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
02/01/2013
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.
Sincerely,
Lisa Thornton
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.
Dave Hubin’s PR office provided this complete list of the UO Fiesta bowlers, today. Not all those listed in the letter below went, but plenty of others did. Here are just a few:
Gottfredson promises his posse Executive Leadership Team they can bring a partner, with no tax consequences. UO’s free ticket policy is a little different on that point. I’m no tax law professor, but Jack Bogdanski of the Lewis and Clark Law School is, and he’s got this to say:
Fiesta fiasco: Duck suits dodging federal tax laws
The shenanigans that go on at the state university in Eugene never fail to amaze. From the amazing faculty watchdog blog UO Matters, today we get the long list of administrative types who, with their spouses or significant others, were offered free rides to the recent Tostitos Fiesta Bowl football weekend.
Amazingly, the recipients were told that the university would pay their and their spouses’ way to the game, which is held in Arizona, and that the reimbursement of the administrators for all of the couples’ expenses would be tax-free:
It’s hard to read the shabby pdf file that the university produced when the blogger asked for it, but here’s the sentence that jumped out at us immediately:
As a member of the official delegation, you and your spouse or domestic partner may have your travel, lodging, meal and ticket expenses paid or reimbursed, and such payment or reimbursement has no tax consequences.
Wow. Just wow. Even if you could come up with a business reason that constitutes the primary purpose for sending this many administrators to the game and party weekend — a proposition that is dubious, to say the least — excluding the amounts paid for the travel of their spouses and spousal equivalents is contrary to the tax laws. It’s so contrary, in fact, that to an enterprising IRS agent, it could constitute fraud.
As passed by Congress, the law on the spouses really could not be clearer. Here is section 274(m)(3) of the Internal Revenue Code (26 U.S.C.):
No deduction shall be allowed under this chapter (other than section 217 [relating to moving expenses]) for travel expenses paid or incurred with respect to a spouse, dependent, or other individual accompanying the taxpayer (or an officer or employee of the taxpayer) on business travel, unless—
(A) the spouse, dependent, or other individual is an employee of the taxpayer,(B) the travel of the spouse, dependent, or other individual is for a bona fide business purpose, and(C) such expenses would otherwise be deductible by the spouse, dependent, or other individual.
Now, as a few hardy readers have pointed out on an earlier version of this post, an IRS regulation, Reg. sec. 1.132-5(t), twists the law around a bit. The regulation states that if the employer’s deduction is disallowed by IRC sec. 274(m)(3), just quoted, then the employee merely has to show a “bona fide business purpose” for the spouse’s “presence on the business trip” in order to exclude the reimbursement. But the proposition that there was a “business purpose” for sending the spouses to the party weekend in Arizona is ludicrous.
We dare UC Nike to show the world the professional opinion they got that the spousal reimbursements are not taxable. Don’t they teach tax law and accounting down there? Not by example, apparently.
Will the IRS do anything about this? Who knows? But if we were (a) one of the people who took the trip and got reimbursed, or (b) the payroll people at the university who aren’t going to withhold any taxes on those reimbursements, we’d be extremely nervous.
{This post was revised late this afternoon, from a version posted earlier this afternoon, to address the readers’ point.]
Read more: http://bojack.org/#ixzz2JKAfskk8
More on the one-hour-long admissions event they are attempting to use to justify this, here.
12/27/2012: We made a public records request for the flyaway data – strictly for research purposes, of course. As of December 12, UO had no records showing that there was any UO business purpose for the trips. The IRS is gonna love that:
Subject: PR request, Fiesta Bowl junkets
Date: December 5, 2012 8:30:42 AM PST
To: Lisa Thornton
This is a public records request for
1) a list of the names of all UO or state employees (including e.g. state legislators) and excluding UO student employees that will be receiving free or reimbursed tickets or travel to the upcoming Tostitos Fiesta Bowl, whether directly through UO through UO Foundation accounts managed or controlled by UO employees, or through Fiesta Bowl funds related to UO’s participation in the bowl game. Please include the number in the party if family members or guests are also having costs paid through UO or the Foundation or the Fiesta Bowl.
b) a copy of any documents showing the UO business purpose of the tickets or travel.
I ask for a fee waiver on the basis of public interest. The Fiesta Bowl has a long history of corruption. The former CEO is awaiting sentencing on multiple federal and state felony charges involving misappropriation of funds received in part from UO’s previous Fiesta Bowl appearance. The public has an obvious interest in seeing what’s happening this time.
UO has released documents on travel to previous bowl games in response to PR requests, and these have been used for stories such as that at http://dailyemerald.com/2012/05/07/the-price-of-roses/ Such stories, based on public records or FOIA requests, are also common at other universities and have spurred reform efforts.
