Cal State Stanislaus: Let Sarah Palin Speak - Somewhere Else
by Joseph Palermo
LA Progressive: 19 April 2010
Thanks to the resourceful dumpster diving of two CSU, Stanislaus students,
Alicia Lewis and Ashli Briggs, the public was finally able to get a glimpse
behind the curtain of Sarah Palin Land. Attorney General (and gubernatorial
candidate) Jerry Brown has promised a thorough investigation. These two
young people should be commended for their civic mindedness and citizenship.
Apparently the CSU, Stanislaus administration and its University Foundation
had a secrecy agreement with the group representing Sarah Palin, the
Washington Speakers Bureau, for her upcoming speech at the college's 50th
anniversary commemoration. Her contract with CSU, Stanislaus stipulates that
it be shielded from public scrutiny even though she is known to charge
upwards of $100,000 just to show up.
It turns out that since the University Foundation is part of a public
university it cannot shield itself from the inquiries of members of the
California State Legislature. On March 31st Senator Leland Yee (D-San
Francisco) requested Palin's contract under the Public Records Act, and
about a week later the CSU, Stanislaus administration claimed that the Palin
contract was nowhere to be found. On April 7th, Senator Yee called for an
investigation. Two days later Ms. Lewis and Ms. Briggs made their grisly
discovery in the administration building's dumpster.
What the two women found were intact pages of Palin's speaking contract with
the CSU, Stanislaus University Foundation. They also found large garbage
bags full of shredded documents.
The few pages of the contract the students were able to piece together are
revealing. If you ever needed evidence of whether or not Sarah Palin is a
"rock star," this is it. Palin apparently has as many riders in her contract
as Aerosmith or Def Leppard. They include "round-trip, first-class
commercial air travel for two between Anchorage, Alaska, and event city,"
(not an unreasonable request). But it also stipulates that if first-class
accommodations cannot be arranged "a Lear 60 or larger" will suffice.
There are some damning tidbits on the few surviving pages of the nine-page,
mostly shredded, document. The contract stipulates that all arrangements
must be secret (which sparked Senator Yee's interest) and a "one-bedroom
suite and two single rooms in a deluxe hotel" must be provided. In addition,
it strictly limits all photographs and audio and visual recordings of the
event and only allows for one highly orchestrated photo-op. It even includes
a diagram dictating how the furniture is to be arranged for the photo
session. There's also a request for two bottles of water and bendable
straws. What, no bowl of yellow M&M's?
The incident raises some serious questions: Did the CSU, Stanislaus
administration lie to a member of the State Senate when it claimed it didn't
have Palin's contract? And if so, is this the kind behavior we should expect
from the stewards of public taxpayer funds? Senator Yee has proposed a
prudent remedy in the form of Senate Bill 330, which would require
University Foundations to practice the same level of transparency as do the
universities themselves.
Sometimes it takes college students going through dumpsters to shed a little
light on the kinds of problems that exist at our public universities. In
recent years administrators' salaries have grown more than any other
employees, often earning them far more than the governor and state
legislators. Many of them seem to have lost sight of the public mission of
the California State University system. It's not to aggrandize a tiny
overpaid minority but to educate the state's workforce so that California
can continue to be a source of innovation and world leadership.
What do people associated with a university have to learn from Sarah Palin?
Does Palin even believe in public higher education? For $100,000 she'll
deliver her stump speech that we've all heard about a million times about
how everything was just great in this country under her hero George W. Bush
before the "radical" President Barack Obama was elected. The CSU, Stanislaus
University Foundation could get Jonah Goldberg or Michelle Malkin to come to
the school and say the exact same thing for a fraction of the price.
There is now only one option available if the CSU, Stanislaus administration
wants to save face and that's to let Palin speak - somewhere else. The
University Foundation cannot afford even the appearance of impropriety.
Given its public role, it should be held to a higher standard than the
average private corporation.
If some private group wants to hire her, so be it. But public institutions
have an obligation to serve the public, and that means the public's right to
know. The Palin incident illustrates everything that's wrong with the
business-oriented way the CSU system has been managed in recent years. It's
somehow fitting that the administrators' "accountability moment" might come
via two students rummaging through a garbage dumpster.
