Goodwin Says Closed Meeting Was Legal

William H. Goodwin, rector of the University of Virginia, has disputed the account by former rector Helen Dragas that a June Board of Visitors meeting held in closed session violated the Freedom of Information Act.

The Freedom of Information Advisory Council issued an advisory opinion Friday saying that the board appeared to violate the law, assuming events unfolded as alleged in a letter written by Virginia Beach attorney Kevin E. Martingayle at Dragas’s behest. (See details of the opinion here.)

During a break in the orientation program for new board members Sunday, Goodwin told the Daily Progress that the narrative was inaccurate, but declined to get into specifics. “I think it was disappointing they would write such a lengthy article based on what one person said,” he said, referring to the 5,000-word opinion.

The board voted to hold a closed session to discuss personnel and legal matters. Dragas, whose term on the board has since expired, said that the board discussed substantive details of a $2.3 billion Strategic Investment Fund, a topic that should have been aired in open session — a charge seemingly backed by the distribution of guidelines for spending revenue from the fund that were tagged for discussion in “executive session.” University officials retorted that board members “asked questions about the Fund that deviated from the designated personnel topic” and that when university counsel brought it to his attention, Goodwin “ended the discussion.”

— JAB

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39 responses to “Goodwin Says Closed Meeting Was Legal

  1. >>University officials retorted that board members “asked questions about the Fund that deviated from the designated personnel topic” and that when university counsel brought it to his attention, Goodwin “ended the discussion.”

    It would appear that both accounts could be true: Dragas, that there was discussion of the Fund, and University officials, that counsel awoke from his sleep to shut down the discussion. I think the only remaining question under most Open Meetings Acts would then be: discussion for how long. In either closed or open circumstances, it’s clear that decisions have to be made on the record in open session.

    We were always taught that if your client is in a meeting with competitors and any of the competitors starts talking about prices, your client should get up from the table, tip over the pitcher holding the water (to mark the time), and leave the room.

    I wonder if anything similar happened at this particular U. Va. meeting

  2. deep deep into kabuki theatre …. the meaning of “is” and all that rot!

  3. and it started so well!!

  4. OOPS – looks like it’s SPREADING!!!

    ” As state legislators prepare to interrogate University of Virginia administrators over a new $2.2 billion investment fund, congressional committees already are scrutinizing the sizable endowments of two of the state’s top private universities.
    The University of Richmond and Washington and Lee University were among 56 private schools with endowments exceeding $1 billion that were told in February to submit details on how they manage and spend their wealth.”

    http://www.richmond.com/news/article_a5f6696d-111c-5c4b-a5f1-8a96eb6ba233.html

  5. Goodwin lacks credibility. Goodwin was quoted as saying, “Over the next decade, these investments should elevate the University to be among the top 10 universities in the nation, while keeping our net tuition costs among the lowest in the country.”

    US News & World Report started ranking universities in 1983. At first, they only published the rankings every other year. In addition, they didn’t rank all the big universities. They ranked those who cooperated. The University of Virginia was first ranked in 1988, when USN&WR began ranking essentially every university in America. UVA was ranked #14 overall in that inaugural ranking (1988). USN&WR ranked all the universities every year from 1988 to 2015. By 2015 UVA had dropped to #26.

    Goodwin contends that spending billions will take UVA into the Top 10 within a decade. So, the University of Virginia fell 12 slots over 27 years. Now, UVA will rise at least 16 slots in ten years. Or, so goes the snake oil Goodwin is trying to sell us.

    This is a slush fund, pure and simple. Whether it is a hidden, illegal slush fund may be open to interpretation but it is most definitely a slush fund. Why? Because the definition of a slush fund is a reserve of money that can be spent without reasonable explanation by the people charged with administering the money.

    Claiming that the University of Virginia will become a top 10 ranked university within a decade is pap. The University of Virginia has never been ranked in the top 10 by US News & Word Report – the most authoritative source for college rankings. As far as I can tell, no university has ever risen 16 slots in 10 years.

