Tuesday, June 29, 2010

Why Not Joe?

I know what you're saying to yourself after reading my last post, "Hey, Graham ain't  the right guy to be selling  STEP to working-class folks like me. Old Main shudda sent JoePa out to charm us plain-folk." 

Well, you know that was Plan A. There were supposed to be three "Evenings With Joe Paterno" this spring and before each of them, STEP was on the agenda. Unfortunately, all three of these events had to be canceled because...Well, I'll let Graham explain.
"Coach Paterno has had intestinal issues this summer that have forced him to limit his efforts to team activities and therefore some of his personal appearances have been cancelled," university president Graham Spanier said Monday night in an e-mail.
That's right, Joe hasn't been able to stop shitting himself since Graham told him he'd have to help explain to people why a 500% increase in that tax deductible kickback was really all so working-class.

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STEPing on the Working-Class

Old Main must be very worried about the blowback from the Seat Transfer and Equity Plan (STEP), which raises the kickback required to get season football tickets by 500%, since they've sent  out Graham, a man with the cojones to say,"I assure you, we don't do anything very lavishly at Penn State. We're very working-class when it comes to what we do,"  to do a damage control interview with BlueWhite Illustrated

Let's review some of Graham's working-class bona fides.

First off, Graham just received a contract extension which boosted his salary by 12.9% from $620,000 to $700,000. Com'on, what UniMart clerk hasn't received an $80,000 raise in one year? This is working-class through and through. No?

Then there are the corporate boards that Graham sits on.  In  2008, he made $270,9800 in compensate as a director of US Steel and last year he pulled in another $170,000 from the gig. ...not bad for our working-class hero. He has also sat on the board of Citizens Bank of Pennsylvania  for a number of years and it was announced this summer that he was appointed as a director of FM Global,an insurance company, which according to the press release announcing Graham's appointment does business with Penn State. Unfortunately, these are not publicly traded companies, hence the compensation of a director is not disclosed by either. But this sort of thing is commonplace amongst the working-class. Staff assistants at Penn State are always being tapped to serve on corporate boards.

Of course, we can't overlook Graham's role as the sometimes washboard player in the Deacons of Dixie, a local Dixieland jazz band. This is a very down to earth hobby, very working-class. The Deacons are working-class to the bone. They often preform at the W.C. Handy Festival in Florence, Alabama and what's more working-class than driving to Florence in a beat up RV?

Now, Graham didn't make the trip that year. When he did make the trip, he didn't think the RV was working-class enough.  Here's Graham's concept of working-class travel.

I understand Lear Jets are all the rage amongst retirees on fixed incomes...very working-class.

Like I said, it takes a man with a big set of cojones to live the way Graham does and then to claim that "We're very working-class when it comes to what we do."  Graham doesn't know working-class.






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Monday, June 28, 2010

The real veblen is....

...I can't tell you.  But Adam's column at StateCollege.com today is based on an email interview I did with him last week, so if you want to find out a bit more about what makes me tick head on over there.

And welcome to all of those who are visiting Left of Centre for the first time after reading Adam's column.  Have a look around and come back if you like what you find. By the way, comments are encouraged, whether you like what you read, hate what you read, or have something to add to what you read.

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Sunday, June 27, 2010

What Are Graham's Plans if the Bottom Falls Out?

Last week senate Republicans blocked a jobs bill which also contained enhanced financing  to the states  for Medicaid. Because the states are barred from changing eligibility standards on Medicaid, cuts will have to come from elsewhere in the budget if  Congress doesn't act soon. Our own Ed Rendell told the New York Times,
“It’s a bloodletting.”
[...]

In Pennsylvania, which is confronting a $1.6 billion revenue shortfall, the elimination of the additional Medicaid financing would mean having to come up with $850 million, Mr. Rendell said.
Because the state has already made more than $2.5 billion in cuts since the fall of 2008, when the economy went into a freefall, Mr. Rendell said layoffs were inevitable, not just at the state level but the local level.
It’s going to be huge teacher layoffs, money to our universities, money to the counties and cities, municipal workers, firemen,” he said. “It would be enormously destructive.”
Mr. Rendell fretted that the resulting fallout from the loss of federal money would bring a halt to three straight months of job gains for the state.
“I know everyone cares about the deficit, and so do I,” he said. “But they care about the deficit until the cuts hit home.”
So Graham, what are your contingency plans should these cuts come about?

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Saturday, June 26, 2010

The Full Grassley-Harkin Letter

As I wrote in the previous post, I think the investigation into The Big Ten's tax-exempt status, now that the conference realignment is a done deal and The Big Twelve didn't blow-up, is a dead letter-pardon the pun.  But I would be remiss if I didn't give you a link to the Grassley-Harkiin letter at the Daily Iowan which also has a nice summary of its contents.

