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Friday, December 01, 2023
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NYS Bill Would Subject UB Foundation to FOIL

For years, the UB Foundation has operated beyond the reach of the Freedom of Information Law.But its days of opaqueness may be numbered.

A bipartisan bill working its way through the state Senate and Assembly would subject SUNY-affiliated foundations and non-profits to the state Freedom of Information Law. There is over $2 billion in funds spread throughout the foundations. The bill would also require the foundations to adopt conflict of interest policies.

UB officials declined comment on the bill, and the UB Foundation's executive director said the organization has yet to take a stance. But the Business Council of New York State - a prominent business lobbying organization that UB pays $5,000 in annual dues to - is opposing the bill, saying it would require disclosure of trade secrets and otherwise damage the ability of foundations to do business.

"Rather than a 'welcome mat' to opening [research and development] to collaborative investments, this bill sends a very strong 'steer clear' signal to what are very complex business-higher education relationships," reads a statement on the BCNYS website.

But Robert Freeman, executive director of the state Committee on Open Government, said the FOI Law protects trade secrets and other confidential business information from disclosure.

"The [FOI] law provides the protection that's needed...I don't believe [the BCNYS statement] clearly recognizes the ability to deny access to records that is provided in the Freedom of Information Law," Freeman said.

Many members of the UB faculty approve of the bill.

"I solemnly support the bill," said Professor of Economics Paul Zarembka, a member of UB's Faculty Senate. "There's absolutely no reason why the UB Foundation shouldn't have the same disclosure as the rest of the university."

What's the UB Foundation?

Chartered in 1962 by the state when then-private UB joined SUNY, the UB Foundation is an "independent" not-for-profit corporation that controls UB's endowment, valued at $685.2 million last year - the largest in the SUNY system by almost half a billion dollars. The UB Foundation manages gifts and facilitates public-private partnerships for UB, among many other services.

Similar foundations exist at other SUNY schools, like the Stony Brook Foundation (which controls a $110 million endowment). And the SUNY Research Foundation, through which over $1 billion filters annually, serves the entire SUNY system.

But in recent years, there have been reports of the UB Foundation making illegal donations to former Erie County Executive Chris Collins' political campaign and supplementing the state salaries of top-level UB employees. In fact, the UB Foundation was outspending student scholarships in favor of employee compensation by a ratio of more than seven to one, according to an Artvoice report.

For example, current UB President Satish K. Tripathi receives $115,000 from the SUNY Research Foundation and $150,000 from the UB Foundation in addition to his $385,000 state salary.

The proposed bill would expand FOIL to include the foundations

Both the Assembly (7789) and Senate (5797) versions of the bill have bipartisan support and are advancing at a normal pace.

Its sponsor in the Assembly is Democrat Deborah Glick, chair of the body's Higher Education Committee, of Manhattan. Republican Kenneth LaValle of Long Island is the Senate sponsor. Eleven additional state legislators, all from downstate and hailing from both sides of the aisle, co-sponsor the bill.

None of Western New York's legislative delegation has yet signed onto the bill, but Assemblyman Sean Ryan of Buffalo expressed cautious support.

"I am a big believer in transparent and open government, and the finances of state entities should be made public," Ryan said in a statement about the bill. "At the same time, we need to make sure that proprietary information is not being revealed that could impact their operations. The bill is currently a work in progress, and I look forward to working with my colleagues to ensure that this bill meets those standards."

Faculty support

UB Law School Professor Martha McCluskey outlined in an email some of the reasons she thinks the bill is necessary. She's part of the Faculty Senate's executive committee.

"[UB Foundation] meetings are not open; no minutes are available; in general, funding decisions and criteria are undisclosed," McCluskey said. "Without transparency, representation, or public oversight, what ensures that the UB Foundation is effectively fulfilling its purpose of supporting UB? Many UB Foundation trustees and directors have private business interests in the university and its foundation funds, and concerns about conflicts of interest have been the subject of news reports in the past."

One of those news reports was Artvoice Associate Editor Buck Quigley's "The Great UB Heist," which raised questions about whether UB Foundation board members were privately benefitting from contracts they awarded on behalf of the foundation. The article also revealed that officials such as then-UB President John B. Simpson were listed as working 40 hours per week for both the state and the foundation, receiving large salaries from both.

While working on the story, Quigley sued the UB Foundation for denying his FOIL requests. The UB Foundation won.

The Business Council opposes the bill

BCNYS Director of Communications Rob Lillpopp said members of his organization aren't sure the system is broken and thus don't feel it needs to be fixed. He added that there are already transparency measures in place for university foundations, such as the disclosure of IRS 990 tax forms.

"I think that the SUNY Research Foundation and the University at Buffalo, in their dealings, are always trying to have transparency wherever they can," Lillpopp said. "At the same time, they have to balance that with the need to be able to do business with businesses and help create jobs - not only within the university itself, but also within the companies who work with them."




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