Ethics Ruling in CT: Public College Foundation Can’t Spend on President’s Wife

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Norwalk Community College

April 17, 2014; Stamford Advocate

Someone in this story should have known better. In fact, everyone involved should have. The president of Norwalk Community College, David Levinson, brought his wife with him to a conference and three local charitable events. His costs were covered by the community college, presumably, but her costs were covered by the NCC Foundation, the private fundraising arm of the community college. Connecticut’s Office of State Ethics intervened to tell Levinson and the foundation that the donors to the foundation didn’t intend for the money to be used by a non-state employee like Levinson’s wife.

Levinson said he didn’t do anything wrong and the foundation knew that the money was for his wife. The foundation’s president, Eleanor Riemer, decided for some reason to issue Levinson a letter commending him for his “tireless fundraising and networking,” recognizing his wife’s positive role in fundraising and networking, and asserting that any violation of the state’s code of ethics had been “inadvertent and unintentional.”

It was a relatively small expenditure by the foundation—less than $1,000—but it cost Levinson or the foundation a penalty of $3,000 (the article said that the payment was from Levinson). However, the size of the amount doesn’t matter; the inappropriate expenditure wasn’t a one-time incident but a multi-event lapse of judgment.

Something, however, doesn’t sound right about this story. Shouldn’t either Levinson or Riemer have known that the expenditure of foundation money for a non-state employee wasn’t allowable per state ethics guidelines? Did the ethical faux pas require the letter from Riemer of encomiums for Levinson?

Interestingly, the state’s ethics office determined that state funds, even if generated by private donations, are subject to state rules, which gave the Ethics Office the latitude to intervene. But that shouldn’t have been needed. The private fundraising arms of public institutions should be very careful and very appropriate about the moneys they raise. And if there is an inappropriate expenditure, as in the case of Levinson, the best course is to admit the error, not fight it, and not issue reputation-building after-the-fact letters that simply make investigators want to look for more.—Rick Cohen

  • Charles Higginson

    To quote the story, “Something, however, doesn’t sound right about this story.”

    I work at the University of Kansas Endowment Association, which appears to be on similar legal footing as the NCC Foundation; in fact, we are the oldest private foundation in the country working in support of a public university (founded 1891).

    It’s part of our lore that we were founded expressly so that donations meant to support KU would NOT become state money. This allows us to maintain confidentiality, even anonymity, for donors, and to ensure that donor intentions are carried out in perpetuity, neither of which would be assured if donations fell under the state’s control.

    I’m not defending the original expenditure here. But, to quote again, “Interestingly, the state’s ethics office determined that state funds, even if generated by private donations, are subject to state rules, which gave the Ethics Office the latitude to intervene.” That’s what really doesn’t sound right to me.

  • Mrtin Robbins

    Many of the university related foundations in the U.S. play fast and loose with their own policies which endanger the private nature of private funds contributed to the foundation.

    After having run two university related foundations, I have come to the conclusion that the best way to secure the private nature of a foundation and to reduce the probability of state interference, is to act, whenever possible, as if the foundation were a public institution. By that I mean, setting foundation policies and procedures that follow state law, at least as much as possible.

    By way of example, I mean policies such as: (1) complying with the state’s open meetings and records laws, with some limitations, such as for donors requesting anonymity; (2) no purchasing for the college or university to avoid state purchasing policies; (3) avoiding interlocking board membership; (4) avoiding foundation board membership by university employees; and (5) having all requests for foundation funding from unrestricted funds come directly from the university board followed by a second vote of the foundation board to approve or decline the request.

    I even question having a foundation engaged in the fundraising process. In my world, development staff would be employed by the university, funded by an appropriation by the foundation. I realize state laws in some cases prevent this but in the long run, where it is possible, it makes a clear distinction about who is in charge of development.

    (As an aside, I was on the losing side of a legal challenge by a newspaper for access to foundation fundraising records. The basis of the court decision was that fundraising and development are inherent university functions and “contracting” this responsibility to another organization, such as the foundation, does not eliminate the public right to access open records. The court did allow for anonymous donor records to remain closed.)

    In the end the sky did not fall. We quickly learned to live with the ruling and to organize and act in a different manner. And, we were far better off for the changes. For example, we cleaned up our donor records. If what is in a record can’t stand the light-of-day, perhaps it shouldn’t be in the record.

    Such changes in normal operations appear to be cumbersome, at least on the surface, but my experience has been that once settled, the rules are simple. Most importantly, what one doesn’t want is someone in the state legislature or a governor challenging the private nature of the funds. The best way to avoid it is by eliminating, as many possible irritants in the public-private interface.

    One can look at my approach to foundation operations as a public relations driven set of changes: avoid as many public-private issues as possible before they come up. Treat the foundation as the university’s private bank which functions to receive, manage and disburse private funds for the benefit of the university and at the request of the university. Raising that money and deciding how to spend it are university functions.