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Friday, June 25, 2010

The Big Ten and Chuck Grassley's Encroaching Senility

A bit more on the IRS and The Big Ten. Actually, a bit more on Senator Chuck Grassley and the Big Ten. Most of the speculation around the sports world today is that Grassley and Harkin made the request to the Big Ten for financial data on June 10th before Nebraska was made the offer to join the Big Ten, because they were upset that Iowa State wasn't in the running to be the twelfth member of the Big Ten or alternately that the Big 12 might desolve leaving ISU out in the cold.  The zietgeist is best captured by the DesMoinesRegsister.com.

It turns out that on June 11th Grassley gave an interview to Radio Iowa on the topic. The reporter tells us Grassley's concern is the realignment "...could bring the demise of the Big 12 and hurt remaining schools like Iowa State University." So the zietgeist is on the mark.

In hindsight,  this interview is really interesting for what it reveals about Grassley.
Grassley says, “I’m not one that starts out with the idea Congress ought to or can solve every problem that we have and so I haven’t come to a conclusion of Congress doing anything.” He says there are some angles that could be investigated which may delay or prevent the conference realignment.

“The tax exempt status of these non-profit organizations and the other one is whether or not any anti-trust laws would be violated,” Grassley says. “In the case of anti-trust laws, Congress isn’t going to bring any action under anti-trust laws. That can only be the Attorney General, if there’s a reason for doing it because anti-trust laws have been pretty much the same for 120 years and we don’t prosecute, we only make laws.”
The bit that I've bolded isn't in quotes; its a paraphrase.  But according to the reporter,   Grassley believed that some sort of an  investigation might delay the realignment.

But is Grassley truly concerned that the actions of The Big Ten might jeopardize its tax-exempt status?

Critics of the conference change-ups remind that public universities are supposed to be focused on education, not on sports and making money. Grassley agrees. “Obviously, a tax exemption is for a specific purpose,” he says. “In the case of educational institutions, it’s for the education of kids, so does this in any way promote the education goals of the university?” Grassley says Congress can look into anything but it isn’t necessarily a good idea, and he clarified his comment on tax exemptions.

“I’m not looking for Congress to take action,” he says. “I’ve been asked by people is there anything Congress can do anything about it? I don’t know until you look into it and maybe even after that I’d say it’s not something we ought to get involved in. Lastly, I want to make clear I’m not trying to do anything about tax exemption. In fact, I’m just the opposite. I want to promote tax exemption.”

That's the rhetorical equivalent of a broken field run. Grassley is  telling the reporter, the day after he began an informal investigation into the tax-exempt status of The Big Ten, but a couple of weeks before that investigation became public knowledge, that Congress could look at the tax-exempt status of The  Big Ten, but he doesn't think that it's a good idea for Congress to get involved and, in fact, he supports the tax-exemption. Wow!

Look, I really hope that he and Harkin carry this investigation through, but my guess is that now that the Big Ten expansion is a done deal and The Big 12 hasn't fallen apart this thing is going to go quietly away.  But the real take away here, after watching Grassley's broken field running while he was negotiation HCR with Max Baucus, and now reading this, is that Grassley is getting senile.

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The Big Ten Draws the Attention of the IRS

Someone in an IRS office outside of Washington, DC  searching on the keywords "Big Ten Expansion"  landed  on Left of Centre today.  The searcher  took a few minutes to read the posts On the Big Ten Expansion and a Toothless Faculty Senate and The Big Ten Expansion:Athletic Tail Wags Academic Dog  and was on his  merry way.

This piqued my interest.  Was it a government bureaucrat and college sports fan killing some time on a summer Friday afternoon or was this guy doing his  job? And if the search was job related , what job was it exactly the bureaucrat was doing? So I did my own search on the same string and it may be that the IRS guy was working on this.
Iowa's two U.S. senators are asking Big Ten Conference officials to disclose their expansion plans and release financial information about the league's cable television network.

Republican Chuck Grassley and Democrat Tom Harkin made the request in a June 10 letter they sent to Big Ten Commissioner Jim Delany....In the letter, Grassley and Harkin questioned how the Big Ten's expansion efforts fit with its nonprofit status. Grassley is the ranking Republican on the Senate Finance Committee, which oversees tax-exempt organizations.
Well, it's good to see that I'm not the only one concerned with big time college sports raiding federal coffers. And I hope my posts helped him to begin to dismantle the tax break for big time college sports. Hey, I guy can dream can't he?