    How will this play out? Unless the relatively few competent state legislators who are challenging this slush fund succeed in stopping the Board of Visitors, the money will be wasted on the whims of UVA’s administration and Board of Visitors. Ten years from now the BoV will find UVA ranked in the top 10 for “public universities founded by former presidents in states starting with the letter V”. Victory will be declared as the administration and BoV share bourbon and branch water served on the steps of the Rotunda. In other words, it will be Virginia as usual.

    • Emory University went from 25th to 9th in a matter of 6 years in the US News rankings.

      • Emory is private. The private schools have, in general, gone up while publics have declined. (Vanderbilt, Wake Forest are other examples of private risers. Wake wasn’t even ranked as a “national” university a short while ago and is now ranked right next to UVA.) UVA would have to buck the trend to achieve its goal and that is what is difficult to envisage if it stays on a public school funding model. Given the weighting USNews places on items that are dependent on resources, the SIF would be necessary but not sufficient for UVA to achieve its objective. The necessary part would be to move away from the public funding model to one that is private or close to it.

        I saw a telling graphic that showed top 50 or so USNews schools by ranking and total resources (funding). The biggest outliers by far were UVA and William and Mary, which were rated far lower in resources than in ranking.

        • Yes, DonR fails to mention that if U.S. News used the same methodology that it did in 1989, U.Va. would rank in a tie for 17th. Berkeley would rank 9th. Those rankings, most assuredly, are no longer the most respected rankings for the fact that you cite: they are completely slanted against the public schools due to the increasing weighting of faculty resources and student resources in the U.S. News methodology.

  6. The matter should be settled in court, with all the attendees required to testify under oath and be subjected to cross examination.

  7. just to be clear the NON-Dragas definition of slush fund:

    ” Slush Fund Definition | Investopedia

    DEFINITION of ‘Slush Fund’ Money earmarked for a loosely defined, but legitimate, purpose that is instead surreptitiously used for an illegitimate purpose. The term “slush fund” indicates a fraudulent use of money.

    then – THIS is, in essence, UVA’s argument as put forth by Peter F. Lake, director of the Center for Excellence in Higher Education Law and Policy at Stetson University College of Law in Florida:

    “For wealthy universities, the focus is more about increasing the value of the education to the student than on lowering tuition,
    “When you look at elite institutions like U.Va. and Harvard, value always dominates the discussion, just like it does in any elite shopping experience,” Lake said. It’s critical to have the best facilities, labs and professors.

    “All of that comes at a tremendous cost and may not end up reducing tuition but certainly improves the value of the education,” he said.”

    I don’t necessarily buy the argument lock, stock and barrel but it does have some plausibility… UVA IS, in fact, branding their degree as an exceptionally valuable product …well worth the money over those other degrees….

    but Don tickles me …. he wants ” relatively few competent state legislators ” (gawd forbid not that whole entire Clown Show Don snorts about) – anyhow.. a “small group of legislators” – no doubt with Dragas as the lead cudgel wielder – to wack the UVA miscreants including the BOV and make them do “right”… oh be still my heart…

    Now.. I just don’t know how that works… if it’s not big hammer that that Clown Show in Richmond wields then what exactly is this “small group” going to use to make them do right?

    Don, my man… you’ve performed the infamous pretzel move here … you’ve twisted and turned… and just twisted yourself into a classic Clown Show Pretzel!!!

    😉

    • The Imperial Clown Show in Richmond is the General Assembly as an institution. Just like there are some Philadelphia Eagles fans who are not asshats there are some clown show members who are not clowns. However, in aggregate, our legislature is a clown show and Eagles fans are asshats.

      Say … that’s not kelly green, silver and white I see on your shirt there Larry, is it?

    • Classic LarrytheG …

      There’s nothing Obama can do about the economy.
      There’s nothing the state legislature can do about the spending of billions of dollars of public funds.

      Oh … but more and bigger government forever!

    • Larry – how should value to the students be measured? Starting salaries, lifetime earnings, percentage of applicants getting into graduate or professional schools? While I might be wrong, I suspect this is just a BS statement from those who want access to the money.

      • @TMT – well an obvious one would be starting salary, right?

        there are others – I’m not an advocate here – just pointing out that there are metrics and that people do make decisions on perceived “value”.

