Good morning, Chairman Piccola and members of the State Government Committee. Thank you for this opportunity to comment on Senate Bill 1, which seeks to amend the State's Right-to-Know law in ways that will have a profound negative impact [Tell us how you really feel.] on Pennsylvania's state-related research universities.
First, perhaps you are not aware, but Penn State already opens its financial books to you and the public. The online version alone represents 5,000 pages of [largely uninformative] budget detail. In fact, every year, as required by The Higher Education Fiscal Information Disclosure Act, we deliver detailed reports on our finances to the General Assembly and post the same information on our Web site. These reports (described in detail in an addendum) answer nearly every conceivable question about how we spend taxpayers' funds except for the individual salaries of our employees.[Here is an exercise for the readers. Follow the links to the budget and try to find out how much the University spent to hold a Trustees meeting in New York City in November of 2004. Also see if you can find out who or what organization donated money to help defray the cost. This is relevant since it could have been someone or entity (RIAA?) with business before the University. I won't sit arround and wait to see what you find.] Let me make myself perfectly clear -- this proposal goes far beyond making Penn State accountable for how it spends public funds. Nobody would argue the point that the public has a right to know how public funds are spent [...,but I will.] But this bill will fundamentally change the way we operate, the way our trustees govern, and the way I administer their policies.[In the same way that the successful lawsuit opening up PHEAA's finances has changed the way they do business.] Frankly, we will have to operate in a way that will make us less nimble and less competitive with the other major research universities in the nation. [When administrators start talking about nimbleness and competitiveness what they really mean is that they are worried that they will have to justify the unjustifiable]
The fiscal information disclosure requirements in our annual appropriations bill currently provide the right balance of access to information and public accountability without adding crippling new costs, which would diminish the excellence of the University and make it less competitive nationally. It remains the most appropriate mechanism to guarantee higher education accountability and public access to information.[Don't you think his language is a bit over wrought. One might think that he has something to hide.]
Adding state-related universities to the Right-to-Know law would have serious unintended consequences not in the best interests of the Commonwealth . I worry about the creation of a new and expensive bureaucracy to control and process requests for information (and perhaps extensive and expensive litigation over the law's meaning and effect).
Examples of unintended negative consequences of applying Right-to-Know provisions to state-related universities are:
- By opening all files to the public, including vendors, the University would suffer a substantial loss of competitive leverage in negotiating contracts for the purchase of goods and services, leading to increased financial and operational costs.[The word on the street is that vendors that get contracts with the University have it made in the shade, because Penn State buys only the best. I don't know if that is true, but opening things up would reveal if it were.]
- Revenues from the lease and sale of intellectual property would likely fall, since if the terms of such agreements became public, prospective corporate partners would be reluctant to pay any more than the lowest-paying partner.[Could the lowest paying partner have some sort of inappropriate sweetheart deal with the University? Opening things up would answer that question.]
- Senate Bill 1 could block the University's opportunity to invest its endowment in various attractive funds, which will not permit their specific investment strategies and holdings to be publicly disclosed. We have already been so notified by some of our investment funds.[This is a good one. In fact, the US Senate is a bit concerned about universities which enjoy tax-exempt status investing in some questionable funds.Graham may be testifying before the US Senate very soon.]
- Senate Bill 1 will severely limit the University's opportunity to enter into contracts with outside entities that do not permit the terms of their agreements to become public due to competitive concerns (examples include our lucrative partnerships with Nike, Highmark, Pepsi, Barnes and Noble, and others).[Graham you can't be serious, can you? Your relationship with corporate America is more important to you than your relationship with the citizens of Pennsylvania who, by the way, provide you with far more money than these contract do. What about questionable aspects of these deals?]
- Each year Penn State spins out companies and licenses technology. The details of the deals surrounding licensing fees, royalty structure and equity stake vary with each technology. If the details of these deals were publicly available, the ability to negotiate the best terms would be compromised. Senate Bill 1 would make Pennsylvania's public research universities, and as a result the Commonwealth, less attractive for such partnerships. This would hurt Pennsylvania's economic development goals. [Universities are supposed serve the public good. In fact, the justification for these corporate deals is that they provide the holy grail of jobs. Are the costs of such deals higher than their benefits to the Commonwealth? Do the benefits trickle down? I think the citizens have a right to know.]
- Penn State ranks second in the nation in grants and contracts from Industry ... about $100 million per year. It is well recognized that contracts with industry can be challenging. Making details of contracts publicly available will threaten our competitive position with universities outside of Pennsylvania, as well as with private universities within PA with whom we compete.[See my last comment.]
- Senate Bill 1 could compromise donor confidentiality. The following information and activities are presently confidential. Exposing these elements and other information of similar content to the public eye would have a chilling effect on donors and would negatively impact our private fundraising productivity: individual donor gift histories; donor gift agreements; the payment vehicles donors use to satisfy their pledges; the assets donors use to satisfy their pledges (i.e. securities, real estate, artwork, etc.); donor research profiles and wealth estimates; donor contact reports, including confidential meetings with a donor's personal legal or financial adviser; expenses associated with donor identification, cultivation, solicitation and stewardship; and minutes of staff and volunteer meetings involving donor strategies.[This is a legitimate concern. I am not certain about Pileggi's legislation, but Mahoney's (D-Fayette County) House bill allows for donor confidentiality while making provisions to avoid conflicts of interest.]
- Senate Bill 1 will create a further erosion in privacy rights of individuals whose personal/confidential information is part of documents falling within the scope of Right-to-Know Act requests.[Again I am not very familiar with Pileggi's bill, but the Mahoney bill address this.]