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Wednesday, June 23, 2010

Graham Has Found a Way to Get More Federal Tax Money for Penn State Without the Hassles of Haggling for Earmarks or Competing for Grants

Longtime Penn State football fans are outraged, outraged I tell you, by the 500% increase in the fee required to get season tickets for Nittany Lion football games from $100 to $600 per year, i.e. the  Seat Transfer and Equity Plan (STEP).
A fan with four seats near midfield who has been paying $400 in Nittany Lion Club dues will see that price jump to $2,400.
"We can't afford that," said 84-year-old Jim Williamson from Bellwood, a 1946 PSU graduate and season-ticket holder since 1960. "It's just not possible. On our income, we can't do it."
This fall will be the final season, therefore, that Williamson buys his four season tickets.
"I hear a lot of people say, 'I'm not going to renew my tickets,'" Williamson said. "I know there are a lot of people waiting for tickets, but it's going to be interesting to see if they can maintain about 110,000 there for games.
"They're just taking a big bite out of everybody. I don't understand it. It's to hell with everybody. If you can't afford it, get out."
Some seats cheaper
Season-ticket holders still can purchase tickets for the $100 minimum contribution, but they will have to move to other parts of the stadium.
"I won't move," said Williamson, whose seats are in section WF near the 35-yard line. "I picked those seats out in 1960, and I'm not going up in the end zone. That's the dead zone."
I share their outrage, although I never set foot in Beaver Stadium on Saturdays for football games. I'm outraged because Graham has unilaterally decided to stick it to taxpayers. Since 1988, 80% of such donations have been tax deductible.
In 1986, U.S. Rep. Jake Pickle, a UT alumnus and member of the House Ways and Means Committee, wrote an amendment to the tax code that made the pre-ticket contributions 100 percent tax-deductible - but only for fans buying tickets to University of Texas and Louisiana State University games (U.S. Sen. Russell Long of Louisiana was also a sponsor). Two years later, Congress extended the write-off to all universities, although it lowered it to 80 percent.

Since then, donors to university programs - individuals and corporations - have enjoyed hundreds of millions of dollars in tax breaks for contributions linked to college sports events. An increasingly vocal group of critics contends that the untaxed money is in effect a public subsidy that encourages universities to spend more freely on an athletics arms race as schools build bigger and fancier stadiums and arenas.

The river of spending is fed by many tax-free tributaries. This year [2007], football fans will pay about $15 million to the Longhorn Foundation in contributions qualifying them for season tickets. That's a potential $12 million tax break for fans to watch UT football.

Luxury suite leases also qualify their buyers for the 80 percent tax deduction. Tax experts say about 60 percent of a skybox's cost is deductible by donors (the actual value of the room is not). This year, suite sales at Royal-Memorial Stadium will bring UT $10 million in income - about $6 million in potential tax breaks for fans to watch football from a private room.
That's right, Graham is taking more money away from the federal coffers at a time of record high budget deficits. I'm sure all the fiscally conservative Teabaggers in the Nittany Nation will share my outrage and demand that the Congress eliminate this massive give away.
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Tuesday, June 22, 2010

Monday, June 21, 2010

GT, a Member in Good Standing of the Clown Caucus

With only his power of persuasion Obama was able to get BP to place $20 billion in an escrow account as a down payment toward covering the costs of recovery from the blowout at the Deepwater Horizon oil well in the Gulf of Mexico.Republican Study Committee, of which our very own GOP hack GT is a member, react to this accomplishment? I'd have to say not well.
BP’s reported willingness to go along with the White House’s new fund suggests that the Obama Administration is hard at work exerting its brand of Chicago-style shakedown politics. These actions are emblematic of a politicization of our economy that has been borne out of this Administration’s drive for greater power and control. It is the same mentality that believes an economic crisis or an environmental disaster is the best opportunity to pursue a failed liberal agenda. The American people know much better.”
Sure Rep. Joe Barton (R,TX-06), another member of the RSC, took a lot of heat for repeating this "shakedown" claim during his apology to BP, but the whole thing originated with GT's little wingnut club. That's right the official position of GT's club is that holding BP responsible for its actions is tantamount to making it a& victim of Obama's "brand of Chicago-style shakedown politics." However, GT has been quiet on the matter. Someone needs to get GT on the record, does he stand by the RSC statement or does he disavow it?