        You’re a lawyer – I bet some law schools are highly respected and in demand and others less so -right?

        heck – I bet dollars to donuts you read Consumers Reports, and other rating

        • Larry – I’m not trying to pick an argument – just identify what criteria should be used to measure value to students and prospective students and their often bill-paying parents.

  8. well no Don… it’s asshat brown… 😉

    tell me the plan for the Dragas/Petersen Jihad… how are they going to slay the UVA dragon?

    • Not sure Dragas has anything to do with Chap Petersen. As for the legislature – they should grill every nominee to every board of visitors like a proposed Supreme Court justice before the US Senate. They should insist that the nominee agrees to tender their resignation from the board if asked to do so by the governor. As for the governor – he or she should appoint three sitting members of the General Assembly to every state board. Not so many people that they can control the board but enough to ensure that some elected officials can stand up and tell the citizenry what the hell is happening inside these multi-billion dollar state assets.

  9. surely you’re not suggesting putting the clown show guys on these boards… right?

    You know dang well most of them would be asking for gifts and tickets to games as such in return for being “nice”… right?

    bzzzzt… try again Don… you keep going back to that Clown Show well for your answers…

    • Until we rewrite the state constitution our best hope is to reform the Imperial Clown Show in Richmond to be less clown-like. Given the fact that billions of dollars are magically appearing while tuitions spiral out of control with no apparent knowledge of any elected official – yes, I want three members of the General Assembly on each and every public university in the state. If the board randomly tries to fire the president I expect the GA members to be ready to explain the decision to the public. If UVA decides to spend billions of dollars on the hallucination of becoming a top 10 ranked university within a decade I expect our GA members to be ready to explain how that could possibly be true.

      Let’s be honest, the Board of Visitors for Virginia’s public universities are political cronies who are appointed more because of their willingness to donate funds to Virginia’s politicians than any particular background or skill in education or management. They can be appointed but they apparently can’t be removed – by anybody. Unbelievable incompetence. At least the voters could take retribution in the voting booth against the General Assembly members who are on the Board of Visitors when the kind of shenanigans we’re seeing today are exposed.

      It’s pretty simple, Larry – if you run for office in Virginia you are accountable for the assets of the Commonwealth. Those assets include billions of dollars rolling around in loosely managed slush funds inside the pubic universities.

      Bacon says there could be $9B in total rolling around in Virginia’s public universities. That’s $1,125 for every man, woman and child in Virginia. That’s almost $8,000 my family could spend if the overages were refunded to the citizens of Virginia on a per capita basis.

      Repeat this over and over to yourself – “This is not UVA’s money. UVA has no money. UVA only has the money of the taxpayers and citizens of Virginia. They are not allowed to hide that money. They are not allowed to discuss what should be done with that money behind closed doors. They are not allowed to deceive our elected representatives. It is not their money.”

  10. Now Goodwin has formed a committee of other foxes to reiterate what’s happened in the henhouse. hiis time he’s included new foxes who weren’t even around when this began. http://www.richmond.com/news/virginia/article_9c80bf21-7119-5cda-9501-151ffa2173f1.html

    This would have been so much more simple if Goodwin had simply said, “let’s make sure we get this right, important investment and all, we’ll peel back the June meeting and repeat.” Why would you want to proceed with any doubt that you haven’t fully vetted what you’re about to do with $2.2B (somewhere $100M has disappeared in a couple of months, but that’s for another investigation).

    • This is the best argument I know for why the Rector must be telling the truth as he saw it at the time: there is no problem here, there never was, it would have been easy to fix if there was but there’s simply no need to re-do this vetting because it’s been a fully transparent process all along and the discussion at the wrong time (during the closed session) was a glitch not a fatal error (and halted in time to be harmless).

      So why are we still talking about it? Obviously it’s not the FOIA concern itself but the creation of the SIF that rankles “some folks”. Anything to embarrass those elitist snobs with private university aspirations for the good old State U.

    • Now we are getting to the truth of what is really going on.