Joseph Palermo
***
http://www.nytimes.com/2010/04/19/opinion/19krugman.html?th&emc=th
Looters in Loafers
By PAUL KRUGMAN
NY Times Op-Ed: April 18, 2010
Last October, I saw a cartoon by Mike Peters in which a teacher asks a
student to create a sentence that uses the verb "sacks," as in looting and
pillaging. The student replies, "Goldman Sachs."
Sure enough, last week the Securities and Exchange Commission accused the
Gucci-loafer guys at Goldman of engaging in what amounts to white-collar
looting.
I'm using the term looting in the sense defined by the economists George
Akerlof and Paul Romer in a 1993 paper titled "Looting: The Economic
Underworld of Bankruptcy for Profit." That paper, written in the aftermath
of the savings-and-loan crisis of the Reagan years, argued that many of the
losses in that crisis were the result of deliberate fraud.
Was the same true of the current financial crisis?
Most discussion of the role of fraud in the crisis has focused on two forms
of deception: predatory lending and misrepresentation of risks. Clearly,
some borrowers were lured into taking out complex, expensive loans they
didn't
understand - a process facilitated by Bush-era federal regulators, who both
failed to curb abusive lending and prevented states from taking action on
their own. And for the most part, subprime lenders didn't hold on to the
loans they made. Instead, they sold off the loans to investors, in some
cases surely knowing that the potential for future losses was greater than
the people buying those loans (or securities backed by the loans) realized.
What we're now seeing are accusations of a third form of fraud.
We've known for some time that Goldman Sachs and other firms marketed
mortgage-backed securities even as they sought to make profits by betting
that such securities would plunge in value. This practice, however, while
arguably reprehensible, wasn't illegal. But now the S.E.C. is charging that
Goldman created and marketed securities that were deliberately designed to
fail, so that an important client could make money off that failure. That's
what I would call looting.
And Goldman isn't the only financial firm accused of doing this. According
to the Pulitzer-winning investigative journalism Web site ProPublica,
several banks helped market designed-to-fail investments on behalf of the
hedge fund Magnetar, which was betting on that failure.
So what role did fraud play in the financial crisis? Neither predatory
lending nor the selling of mortgages on false pretenses caused the crisis.
But they surely made it worse, both by helping to inflate the housing bubble
and by creating a pool of assets guaranteed to turn into toxic waste once
the bubble burst.
As for the alleged creation of investments designed to fail, these may have
magnified losses at the banks that were on the losing side of these deals,
deepening the banking crisis that turned the burst housing bubble into an
economy-wide catastrophe.
The obvious question is whether financial reform of the kind now being
contemplated would have prevented some or all of the fraud that now seems to
have flourished over the past decade. And the answer is yes.
For one thing, an independent consumer protection bureau could have helped
limit predatory lending. Another provision in the proposed Senate bill,
requiring that lenders retain 5 percent of the value of loans they make,
would have limited the practice of making bad loans and quickly selling them
off to unwary investors.
It's less clear whether proposals for derivatives reform - which mainly
involve requiring that financial instruments like credit default swaps be
traded openly and transparently, like ordinary stocks and bonds - would have
prevented the alleged abuses by Goldman (although they probably would have
prevented the insurer A.I.G. from running wild and requiring a federal
bailout). What we can say is that the final draft of financial reform had
better include language that would prevent this kind of looting - in
particular, it should block the creation of "synthetic C.D.O.'s," cocktails
of credit default swaps that let investors take big bets on assets without
actually owning them.
The main moral you should draw from the charges against Goldman, though,
doesn't involve the fine print of reform; it involves the urgent need to
change Wall Street. Listening to financial-industry lobbyists and the
Republican politicians who have been huddling with them, you'd think that
everything will be fine as long as the federal government promises not to do
any more bailouts. But that's totally wrong - and not just because no such
promise would be credible.
For the fact is that much of the financial industry has become a racket - a
game in which a handful of people are lavishly paid to mislead and exploit
consumers and investors. And if we don't lower the boom on these practices,
the racket will just go on.
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