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The 2010 Penn State Stairs Report

Every February the General Assmebly publishes financial data for the four state-related universities, known  as a Stairs Report,  in a PDF format. I have been converting the data for Penn State to Google Docs spreadsheet format in order to facilatate the analysis of the data and posting the links over to the right. Typically, I do this within a week of the publication of the data. This year I was slow off the mark.  It's finally up today

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Friday, June 18, 2010

The Big Ten Expansion: Doing My Part to Keep the Debate Honest

Since the big topic of discussion is whether UNL is up to snuff academically and all sorts of claims will be made about the quality of that institution, I've added the Common Data Set for Nebraska to the list of Big Ten Common Data Sets to the  right. This should help in fact checking the various claims and counter claims about Nebraska's academics.

Speaking of academically up to snuff, Adam has a good piece today on this subject over at StateCollege.com. As usual, he gets some great quotes. My synopsis of what people told Adam: Of course, Nebraska is academically weak, but so was Penn State when we joined the Big Ten and look at us now; It's perfectly understandable that us loose lipped faculty weren't consulted, because these things are too important to trust us with; Yeah, it would have been nice to have an academic powerhouse like Virginia...c'est  la vie. You want to add more teams to the league? Ain't goin'a happen on my watch.

I might have more on the particulars found in Adam's piece latter. Or I may not. It depends on how the weekend plays out.

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The Big Ten Expansion: Athletic Tail Wags Academic Dog

The Penn State Propaganda Portal announces this morning that
The University of Nebraska-Lincoln (UNL) has accepted a unanimous invitation from the Committee on Institutional Cooperation, the academic arm of the Big Ten, to join the consortium effective July 1, 2011, the same day the university will become a member of the Big Ten Conference.

Following the Big Ten Council of Presidents/Chancellors approval of UNL’s application to join the athletic conference, the matter of CIC membership was referred to the CIC provosts for action. The provosts, who govern the CIC as a "board of the whole," voted unanimously on June 16 to invite UNL to join the consortium.
I await the day that the CIC  adds a university and the Big Ten follows up with a quick  invitation to the new school. Yeah, like that'll ever happen.

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Wednesday, June 16, 2010

Keeping Track of the Comings and Goings in Centre County

Via Kevin Drum, Forbes has an interactive map which shows the migration pattern for each of the country's counties. Below is a screen capture of the pattern  for  Centre County, PA.



The red lines indicate a net migration out of Centre County while the black lines indicate a net migration into the county. The interactive version of the map is here. Mousing over another county in the interactive map gives details of the migration to and from Centre County, PA.

I have nothing deep to say. Go play. It's fun.

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Refining the Pitch on Ag Extension Job Cuts

Last week I wrote about Old Main's strategy of placing blame for the cuts in Ag Extension jobs at Rendell's feet, although Rendell had given Old Main  the flexibility to shift money around in the budget which could have been used to prevent these cuts.

On Monday, Adam at StateCollege.com devoted his column to this  topic. He got the following pushback from Penn State Bullshit Artist Lisa Power.
This all begged the question: Can't Penn State just move some state money around to prevent the job cuts in agricultural research and Cooperative Extension, at least this year?

I asked Lisa Powers, the university's chief spokeswoman.

Simple answer: No, it won't happen, she said.

Powers explained it this way:

Overall state funding for Penn State isn't climbing. So if the university were to move some extra state dollars into agricultural research and Cooperative Extension, it would have to take those dollars away from general-education uses -- that is, undergraduate education.

And that, Powers said, would force an even heavier tuition expense onto students' shoulders. Penn Staters already pay among the highest -- if not the highest -- tuition rates among public universities in the U.S.

Powers said the situation presents "a direct trade-off."

"It's a decision that we decided a long time ago that we're not going to make," she said. Plowing more state money into agricultural research and Cooperative Extension, and taking it away from undergraduates, would be "like having students pay a tuition increase to pay for mushroom research in Chester County.

"Our greater obligation is to the students," Powers said.

Beyond that, she explained, "it's been a longstanding, obvious agreement that we rely on state, federal and county-partnership resources" to finance agricultural research and Cooperative Extension in Pennsylvania.
Lisa has effectively said, "Our spin about it being the governor's fault is bullshit. We are the ones who have decided not to save those jobs."  Good, for Lisa.

She also said the the choice for Old Main is between undergraduate education and extension. This is a false choice. There aren't just two categories in the internal Penn State budget: Ag Extension and Undergraduate Education. There are other areas in the budget where money might be taken for Ag Extension. My guess is that Old Main presents this false dichotomy because it knows that the constituency for Undergraduate Education is much larger than the Ag Extension constituency.  The framing of this as a choice between undergrads and farmers allows Old Main to appear to stand up for one large constituency while pissing off a much smaller constituency. Bad for Lisa.

