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• April 4, 2012

• San Francisco Chronicle; Nanette Asimov; April 4, 2012

By Nanette Asimov
Chronicle Staff Writer

A state senator who is pushing a bill to require more public disclosure of waste and fraud at tax-funded agencies has called on California State University to stop retaliating against employees who report such abuses.

State Sen. Leland Yee, D-San Francisco, responded to a San Francisco Chronicle article published Sunday that revealed CSU has spent nearly $9 million in the last three years to settle and defend seven lawsuits brought by employees who said they were retaliated against for reporting abuse under the state's Whistleblower Protection Act.

The article told the story of Justin Schwartz, a recreation instructor at Cal State East Bay who lost his job in 2009, months after accusing a colleague of spending thousands of dollars of university money to buy himself high-end sports equipment and paragliding lessons. A campus investigation confirmed several allegations. But the campus fired Schwartz and retained the accused instructor.

Training urged

"It is past due for the chancellor (Charles Reed) to mandate all his executives receive training in California's whistle-blower protection laws," Yee said in a statement.

Reed's spokesman, Mike Uhlenkamp, said executives are not required to take such training but can participate voluntarily. He said CSU has no plan to change.

Yee is "more than welcome to express his opinion," Uhlenkamp said.

Next week, a Senate committee will consider Yee's bill, SB1336, which would require CSU and other agencies to release the findings of all whistle-blower investigations, substantiated or not.

"Oftentimes, complaints are settled and everything is sealed up," Yee said. "What I'm trying to do is bring some sunlight onto the problems."

Details of whistle-blower complaints and investigations are now made public only if they become a lawsuit - usually if the whistle-blower sues over retaliation.

Under the bill, agencies would make public all such investigations while protecting the identity of the whistle-blower and witnesses. Subjects' names would also be confidential unless the allegations are substantiated and disciplinary proceedings permit disclosure by law.

Currently, there exists a Byzantine reporting system in which reports can seem to plunge into a black hole or are never forwarded, and those who blew the whistle often wonder what happened.

One agency that would have to disclose all findings under the Yee bill is the Bureau of State Audits, the agency Schwartz turned to after he was let go from Cal State East Bay. He filed a report about his colleague's practices in 2010, got a case number, and never heard from them again.

The audit bureau reports many, but not all, findings on its website, said Steven Russo, chief of investigations.

Case still active

"We tell folks, we're not going to tell you" what happened, he said. Schwartz's case, now two years old, "has not fallen through the cracks," Russo insisted.

At CSU there are myriad websites, memoranda, executive orders and regulations about addressing fraud. In one, CSU says campuses have to "notify the chancellor within 24 hours of all cases of actual or suspected theft, defalcation, or fraud." The chancellor's office is also required to notify three state agencies if fraud is suspected.

That didn't happen in Schwartz's case. And Uhlenkamp of CSU said the chancellor's office is not always told about whistle-blower complaints. His office has investigated nine in the last five years. None were substantiated, he said.

Meanwhile, Stephen Henry, the attorney representing Schwartz in his retaliation suit against CSU, said he likes Yee's bill because "anything that's going to increase the visibility of these complaints is a good thing."

He's had trouble getting details from CSU about its investigations, and has asked the court to intervene. A hearing over whether to compel CSU to disclose the information is set for later this month.