      In order to be Vanderbilt, to replicate Vanderbilt’s rapid rise through the ranks, the UVA must very substantially raise its tuition for all students, admit far more out of state and foreign students, and thinks it needs (and/or wants for ego purposes) to hire far more all star faculty, and to give that all-star faculty what they want and demand in today’s market. This requires UVA’s expensive and risky investment in new infrastructure that is controlled by individuals within that All Star faculty. And that UVA give those all star individuals the freedom to sell their services and products from the infrastructure to the outside world as paid consultants or entrepreneurs, and that UVA allow those individuals to keep most of the proceeds and profits from those individual endeavors and joint ventures.

      This in turn also allows those All Star faculty to do ever less teaching of students, which work then must be left to non tenured adjuncts and junior professors. Here again UVA picks up that bill too, namely paying an ever larger number of adjunct and assistant professors, as well as post doctoral and graduate teaching assistants. See where we are headed here, back into a kind medieval feudal system, a permanent chain of being system, mandated by the 21st century cast system, with the University administrators sitting on top, pulling the strings, handing out goodies, controlling what over time has to become a corrupt system ruled by Byzantine politics ruled by favors, secrets and bribery.

      This is the guts of what UVA wants to be, and will become if it gets there. But the truth is that the fact that UVA is a public institution under the control of the state is what is now standing in UVA’s way. UVA knows this. This is what UVA thinks, and rightfully so, for many reasons.

      Here are a few of those reasons:

      All of this requires that potential UVA students be treated no better than out of state or foreign students. So, to do what UVA wants to do, UVA must go private like Vanderbilt and Duke, while it pretends to be public to keep the truth away from the public and keep the money flowing in from the State. Here the tactic is to shifts the burden of subsidizing in-state students and out of state students over to the state (while UVA takes in full tuition), and also if necessary shift the blame for treating its state applicants like any other applicants onto the Generally Assembly and the Board of Visitors if the Board fails to behave and go along with the grand plan. Here apparently the Board of Visitors “has been convinced” to act against the interests of the vast majority of its state citizens, contrary to the obligations of a public university. Apparently the Board now feels if has to political cover to take those actions and withstand the heat, but cannot be straight and upfront about what it is doing, and must also shield itself and UVA generally from any legal pitfalls. So it is playing a very delicate and risky game being played it. Showing just enough skin over the past four years to claim that it has been fully transparent when in fact it has not been fully transparent.

      This is what the coyness about what the Rotunda renovation is really about. It is not really about building a library and more classrooms for students in the Rotunda, although that is the official line. Nor is the Strategic Investment fund about helping and promoting the interests of Virginians, that is maintaining their advantage over out of state student. No, that 2.3 billion all about just the opposite, leaving far more Virginia students out in the cold. Just like Princeton has left all but a few kids from New Jersey out in the cold. Which is what all elite world class institutions of higher learning do every day, and do so legally, because as private institutions they have every right to. Even though UVA does not enjoy similar rights. Unless UVA can find a way to escape the ties that bind it to the State of Virginia.

      • Bingo.
        Did you know that one of the boasts Terry Sullivan makes is about opening office in Beijing?

        • Oh, Yes, all the world is Terry Sullivan’s stage. Her visit to China reminded me of Obama’s Citizen of the World speech to the masses gathered down the street from the Brandenburg Gate while running at the time for President of United States.

          Fortunately, the German Authorities had the good sense and common decency to keep the Citizen of the World away from the Berlin Wall and its Gate that a real US president and a real Catholic Pope help to bring down into rubble.

          Of course the Nobel Prize Committee took the rotten bait and awarded the Citizen of the World a Nobel Peace Prize after he’d been president for a few months. What a faux world of nonsense our leaders today live in.

      • Good points Reed. I think UVA may already spend enough money to provide an excellent undergraduate education. It is only in the USNews rankings world, which focuses on resources rather than outcomes, that this is not enough. So it has become an out of control resource arms race.

        The “private” schools are largely “winning” this arms race because they have more funding options to leverage. I put private in quotes because they are using government funds and policies (Pell Grants, research, tax exempt status granted to non-profits that allows them to accumulate enormous endowments) to do it.