But there is something even more disingenuous about this loud proclamation,"Plowing more state money into agricultural research and Cooperative Extension, and taking it away from undergraduates, would be "like having students pay a tuition increase to pay for mushroom research in Chester County."  It's not as if Old Main would shift money from the General Funds Budget, which is made up primarily of tuition money and state appropriations, to anything other than Undergraduate Education. Yeah, right.

For example, Old Main has been using General Funds money to support Outreach. This is from the Penn State Strategic Plan for the next five years. (PDF page 57).
Penn State, as the Commonwealth’s land-grant university, has long fulfilled a role as the major provider of outreach services to the people of Pennsylvania. This  long-standing commitment has continued despite decades of falling state support  as a share of the University’s General Funds budget. As state and federal funding  for Cooperative Extension has largely stagnated over the past decade and more, reductions in programming have had to occur in order to cover the increased costs of faculty and staff compensation including fringe benefits. Increasing  contributions from county governments have not been able to offset these declines. University funds have also had to cover more of the increasing overhead costs.

Similarly, the wide range of other University-sponsored outreach programs have grown over the past decades to the point at which, overall, Penn State operates the  largest unified outreach program in the nation, reaching one out of every two  households in the Commonwealth. This has meant growing costs for faculty and  staff salaries and benefits of those employed in Outreach, and for growing costs of  University overhead on operations, despite the considerable successes that  Outreach has had in securing extramural funding for many of its programs.

Given the increasing costs of tuition and living expenses for Penn State students and the associated difficulties of funding their education, along with the declining  share of state funding for outreach programming, the University can no longer rely  on student tuition to support the internally funded Outreach programs to the extent  it has previously. Accordingly, all other Outreach programs centrally supported by  E&G funds will be placed on the same financial model as Cooperative Extension,  with the University’s contribution to programming capped at the 2009-10 level  going forward from that date. That is, increased Outreach salaries and fringe  benefits must come from extramural sources, or be taken from the base funding the University will continue to provide, until such time as public funding for the University increases beyond inflationary levels in higher education.

Now the new strategic plan calls for Old Main to cap the amount of tuition dollars going to Outreach , but still Old Main has been using and will continue to use tuition dollars to support Outreach.

So Lisa is bullshiting  people when she ask them  to believe that  Old Main would never divert undergrad tuition dollars away from undergrad education. It has been doing exactly that and it will continue to do exactly that.  Worse for Lisa.

Why does Old Main think it can get away with this bullshit? It might be because the information needed to get at the truth,when it is available at all,  is  fragmented and I'm the only one paying close enough attention to piece things together.


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Tuesday, June 15, 2010

On the Big Ten Expansion and a Toothless Faculty Senate

I'm sure by now you know that the Big Ten is expanding and Nebraska is the new kid on the block. All of the schools involved insist that the expansion isn't just about big sports money. No, they say academics were considered too when Nebraska was extended the offer to join. Michael Sanseriono at the Pittsburgh Post-Gazette takes closer look at the claim that academics was part of the decision. He cites a couple of academic rankings which puts Nebraska at the bottom of the Big Ten, but that isn't really what caught my eye, you really have to take rankings with a grain of salt. The more damning thing is that there was no evidence of a consultation with the academic side when the decision was made.

I found this quote from the current chairwoman of the Penn State  University Faculty Senate particular informative, not only with respect to the decision making process in the expansion of the Big Ten, but also in the way decisions are made at Penn State in general.
Jean Landa Pytel, chairwoman of Penn State's University Faculty Senate, said the school's faculty has not been consulted about conference expansion.
"This is an athletic issue," Dr. Pytel said. "We're the academic arm. That is purely a business decision. ... We haven't been involved in the conversation, so I guess I have to have faith in the president that he knows what he's doing."

Let's see. Shortly after Graham arrived he merged Hershey Medical Centre with Gessinger Health Care. That merger had to be dissolved in about a year. At the same time, he merged with Dickinson School of Law and praised the strength of DSL. Five years latter he decided that the DSL was in terrible shape and he had to abrogate the merger agreement and move the law school from Carlisle to University Park to fix the problem. A big fight ensued. Then there is the Village at Penn State. A retirement community that Graham decided to build. It recently defaulted on it bonds.

Faith is an amazing thing isn't it? But who exactly is it that provides a check on Graham?

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Friday, June 11, 2010

Penn State Right-To-Know Report 2010:Revised

Old Main posted its revised Right-To-Know Report this morning. The two family members whose compensation had been left of of the original report are Sandra Spanier, Professor of English and Graham's wife, Michele Kirsch, Director of Operations for the Schreyer Honors Colleges and wife of Senior VP of Development Rod Kirsch.

Sandra Spanier's salary  the 2008 tax  year was $126,813 which placed her in the middle of the pack of full professors in the College of Liberal Arts.