- Senate Bill 1 could hinder incentive and merit pay programs for faculty. It could allow competing universities to raid the Commonwealth's research institutions.[Translation:we won't be able to underpay certain faculty while overpaying others.]
- Senate Bill 1 will chill certain economic development activities if proprietary/confidential business information is subject to disclosure under the Act.[Back to the business crap again. Who owns this guy? The large number of references to business alone should send up a warning flare that Penn State must be made to open up its books.]
- Senate Bill 1 would require various departments and student organizations to invest enormous resources in researching and copying all kinds of detailed information requested by advocacy groups and protesters intending to deliberately interfere with and halt normal operation of the University. Unreasonable and repetitive requests could paralyze our operation.[Graham put it on the web and let people get it as they need it. It's our information not yours.]
- Making individual salary information public would increase administrative costs, pose a constant detriment to employee morale, severely inhibit the use of merit as a basis for the salary structure and reward system, limit management flexibility, and make the University more vulnerable to increased competition and raiding from other institutions for quality faculty members.[He really is focused on the whole pay thing. This is his second bullet point which discusses it. Maybe he doesn't want anyone to find out his complete compensation package.
Again, how in the hell does opening up salaries "inhibit the use of merit as a basis for the salary structure"? If the salaries can be justified on the basis of merit making them public shouldn't cause any trouble. On the other hand, if salaries are based on cronyism, then all hell is going to break out. Is that what you are afraid of? The constant detriment stuff is way over blown. I'll admit that initially the morale of some employees will suffer, but in the long run pay will come more into line with performance and moral will rebound. ]
- Speaking of Penn State's competitors, why this bill omits state-aided universities is baffling. It is as if you are determined to put the state-related universities at a competitive disadvantage and reduce us to a lesser and minimally competitive status. Like the University of Pennsylvania, Penn State and Pitt are members of the highly selective Association of American Universities, and are major national research universities. In the latest published National Science Foundation's rankings of research expenditures Penn State ranked ninth in the nation -- Penn was 10th. We compete with Penn, CMU, Cornell and other major national research universities for faculty, public and private research dollars, students and so on.[Graham how does this bill place Penn State at a disadvantage? I can assure you that most people offered faculty positions at Penn State and one of those other schools will take the other school's offer. Penn State despite all the money it gets to do research is, for the most part, an intellectual backwater.And Graham if you weren't so busy kissing corporate ass you may have been able to do something about this. I am starting to think that you're just throwing shit at the wall to what sticks. For example, how does this bill hinder Penn State in the competition for public research money? ]Yet while Penn, Drexel and 24 other institutions collectively receive well over $100 million in nonpreferred appropriations from the General Assembly, they are not included in this bill. Why? [Graham here's a guess. I can divide and that comes out to $3.85 million per school. Penn State in FY 2006-2007 received $328 million from the state which is a little more than 85 times the average amount those 26 schools received. I'd say that has something to do with it. And Graham ,Mahoney's bill does cover state-aided schools.] I am guessing that someone must have correctly determined that it would put them in a competitive disadvantage, or that their receipt of public funds was a sufficiently small portion of their budget to not make them "public" for purposes of open records. Like these other institutions left out of SB1, Penn State receives a very small portion of its budget from the state -- less than 10 percent -- yet this bill would open up the entire University to open records, regardless of its impact on our ability to compete.[Graham your guess is just way off the mark, and, as is typical for you, rather self-serving. It is certainly about the absolute number. I am sure you realize that for FY 2006-2007 state-related universities received more in state funds than did the state-owned universities and the state-own schools are covered by the current Right-To-Know law. I haven't heard them bellyaching about it. In fact, Penn State alone received nearly as much money as did the state-owned universities.The state budget is here.]
This bill does far more than feed the prurient interests of newspaper editors who are looking for a headline about how much Coach Paterno makes -- as if one could put a dollar value to what he deserves to make based on his contributions to this state since he arrived in Pennsylvania nearly 58 years ago. [The last refuge of a scoundrel:blame the press.]I would point out that no tax dollars support his salary.[I would like to point out that the current lawsuit, now before the state supreme court, to have his salary publicized concerns not the funding source of his salary, but the funding source of his pension. That would come out of the University's operating budget which is supported with state funds. Further the pension is guarrentee by the state. Graham, you don't real reflect well on Penn State when you engage in such sophistry.] As you know, our Board of Trustees has a long-standing policy regarding the privacy of individual salaries. What we are concerned about is the impact that opening up University salaries would have on Penn State's ability to compete in a global marketplace for the best faculty and research scientists[Here's the deal, you rarely hire the best as it is. It's not about the pay. It's about the anti-intellectual climate which you foster.] who we ask to come to Penn State to teach and do critical research that supports the state's economy and quality of life.[Here is an example of that anti-intellectualism. You failed to mention pushing back the frontiers of knowledge which is the primary purpose of university research. For you it's all about helping out your corporate buddies in the name of economic development,i.e. trickle down.] That's what's at stake -- Penn State's ability to teach, do research and serve the Commonwealth and its citizens -- and that's why I wanted to personally attest to the impact of this bill before you.[[Oh my gaud! Open Penn State's budget and we'll all die!]
There are two things that stand out in Graham's testimony. The first is his obsession with making salaries public. My guess is that he and his brain trust have decided that people in general don't think what they make is anybodies business. Hence he is playing on these sympathies. The second thing is that he is more concerned with corporate interests than he is with the interests of the citizens of the Commonwealth. All-in-all he has made a very strong case for the need to open things up at Penn State. That of course is a "unintended negative consequences" for him.
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