  11. fyi …. ” … The Strategic Investment Fund, which has dipped in value from $2.3 billion to $2.2 billion…. ”

    “The reserves have been accumulated through sound financial management from the following sources:

    In June 2009, the University held approximately $620 million in unrestricted funds and related earnings that had accumulated in its history and were invested with the University of Virginia Investment Management Company, or UVIMCO;

    The University’s operating reserves of approximately $385 million for the Academic and Health System divisions, principally set aside since 2009 for working capital, future capital needs for major maintenance, requirements of its self-insured health plan and other operating needs, which also were invested with UVIMCO;

    Since 2009, investment earnings realized on University operating funds held at UVIMCO were approximately $700 million, a result of robust average annual returns.

    ” Q. Is the fund intended to provide money for operations?

    A. No. Operations are recurring expenses necessary to run the University. These expenses are funded by ongoing operating sources, such as tuition, state appropriations, research grants, patient revenue, endowment spending distributions, annual giving and auxiliary services.

    Q. Are any tuition or state monies supplementing the Strategic Investment Fund?

    A. No. As stated above, tuition and state appropriations are used to fund operating expenses.”

    This seems fairly straight forward unless someone is alleging that these statements are not true.

    but at the end of the day – this stuff is getting further and further down in the weeds… and I’m not sure exactly what the disaffected are actually looking for in terms of information…itself.

    in terms of the closed meeting – no question – they were playing games… but the numbers… and the funds? are they siphoning tuition or state money into the strategic funds or is the issue that the funds should be used for buy down tuition rather than strategic purposes..???

    what is the smoking gun being looked for?

    • I’ve said all along, this is not a smoking gun issue, it is rather a set of questions about a very large resource that has been repurposed by a handful of people without sufficient discussion. I applaud the excellent work by UVIMCO, and applaud Goodwin and Hogan for seeking a path to put the money to work by freeing liquidity in exchange for lines of credit. But at that point, there should have been broader discussion. If your strategic plan is to privatize, then say so. No subterfuge or masking that goal.

      “$620 million in unrestricted funds and related earnings that had accumulated in its history” In my book this is a lot of bank that requires a little more detail than the above description. How can the school not have been overcharging students if it can amass $620M from unspent operations funds? In another industry you might call it price gouging.

  12. Interesting presentation. From $170 million state appropriations in 2000 to $152 million in 2016 with a growth of 1700 Virginia students…..for Petersen to make any attack on the University is ludicrous when you look at the state’s diminishing contributions to U.Va. Factoring in inflation, it’s at least a 20% cut in state appropriations from FY2000 with 1700 more Virginia kids.

    Quite simply, this has nothing to do with Virginia’s “middle class.” There are a lot more ways to actually help those in the middle class afford higher ed. Funding state universities like North Carolina does would be much more beneficial to middle class families than grandstanding.

    Talk about taking a sledgehammer to Dragas with facts:

    http://www.virginia.edu/bov/meetings/'16%20RETREAT/SIF%20with%20annotations%2008-11-16.pdf

    • Would you prefer that UVA had culled more of your tax dollars? Apparently, it doesn’t need any more money. As for facts and sledgehammer, not sure why you think this representation by one side has any more validity than the whistleblower’s. They’ve varied the slicing and dicing is all I see, along with semantics. You may not believe one but nor should you swallow the response of the other.

    • Really? Goebbels couldn’t have written more of a propaganda brochure. I especially like the section where they claim that rankings reflect quality. Maybe so. But UVA has gone from being rated #14 by US News & World Report in 1988 (the first year it was rated) to #26 this year. Rankings do reflect quality and the quality and rankings for UVA are sinking like a stone through water. Now they claim that if they can splash billions of dollars on pet projects UVA will become a top 10 rated university within a decade. What a croc.

      The administration and BoV of UVA are a group of effete snobs who think that our money is their money. They were largely appointed based on the political donations they made to Virginia’s politicians and they see UVA as their private preserve for the advancement of their private social agenda. They are accountable to nobody and are prone to making drunken boasts (like getting into the top 10 in 10 years).

  13. I keep reading conflicting versions of where these funds come from.

    One version is that these funds are entirely endowment and money from fundraising.

    The other is that they include money from the State.

    so which version is true?

    • That is a very important question. It needs to be answered with details.

      • With details, under oath with the respondent subject to imprisonment for perjury. One thing I know – a thousand angry politicians carries less weight than a single orange jumpsuit for the kind of wheedlers who become Board of Visitor members.