Michele Kirsch's salary for the 2008 tax year was $83,171. The Stairs Report does not have the average salary of administrators in the Honors College because there are only three and the in categories with three or less employees no data is given. However,  in the other academic support units the average salaries in the Executive/Administrative/Managerial category range from a low of $79,245 in Outreach to a high of $96,708 in the Libraries. In that context, Kirsch's salary does not appear out of line.

While there's no story here, the question of whether Old Main made a reasonable effort to ascertain if any family member of trustees  should have been reported is still open, but  I doubt that we'll ever get answers to that. So this is likely the end of line on this story for this year.

Also see StateCollege.com and the Pittsburgh Post-Gazette for more on this story.
[Updated: 6/11/10 9:30 pm]

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Revised Penn State Right-To-Know Report 2010: Background Information Part II

I thought that while we are waiting for today's document dump , as I said below, I'd provide some context and background information  to help people analyze whatever Old Main decides to give us. (Part I is here.)

As of Wednesday, we know that Old Main will acknowledge in its revised RTK report that there are two family members of influential people at the Penn State who either received payment from the University in  a business transaction or who are employed by and received compensation from the  University in fiscal year 2007-2008. Is this list of two individuals exhaustive? This question is almost certainly unanswerable with information in the public domain, but here's some context for those who may want to ask questions of those who know the answer.

The number of family members of influential people with business income or compensation listed by Pitt and Temple are six and one, respectively.  These numbers are in line with Old Main's claim of only two family members. No red flags here.

Did Old Main make an honest effort to determine all family members of influential individuals with business income or compensation? The IRS only require an annual survey to determine if such relationships exist. From the instructions for Schedule L, page 4.
The organization is not required to provide information about a business transaction with an interested person if it is unable to secure the information regarding interested person status after making a reasonable effort to obtain it. An example of a reasonable effort for Part IV is for the organization to distribute a questionnaire annually to each current or former officer, director,trustee, and key employee listed on Form 990, Part VII, Section A, that includes the name, title, date, and signature of each person reporting information and contains the pertinent instructions and definitions for Schedule L, Part IV. The organization is not required to distribute such a questionnaire to organizations or individuals with which it does business, but who are not current or former officers, directors, trustees, or key employees of the organization, in order to have made a reasonable effort or this purpose.
It would be worth asking about the reasonable efforts Old Main made in  its attempt to fill-out Schedule L, Part IV.

If the answer is that they used a questionnaire as described above, then the follow-up should be may we see a blank copy of it.

If the answer is  that as part of their conflict-of-interest policy the Board of Trustees must report the business transactions of family members, then you should be aware that the Bylaws  of the Board of Trustees has a narrower definition of family member than does the IRS and the reporting thresholds for business relations are different and no provision is made for reporting relatives employed by the University.  You can find the IRS guidelines in the instructions for schedule L and the appendix of the  instructions for the Form 990. The Bylaws are here. The relevant part is Article 6. So if this is their answer, it is an admission of their failure to make the reasonable effort demanded by the IRS.

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Thursday, June 10, 2010

Revised Penn State Right-To-Know Report 2010: Background Information Part I

I thought that while we are waiting for Friday's document dump I'd provide some context and background information to help people analyze whatever Old Main decides to give us.

As of yesterday, we know that Penn State will acknowledge in its revised RTK report that there are two family members of influential people at the Penn State who either received payment from the University for a business transaction or who are employed by and received compensation from the  University in fiscal year 2007-2008.Graham's wife Sandra, an English prof, as I've already reported, will certainly be one of these individuals. Whatever amount she is payed, the question will arise, is it too much or too little? Here's your context for answering that question.

According to the 2009 Stairs Reports,  during the 2007-2008 fiscal year  there were 155 full professors in the College of Liberal Arts and the average salary of the full professors was $124,316. Unfortunately, the Stairs reports don't give anymore information on the salary distribution. Hence, it will difficult based on this to determine if Sandra's salary is extremely small or large unless it is way out of line. Fortunately for us, each year the University Faculty Senate issues a report on faculty salaries which does contain some additional information on  salary distributions.  Here's data for the full professors in the College of Liberal Arts for the Fall of 2008.(PDF page 16)
  • Number=158
  • First Quartile=101,373
  • Median=121,860
  • Third Quartile=150,120
  • Average years in rank=9.8
There's about a $50k spread in the middle of the distribution. If Sandra's  salary is substantial more than $50k above  the third quartile or below the first quartile  that would be a pretty good indication of an extreme salary and a reason to start looking for answers from Old Main.

There is a complication because these numbers are  college-wide.  The distribution  within the English department will be different. But this should only matter if her salary is on the boarder between extreme or not.