Last, Oregon law limits state agency’s ability to dole out perks such as these, and these documents are essential to establishing if UO’s practice is consistent with state ethics laws.
A week later we got this:
The University does not possess documents responsive to your request made 12/5/12 for:
“1) a list of the names of all UO or state employees (including e.g. state legislators) and excluding UO student employees that will be receiving free or reimbursed tickets or travel to the upcoming Tostitos Fiesta Bowl, whether directly through UO through UO Foundation accounts managed or controlled by UO employees, or through Fiesta Bowl funds related to UO’s participation in the bowl game. Please include the number in the party if family members or guests are also having costs paid through UO or the Foundation or the Fiesta Bowl.
b) a copy of any documents showing the UO business purpose of the tickets or travel.”
Any documents responsive to this request will not be available until after January 3.
The office considers this information to be fully responsive to your request, and will now close your matter.
And the junkets have already begun – from one VP’s email auto-responder:
Currently, I am out of the office for winter break and the Fiesta Bowl on January 3, 2013 in Phoenix. I will return to campus Monday, January 7, 2013. If you need immediate assistance, please contact our organization by phone at [redacted by UO Matters due to mercy exemption]. Thank you and Go Ducks!
Go Ducks indeed. Lorraine Davis had a special clause inserted into her contract promising her – and her husband and family – this perk. Paid for by the UO Foundation’s slush fund:
Any more questions about where the UO Foundation is spending that scholarship money? 12/27/12.
This is just superb reporting. Spot on. These records (and bad faith response here by OU) are one of the better “trails” reflecting the Kremlin Factor which infects big time college sports– and these administrators actually believe it’s an unfair burden to have to respond to these kinds of request. Keep up the good work.
“These administrators” are so out of touch that they leave auto-responses on their emails while they are away.
When you email VPFA Jamie Moffitt:
I am going to be out of the office until Monday, January 7th and will have limited email access. If you have an issue that must be addressed before I return, please contact Kelly Zimmerman at [email protected]. Thanks –
Jamie Moffitt
Vice President for Finance & Administration & CFO
University of Oregon
In what sense do ‘the obligations’ of Lorraine Davis’ current position (Special Assistant to Something or Other?) require her to attend ‘many social functions’? And exactly how is the University of Oregon still ‘likely to benefit’ from her presence at such events?
Someone should cut this retiree loose…
That was Lorraine’s contract as interim Provost I believe. But of course that is just a pesky detail.
Good point. Does anyone know if she still has this deal? I’m guessing yes…but it would be interesting to know.
Hypotyposis indeed!
Presumably someone — you — will be forwarding all this to the IRS?
IRS: ‘Internal consistency and plausibility are more important than referential rectitude. And this task will of course involve more fictive artifice and not mere reportage.’ J. Wood. See, e.g., The Pale King, D.F. Wallace
Your “tax expert” from Lewis and Clark is incorrect. The tax law he cites, Section 274(m)(3), concerns the tax deduction for the employer. The question is whether the amounts are taxable to the spouse. This is covered by Regulation Section 1.132-5(t), which states that Section 274(m)(3) won’t apply as long as there is a bona fide business purpose for the spouse. For a good explanation of this, see the University of California travel policy document, sections V.H.2.f and g on spousal and athletic travel at policy.ucop.edu/doc/3420365/BFB-G-28. Unless you think the University of California is also committing tax fraud.
I’m reading it, and still thinking the UO VP types are going to have a hard time:
Under IRS regulations, the travel expenses of a spouse are not taxable,
provided it can be established that his or her presence serves a bona fide
business purpose. A spouse who attends a function is considered to have
a business purpose if he or she has a significant role in the proceedings
or makes an important contribution to the success of an event.
and later
Travel by a spouse (or equivalent) who accompanies an athletic director
(or assistant director or head coach) to sporting events such as bowl
games and tournaments is presumed to have a bona fide University
business purpose (see Section f, Spousal Travel, above) in situations
where the NCAA or potential donors expect that certain high-ranking
members of the athletic department, and their spouses, will participate in
events associated with these athletic activities. The travel expenses of a
spouse incurred in the pursuit of such activities may be reimbursed
provided documentation, such as an NCAA event agenda, is provided to
substantiate the business purpose of the travel. Such amounts are not
taxable or subject to reporting.
Yeah, them stinkin UO VP types are gonna do hard time, huh?
Here’s the link to UO’s policy, such as it is: http://dl.dropbox.com/u/971644/uomatters/IAC/303-Complimentary%20Tickets.doc
Note this part (emphasis in original):
Staff members who receive complimentary admissions as a prerequisite of their position are responsible for reporting the value of the tickets for income tax purposes, when appropriate.