  14. I think you guys are falling back into platitudes and political feel good statements. It is a great thing to create a Princeton. It is a bad thing to create a Princeton by stealing somebody else’s university to do it.

    Based on their track record to date, I would not trust this crew as far as I could throw them, without complete transparency and full debate by all stakeholders. Competence does not trump means. Hitler took a basket case Republic and restored it into one of history’s most competent nation states until he blew Germany up. Competence is not the issue here. Long term results, and the risks and consequences and legality of getting there are the issues at play. And to date they have been obscured and hidden far more than they have been highlighted and opened up to fair, reasonable, and likely legally mandated public discussion.

    • Reed – if UVA is using endowment money and fundraised money and not state tax dollars – who are the stakeholders?

      • That’s why I say you can’t rely on UVA’s “facts” as provided, yet, because they’ve demurred on this. The responses to Dragas’s findings line by line is the first time I’ve seen endowment mentioned, which doesn’t line up with their previous accounting on balance sheet in November when the $600+M was shown in Operating Funds. Endowment funds or gifts to the schools 20 foundations are private funds, restricted gifts, and not state funds. Operating Funds as defined in the same document would be unspent funds budgeted for Operations–everything but Endowment, and automatically state-owned. Every tuition dollar and foundation grants released to say, build a building, become state-owned. If the university doesn’t spend all, that piggy bank remains a state asset and if invested, the returns on the piggy bank would remain a state asset. Sullivan is still not answering in a way that clarifies–there is only more confusion.

        Considering the ample energy/time/work/expense that’s already gone into this in 60 days; general public is still in about the same spot.

  15. Don’t we know how much they have in endowment and fundraised money?

    I totally agree any state money for operating funds as well as capital funds should be restricted solely to those purposes – not only for UVA by all higher Ed in Va – and if the GA has not specifically done that in law – then I’d bet all of higher ed in Va is doing what UVA is accused of… and I don’t see how you go back and fix it very easy.

    That’s why I think Petersen and company should announce right now – legislation that will restrict state monies to specific purposes from now on – ..

    Even then – you’re not going to force UVA to go in a different direction if they are using endowment and fund raising money to do that…. are you just going to advocate that the State take over the administration of UVA? Even then – I bet the General Assembly itself could not agree on what to do … and many in the GA would actually support UVA becoming a premier Nationally-ranked University because it would also a economic incubator…

    we have competing visions – where some folks want UVA to be an “affordable” public ivy college for middle class Virginians…even at the expense of it becoming a competitive nationally ranked entity.

    but if UVA wants to do that with their endowment and fundraised money – how do you stop them if their alumni, contributors and BOV are in agreement?

    right?

    • I don’t think this has anything to do with endowment funds. UVA reserved cash in order to meet the liquidity requirements of the lenders. These funds were invested and yielded returns. At a time when all three major US stock market indexes hit all time highs UVA throws its shoulder out of joint patting itself on the back for making a decent return. Then they dissemble by claiming that these funds were never earmarked for operations. They were never earmarked for strategic projects either. The funds were a by-product of a strong stock market bolstered by near zero interest rates implemented to minimize the cost of the federal debt held by the public – which has grown 122% since Obama took office.

      If you’re on the Board of Visitors of a public university and you “suddenly” find yourself in possession of an extra couple of billion dollars, wouldn’t you discuss the options for that money with the elected officials who represent the citizens who ultimately paid in the money to start with?

  16. “discuss” with the Clown Show? heck no! If the Clown Show knew you had this fund , they’d cut you even more , right?

    seriously -if these are operating funds provided by the State and they are unrestricted – then what can you say ? If the GA wanted them restricted, they should have done that – not only for UVA but all and not doing that borders on malfeasance when most would know that the recipients would be using them for all manner of discretionary purposes that taxpayers would probably frown on.

    It’s not like the GA does not restrict funds to entities They do it all the time… they do it to local school systems with SOQs and they do it with local courts, law enforcement, fire and rescue, etc…

    this is a whole bunch of guano stew … for those who like slurping it while watching kabuki theater… and these GA guys who are now strutting like peacocks.. they know it and are selling it…

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