not a recipe for trust, and not a good model for an independent UO Board of Trustees. Speaking of which, I still can’t get a commitment from UO that SB270 as currently written will require the Board to follow that law – even to the feeble extent that UO currently obeys it.
First choice for a new career: I started out in athletic administration, and if I had to pick a second career it would be to go back to working for the University of Oregon’s athletic department. Go Ducks.
How convenient. A former Duck athletic department and NCAA employee, whose dream is to work for the Duck athletic department, will now oversee the UO Foundation, which by law is supposed to support the university’s academic mission. Oregon law requires that
The Foundation will accept only gifts that: the University has approved, including all restrictive terms and conditions, has determined to be consistent with the core educational values of the University, and are compatible with the missions of the University and of its individual programs (Oregon Administrative Rules, Chapter 580, Div. 42 and Div. 46);
(c) Creating a commitment for the institution or the state to continue support of a program funded through gifts, grants or contracts, in the event such funds are discontinued;
I suppose a creative lawyer could slip the Jaqua Center and the Knight Arena through. But in practice the foundation is now mostly a money laundering operation for the Duck Athletic Fund. That’s a very rewarding business, for some. Erika Funk filed 2 requests for extensions with the IRS, but finally had to make some salary info public on May 15, in their IRS 990. These numbers are now almost a year old:
Here are the donations they received for UO for current operations, from 2000 up to last year. The numbers are from the Council for Aid to Education:
In his investiture speech President Gottfredson announced a new $1B capital giving campaign. The previous campaign ended in 2006, and raised $850M in donations and pledges. How much of that was for athletics, and how much for academics? The UO Foundation won’t report UO’s breakdown for capital gifts and endowments – something most foundations, including the OSU Foundation, tell the CAE as a matter of course:
I did find this snippet from last summer:
Overall, giving in fiscal 2012 totaled $51,737,551 in support of academics, mainly for current purposes and endowments. Athletics programs received $55,950,231, which included significant support for expansion of the Len Casanova Center.
What steps will President Gottfredson take to make sure the UO Athletic department doesn’t siphon off potential academic donations for the Ducks? The Athletic department runs its own independent fundraising program, which currently competes with the UO’s development office without check, and with great success – for the jocks:
Both alumni and non-alumni show an increasing preference toward directing their gifts to the intercollegiate athletics department-at the expense of the donations to academic programs. Sperber’s (2000) assertion that giving to athletics undermines academic giving is strongly supported.
For every $100 of new revenue raised from major donors by the University of Oregon, over 80% is being directed to the athletic department. Even with the large increases in numbers of total donors since 1994, academic giving struggles to remain stable while donations to athletics experience huge growth. In three out of the past five years (1998, 2000, 2001), the total dollars donated to academics by non-alumni has fallen despite annual increases in the number of non-alumni donors. Total dollars donated to academics by alumni fell in only one year (2000), again despite an increase in the total number of donors. This suggests new donors are not making academic gifts, and current donors are shifting dollars from academic giving to donations directed to the athletic program. Additionally, as discussed above, proportional giving by alumni is predominantly directed to the athletic program. If these trends continue, total academic giving will fall for both alumni and non-alumni despite continued increases in the total numbers of both types of donors.
To add to the insanity, under the secret Frohnmayer/Kilkenny agreement President Gottfredson’s office has to pay the AD $350K, so that they can then use his Autzen presidential skybox to schmooze with their boosters and get still more donations for the Ducks. I’m not making that up.
One obvious solution is for UO to tax donations to athletics, sending say half to the academic side. Another would be allow donations to the athletic side count for determining season ticket priority. Athletic Director laughed at both these proposals when we brought them up in the IAC. He even refused to consider a ticket surcharge – even just a dollar – to be earmarked for academic scholarships.
Currently the transfers run the other way. President Gottfredson has until July 8th to respond to the Senate resolution calling for
an end to two of the more egregious annual subsidies for athletics – the $2M Jaqua Center operations costs, and the $467K we pay for Knight Arena land, and
a modest payment from the AD towards need and merit scholarships for regular UO students: just 2% of the AD’s spending on sports.
Meanwhile, up in Corvallis, OSU’s foundation is in the midst of their own capital campaign: See their list of contributions here. Their athletic budget is only about half UO’s, their subsidies are out in the open, and they manage to bring in plenty of giving for academic programs.
Here’s another Duck/Beaver comparison: Research and Athletics spending:
Diane Dietz has the story and data on UO here. I got the OSU data from their very complete Research Office data page, here. Both are “Federal Flow Through” totals, which are the easiest to find directly comparable data. They include spending on outreach and instruction, but it’s mostly research money and the trends look similar no matter how you cut it. That’s the table on the left. The table on the right shows athletic department spending, from USAToday. (Official UO and OSU numbers for 2012.)
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honest Uncle Bernie UOM asked elsewhere about how to foster intellectual diversity. In connection with philanthropy, here's a big move at Johns Hopkins: http://www.realcleareducation.com/articles/2017/07/18/a_campus_culture_of_free_expression_brings_many_rewards_110177.html – Tuesday
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