California State University Chancellor Charles Reed has retained high-priced lobbyists without competitive bidding, even though CSU has a Sacramento office where it runs a $1.1 million-a-year, in-house lobbying unit whose state employees monitor CSU-related bills and follow state budget hearings.

In the last decade, the university system has paid more than $2 million in public funds to two Sacramento lobbying firms – Capitol Advocacy LLC, and Sloat Higgins Jensen & Associates – to influence the policies and budget decisions of the governor and state lawmakers.

At a time of state budget cuts, student tuition hikes, canceled classes, faculty hiring freezes and layoffs, CSU’s lobbyists have been paid to defeat bills designed to shed more light on CSU executive salaries and perks as well as public records. In 2006, The Chronicle reported that millions of dollars in extra compensation was quietly handed out to campus presidents and other top executives as they left their posts.

The university has paid the outside lobbyists not only to obtain funding for programs such as student financial aid and an Education Doctorate degree, state records show, but also to monitor nearly a dozen bills that had little or no direct connection to the university, including legislation on affordable housing for Iraq veterans, money laundering, terrorism, sex offenders and sacred Indian grounds.

Reed has used the lobbyists mainly to advance certain pieces of CSU-related legislation and defeat bills considered not in the state university’s interest.

The lobbyists have also been marshaled to press the Legislature on faculty salary negotiations and to woo political support in hopes of preserving the university’s shrinking budget.

"CSU needs coverage for a lot of different policy matters and budget matters that constantly come up," Reed told The Chronicle, "and I want the CSU represented to the very best level that we can."

Although the chancellor defended his use of lobbying firms, critics voiced outrage.

"This is the time for Chancellor Reed and the Board of Trustees to pull the plug on this secret lobbying corps, this secret force," said state Sen. Gloria Romero, D-East Los Angeles, who chairs the Senate Education Committee.

"There is no need for these lobbyists. There is no need for us to spend this money. Government relations offices are established at public universities for the direct purpose of interacting with the Legislature," the senator said. "So what the CSU has done is go beyond established protocol and use these special contracts that are not directly reportable to defeat the legislative interest of the people who pay the bills."

Salary Disclosure Blocked

Trent Hager, chief of staff for Assemblyman Anthony Portantino, D-La Cañada Flintridge Los Angeles County, said CSU paid the two lobbying firms in 2007 to derail his boss’ bill aimed at full disclosure of CSU salaries. "They got it sidetracked and killed," he said.

In addition, CSU paid $38,000 to Capitol Advocacy last year to monitor legislation to provide affordable housing for Iraq war veterans, according to reports filed at the California Fair Political Practices Commission, although the university took no position on the bill.

CSU Spokeswoman Claudia Keith said the outside lobbyists tracked the bill "because of housing programs at our campuses." But the bill dealt only with housing projects leased for at least 55 years by federal or state Veterans Affairs agencies. It was passed by the Legislature and signed by the governor.

Sloat Higgins tracked a money laundering bill for CSU in 2003, Keith said, because of concern over how it might affect fund transfers for the university’s international programs, but did not take a position on the legislation. The bill, which set higher penalties for money laundering linked to terrorism, was voted down in committee in 2004.

Sex-Offender Bill Tracked

CSU paid Sloat Higgins in 2003 to monitor a sex offender bill to determine what kind of disclosure rules it contained for state agencies, Keith said, but never took a formal position on it. The bill was passed by the Legislature in 2004 and signed into law by the governor.

Both lobbying firms were paid by CSU in 2003 to watch a bill intended to protect tribal cultural places on public property. CSU took no formal position on the bill, Keith said, but it was tracked for one quarter because the state university has Native American sites and "to make sure it did no harm." The bill was approved in 2004 by the Legislature and signed into law by the governor.

Since taking over the chancellorship of the nation’s largest four-year university system in 1998, Reed has granted a total of about $2.4 million in no-bid contracts to Capitol Advocacy and Sloat Higgins. These powerful lobbying firms have a host of clients including Fortune 500 companies; Capitol Advocacy’s clients also include California Indian tribes that own gambling casinos.

Retainer Fees Paid

But nearly $400,000 of those funds were paid to the two lobbying firms during months of the year when the firms performed no services for the CSU system regarding administrative or legislative actions, state records show.
Keith said the firms were on a monthly retainer as per their contracts.

CSU’s long-term retention of outside lobbyists is highly unusual among California state agencies and publicly financed institutions. Typically, state agencies rely on staff for courting key lawmakers and do not use taxpayer funds to hire private lobbyists.

The University of California only rarely uses outside lobbyists when particular expertise is needed, UC officials said.

Ron Owens, a spokesman for California Community Colleges, said his system does not use outside lobbyists. "We do have a government affairs office that does our legislative advocacy work at the state Capitol and an assistant vice chancellor who handles the federal side," he said.

Why Not In-House Lobby?

Critics question why this kind of work is not done in-house by CSU staff, especially in lean economic times. They say the flow of public largess from the chancellor has few checks and balances, and the returns are questionable.

"The CSU has been particularly aggressive about pursuing this style of privately influencing government," said Dan Heller, executive director of Consumer Watchdog, a nonprofit organization that monitors state politics. "The state university system is paying high-priced lobbyists to trade on their political influence in Sacramento. At the end of the day, that’s not good for our public school system. Private interests win out."

Private Lobbyists Defended

Others defend CSU’s use of private lobbyists.

"We would call upon them to do some extra lobbying if a high priority bill got to the governor’s desk that needed to be killed or signed," said Jeff Vaca, a former CSU in-house lobbyist/analyst. "When the issue is big enough, you can never have too much help."

Patrick Lenz, a former employee in the CSU governmental affairs office, said Reed’s use of private lobbyists helps "ensure that the university’s position is well understood by policymakers."

In selecting Capitol Advocacy and Sloat Higgins, the chancellor’s office bypassed scores of other lobbyists. According to CSU records, the two lobbying firms were awarded contracts because of their unique qualifications.

Hubert Riley, a principal of Capitol Advocacy, is deputy executive director of the Democratic Governors’ Association and has extensive ties in Sacramento. Reed himself hired Riley’s firm in 2001, according to CSU records.

Connections To Lobbyist

The chancellor is acquainted with Riley’s father, Richard Riley, a former U.S. secretary of education. Reed and Richard Riley have served together on at least three education boards and commissions. CSU’s Keith said Reed has known Richard Riley and his son for 30 years.

Kevin Sloat, who heads the Sloat Higgins firm, served as legislative chief of staff for former Gov. Pete Wilson, a Republican. Sloat was initially retained in 1997 by former Chancellor Barry Munitz.

Neither lobbyist would comment on their CSU work.

Under CSU policy, university officials must identify in writing three additional firms that they surveyed with regard to a no-bid contract. CSU officials did not do this.