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Wednesday, June 09, 2010

Placing the Blame

On Monday, The Penn State Propaganda Portal announced that
Ten people are losing their jobs and dozens of additional positions are being eliminated through attrition as a result of budget shortfalls in Penn State's College of Agricultural Sciences caused by state appropriations that have not kept pace with rising costs.

[...]

In the current fiscal year, the college's state appropriation for agricultural research and extension was flat at 2008-2009 levels.

The governor's proposed budget for 2010-2011 again includes flat funding for the college. However, college administrators say without greater state support, rising operating and pension-related costs will create a budget shortfall of $11 million as of July 1, 2011, requiring a 20 percent reduction in agricultural research and extension programs in the 2011-2012 fiscal year. This would equate to more than 160 positions in the college.

"Unlike Penn State's undergraduate education programs, these programs do not receive tuition dollars," McPheron said
The take-away is that that the workforce reduction is caused by flat appropriations for the college which are expected to remain so this year and that the shortfall caused by rising costs cannot be made up for by hiking tuition.  Hence it is the governor's fault that these people are losing their jobs.

Historically, it has been true that the Commonwealth's budget for the University has line item appropriations and that the appropriations for for agricultural research and extension line item has been flat recently. But this year, the governor has eliminate line items from the proposed appropriations for Penn State (Proposed Budget PDF page 521) in order to give Old Main more flexibility to deal with its flat funding.  Therefore it is not true that, "The governor's proposed budget for 2010-2011 again includes flat funding for the college;" it simply  includes flat funding for the University as a whole.

This means is that Old Main could have shifted money into the College of Agriculture budget  from elsewhere in the budget to support agricultural research and extension, but has chosen not to do it. This may or may not have been a smart thing to do, but this year it was Old Main's call not Rendell's.

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Tuesday, June 08, 2010

Old Main to Come Clean: Penn State Right-To-Know Report 2010 Will Be Revised.

Via the invaluable Adam Smeltz at StateCollege.com
Penn State on Friday will file an amended and expanded version of its annual Right-to-Know report, spokesman Geoff Rushton said Tuesday.
Rushton said the amended report, to be filed in Harrisburg, will disclose the salaries of two university workers who are family members of key leaders at the institution. The report also will be posted on the Penn State website, he said.
...more once the report is available.
[Update: 06/08/10, 10:50pm. Bill Schackner at the Post-Gazette also has the story.]

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Monday, June 07, 2010

The Outside Legal Counsel That Aided the Trustees in Determining Graham's Compensation is....

Like I said below, Adam Smeltz's StateCollege.com piece on Graham's contract extension is full of nice little tidbits. For example, the Trustees used
...the services of outside legal counsel, [Penn State Bullshit Artist Lisa]Powers said, to help them gauge fair-market value and demand as they set presidential compensation.
The truth is I don't know who the outside legal counsel is. But shortly after I put up the post, Who Decided to Give Graham More Time?,  the blog had a visit from the Cleveland office of the law firm Baker and Hostetler. Here's a screen capture.
It just so happens that one of Baker and Hostetler's areas of practice is executive compensation.


That doesn't mean that Baker and Hostetler is the outside legal counsel used by the Trustees. Heck, someone  over in the Cleveland office may have been trying to check up on the competition. But if they were the outfit  used by the BOT that would go along way in explaining the Trustees' decision.

You see, some of the lawyers over a Baker and Hostetler might have trouble spotting a con artist.
CLEVELAND, Ohio -- Most people don't fall for the African inheritance scam where a huge sum of money sits in a foreign bank account waiting to be claimed -- but at a price.
But some do.
Nine people, including several from the Cleveland area, sued a Solon woman and two lawyers this week claiming they duped the plaintiffs into helping the woman recover $14.5 million left behind in the African nation of Burkina Faso.
The lawsuit, filed in Cuyahoga County Common Pleas Court, claims Willia Burton and two attorneys from Baker Hostetler in Cleveland persuaded the plaintiffs to give her more than $1 million. The money was for legal fees and other payments necessary to recover the inheritance left to Burton by her father. Each contributor was promised "a huge return," the lawsuit states.
It's been five years and none of the nine has seen a dime.
Food for thought, anyway.

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Sunday, June 06, 2010

Spanier Has 'Overwhelming Support' For Contract Extension, Aide Says; Or Does He?

Is the BOT "overwhelmingly"  behind Graham as Penn State Bullshit Artist Lisa Powers insisted to Adam Smeltz yesterday? Maybe. Maybe not. Here's why it's unknowable. 