It’s embarrassing to come out swinging like this only to find that you’re just shadow boxing. “The law on spouses could not be clearer” indeed.
Credibility – BOOM!
Free trips like these seem to involve some conflict of interest issues. I wonder if the OGEC has an opinion on them?
The regulation cited by Anonymous, Reg. 1.132-5(t), states that if the employer’s deduction is disallowed by IRC sec. 274(m)(3), quoted in my blog post, then the employee merely has to show a “bona fide business purpose” for the spouse’s “presence on the business trip” in order to exclude the reimbursement. But the proposition that there was a “business purpose” for sending the spouses to the party weekend in Arizona is ludicrous.
We dare UC Nike to show the world the professional opinion they got that the spousal reimbursements are not taxable. If I were (a) one of the people who took the trip and got reimbursed, or (b) the payroll people at the university who aren’t going to withhold any taxes on those reimbursements, I’d be extremely nervous about what’s apparently going to go down here.
Doh!
Yea, except these bowl games always have social functions attached for donors where the argument can easily be made that the spouses play a role in helping the university connect with the donor community. To my knowledge (though I’m no expert), the IRS is pretty lax about how they interpret the “bona fide business purpose” clause when it comes to such things. (Any of you had your spouse invited to a dinner honoring something you’ve done? Following bojack’s logic, you should report the cost of your spouse’s dinner to the IRS. Is that really what we want?)
More generally, there are many valid questions/critiques one could raise about the UofO (and indeed any institution), but why are we giving deference to someone like bojack who clearly holds our institution in such low regard (see his comments about “UC Nike” and the like).
Indeed — this was a social function for university admins. That was the service project at the food bank from 9 til noon — but feel socialed-out? You could leave at 10.
regarding the comment 2 up, it’s often a good idea to listen to your critics.
Thoughtful critics are always worth listening to, but when someone starts from a position of complete disdain, that’s another matter. To expand on this point by analogy, I tend toward the liberal end of the political spectrum, but I regularly read thoughtful stuff coming from the right. I get nothing, however, out of listening to Rush Limbaugh other than high blood pressure.
I would very strongly suggest that you listen to the alumni who are going bankrupt due to student loan debt, or are enraged at the massive cost overruns which make it almost impossible for their kids to attend U of O. You gonna ignore them too because you only like to hear happy talk?
I’m one better than you, I guess. Rather than pre-committing to “get nothing,” I will consider what lead to the writer’s position. If held positions are arrived at thoughtfully, there’s much to learn. It is through much effort and consideration that the growing readership here, for example, has grown to lack much confidence in the administration. You, of course, can offer evidence to the contrary any time. (I keep looking for evidence of administrative excellence… where is that evidence… I can’t seem to find it.)
The responder to my comment (my comment is 2 up, the response is 1 up) makes the same point I was trying to make when when he/she writes that “if held positions are arrived at thoughtfully, there’s much to learn.” I completely agree. The problem is that the Rush Limbaughs of the world start by assuming all liberals are ignorant jerks, global warming is a myth, etc. That does not make them thoughtful interlocutors. Labeling UO as UC Nike and questioning whether we have a tax law program (which everyone knows we do)is suggestive of someone who is more in the Rush Limbaugh camp than the thoughtful interlocutor camp. Pointing that out is not to disparage many of the good questions that have been asked by participants in this blog about UO practices–though I do worry about fostering a culture that focuses only on the negative. The Greek Sophists taught us long ago that anything can be torn down, but once that becomes the mindset, it is increasingly hard to see the good along with the bad.
You’re right, UC Nike isn’t appropriate. U of O isn’t anything close to a UC, it should be Cal State Nike….
It would be interesting to know who advised President Gottfredson on the tax treatment issue. Hopefully not Randy Geller, who took the free trip, with partner. Might be a bit of a conflict of interest.
UO is a private institution and it can spend its revenue however the President see best. Let’s move on.
Soon the UO administration will claim that part of the “business purpose” of bring along the spouses was to solicit donations for UO. Unfortunately there’s this paper, by UO business school professor Dennis Howard, showing that
“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.”
Not relevant to the Ducks? Actually, it’s based on data Howard got from donations to the Ducks and to UO’s academic side: https://uomatters.com/2011/01/uo-prof-on-athleticacademic-donation.html
“reimbursed from current unrestricted funds”
Ha! Who said there is no *free lunch*????
Don’t forget the Coach & staff also get extra $$$$ just for going to a Bowl game & even more if they win.
Someone needs to photoshop this bunch as “Drunken Sailors on the big ship Slush Fund”.
This post is defamatory. You have no evidence that former BCS chair Dave Frohnmayer was involved in anything illegal!
Get a lawyer then