According to the BOT Standing Order IX (1)(f)(5),
Expectations of Membership. In exercising the responsibilities of trusteeship, the Board of Trustees is guided by the expectations of membership, each of which is equally important:...Speak openly within the Board and publicly support decisions reached by the Board.
I believe in legal circles that's called the toe-the-line rule. Since the BOT Standing Order VII(13)(a) allows the Board to meet in secret when considering employment matters, those "within the Board" discussions about Graham will never be heard outside the Board. Any dissent  "within the Board" gets channeled into high blood pressure.

So the next time you're talking to a Trustee and they start telling you what a super guy Graham is and how they never tire of him pulling a nickle out of their ear and how lucky the University is to have his services and what a great racquetball player he is and on and on and on, shake your head knowingly and smile, because you know Penn State  puts the bot in BOT.

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Who Decided to Give Graham More Time?

In my rush to snark the other day, I failed to note some interesting tidbits in Adam Smeltz's  StateCollege.com story on Graham's lifetime presidential appointment. Here's one: Who exactly is charged with deciding  Graham's future?
[Penn State Bullshit Artist Lisa] Powers said a small committee of trustees considers presidential contract extensions in consultation with other board members. The committee includes the board chairman or chairwoman, the vice chair, the immediate past chair and the chair of the board's Committee on Finance and Physical Plant.
Who holds these position at this time?
These are the people to blame.

With the exception of Garban who is an alumni trustee, all of these people are business and industry trustees and Garban, as Senior Vice President of Finance and Operations/Treasurer Emeritus of The Pennsylvania State University, is an Old Main insider. There is no one representing the interests of the working people of the Commonwealth who it is the University is supposed to serve ....and it shows.

And why might Graham sellout the interests of the working class? Well, here's an interesting fact. John P. Surma is CEO/Chairman of Board/President/Director US Steel and Graham is a Director of US Steel. ...and drumroll please...In 2009, the compensation for a  director of US Steel was $171,000.00 and the previous year it was $270,980.00. That didn't show up on this years RTK report. You see it is so much more lucrative to serve the interests of the fat cats than it is to serve the interests of working people. And by show'in Graham a little lov'in, Surma might get a little lov'in back from Graham.

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Saturday, June 05, 2010

BOT & Graham BFF

Adam Smeltz at StateCollege.com reports this morning that the Board of Trustees really, really, really likes Graham.
Penn State President Graham Spanier had "overwhelming support" from the university trustees when they agreed to extend his contract, university spokeswoman Lisa Powers said late Friday.
Also according to Adam, Graham plans on sticking around after he steps down as president.
It's not clear if Spanier wants to conclude his presidency in 2015 or  later. But "my current plan would be to rejoin the faculty and go back to teaching and research when my tenure as president is completed," he  wrote via e-mail.
...no doubt to manage his legacy through the recently created  Graham Legacy Project.

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Friday, June 04, 2010

Graham "Dictator For Life" Spanier

This just in from The Penn State Propaganda Portal.
Penn State's Board of Trustees has agreed with President Graham Spanier on a three-year extension of his existing contract, keeping him at the helm of one of the nation's leading research universities until 2015.
Until now, I haven't suggested that  Old Main was trying to hide something when it intentionally failed to report the business dealings and compensation received by family members of trustees, officers and key employees in its recently released Commonwealth mandated Right-To-Know Report 2010. I've chocked it up to Graham's fundamental hatred of answering to anybody.

With the timing of the announcement of this reappointment, I'm beginning to think that the trustees are standing behind Graham because  he is committed to hiding  their self-dealings. There is no evidence of such self-dealing, but Old Main is withholding the source of any such potential evidence.

Is the board corrupt? Release the data, that by law you are required to release, and let us, the public,  be the judge.

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Wednesday, June 02, 2010

Update:Fraud: Penn State Right-To-Know Report 2010

As I originally reported last Friday, Penn State failed  this year to report the compensation of family members of trustees, officers and key employees in its Commonwealth mandated Right-To-Know Report . And I argued that Old Main's rationale for doing so didn't pass the smell test. The failure was clearly done in bad faith.

Today Adam Smeltz at StateCollege.com reports that Old Main is still studying the matter.
Penn State's legal counsel is reviewing whether the university needs to report more specific information in its annual Right-to-Know report, spokesman Geoff Rushton confirmed Wednesday.
This is a no-brainier. The language in the instructions for IRS Schedule L, a component of the Right-to-Know Report,  is very plain. Old Main's excuse is in direct contradiction with it. Why the delay in correcting this thing?

My guess is that Old Main's plan, now that they've been  caught cheating, is to drag their feet  and hope that it goes away.

Keep the fire to their feet Adam.

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