Why We’re Suing the UNM Foundation

By Daniel Libit

According to its official slogan, the University of New Mexico Foundation is, “Where generosity meets excellence.”

Left unstated, however, is that the Foundation is also where generosity meets secrecy.

Actually, that might have once been stated rather explicitly. A 2015 Columbia Journalism Review article reported that the UNM Foundation’s website once advertised the following benefit to donors:

“[g]reater assurance of … confidentiality, since [it] is a separate not-for-profit corporation and not subject to open records laws.”

Curiously, those words no longer appear online, but the ethos of obfuscation continues to abound — for now.

This week, in Bernalillo County Court, I filed the very first open records lawsuit against the Foundation. [You can read the entire civil complaint here.]

At its heart, the lawsuit (which also names UNM’s Board of Regents as a defendant) challenges the Foundation’s argument that it should be exempt from the New Mexico Inspection of Public Records Act because it is a private, non-profit entity. The lawsuit contends that this claim is merely a canard designed to keep actual public records locked away from the actual public.

NMFishbowl.com’s keyhole into the Foundation’s surreptitious imperative began with our efforts last year to learn more about the behind-the-scenes activity and conversations that preceded the signing of the WisePies naming-rights deal. In November, I submitted a public record’s request to UNM seeking certain germane emails from Larry Ryan, the Foundation’s vice president of university development. In response, the school’s public records custodian, John Rodriguez, wrote me this:

“The University does not have the records you seek. I suggest you contact the UNM Foundation directly, which is a separate legal entity, for their consideration…”

I followed through as instructed, and sent a similar request to Jennifer Kemp, the Foundation’s communications director. Kemp, in ultimately rejecting my request, stated that the Foundation is a “501(c)(3) non-profit, non-public entity” and that it “does not share donor or gift information unless the donor has authorized us to do so.” Expanding on that point, she wrote:

“Our relationship with The University of New Mexico is contractual. The UNM Foundation is not a public body, and is therefore not subject to IPRA, although we strive to be as transparent as possible without compromising the privacy of our donors or employees.”

The WisePies naming-rights deal, though termed a “gift agreement,” is for all practical purposes a business transaction: the exchange of publicity for cash. The bestower of that publicity is the owner of the arena: the University of New Mexico, a public institution. And yet, the contract was ratified behind the dubiously distinct walls of the UNM Foundation.

This, dear taxpayers, is how UNM plays hide the ball with the public’s right to know: the Foundation serves as the university’s public accountability force field, allowing UNM to off-shore core aspects of its operations to a business black-site that claims to operate by a different set of standards.

It wasn’t always this way.

Upon his arrival a decade ago, former UNM President David Schmidly helped transform the Foundation from a friendly, in-house operation into the mega-overhead, “free-standing” UNM Foundation Inc., which currently holds $200 million (and dwindling) in University-related assets. In 2011, confronted with public pressure, the Foundation began publishing some of its financial information on its website. Still, by insisting on its separateness, it continues to keep much in the dark.

And on what grounds does the Foundation establish that it’s separate? Axiomatically, pretty much, considering that the Foundation: receives funding from the University; reports to the University; is the investment advisor of the University’s endowment; shares the University’s trademarks; maintains University records; is audited by the University; and is exclusively controlled by the University.

Ipso facto, the UNM Foundation and the University of New Mexico are one and the same.

As the complaint highlights, one need to look no further than the Athletic Department’s website to see this distinction without a difference.

In late December, Krebs told the Albuquerque Journal that he was personally planning to pick up a $300,000 naming-rights payment from WisePies. Prior to that, there was much community speculation as to whether WisePies would make good on the money before the end-of-the-year deadline. NMFishbowl.com sought documentary proof the company actually did.

So, on Jan. 12, I sent a request to UNM’s public records custodian requesting, “(A) copy of the check(s), as well as any banking documentation — that relate to WisePies’ Pizza and Salad’s final naming rights payment of 2016.” As part of my request, I made note of Krebs’ public assertion that he — a UNM employee — would be the physical recipient of the payment, or at least its highly paid courier.

Once more, UNM kicked me over to the UNM Foundation, which again informed me that they are a “non-profit, non-public entity” that tries “to be as transparent as possible,” insofar as they don’t actually have to. See how the scheme works?

This is why New Mexico public records law shouldn’t be left to the discretion of the UNM Foundation. And this is why university foundations across the country are slowly but surely being compelled, through the courts and state houses, to give up the ghost on these transparency end runs.

In 2011, California Gov. Jerry Brown signed into law a bill that required foundations and auxiliary organizations to respond to public records requests under the same guidelines as the state’s public universities.

In 2015, the Chicago Tribune successfully sued the foundation affiliated with the College of DuPage over the release of financial-related documents.

In December, the University of Louisville Foundation agreed to hand over documents and pay the plaintiff’s legal fees, as part of settling a public records lawsuit filed by the Kentucky Center for Investigative Reporting.

Last month, a George Mason University student group filed suit against the school’s foundation in an effort to obtain donor records for the billionaire industrialist Charles Koch. That case is still pending.

Besides a clear public entitlement, there’s a strong public interest to lifting the veil.

The College of DuPage proved an object lesson in what can easily happen when public officials are permitted to operate in an accountability-free zone. As the Tribune’s reporting eventually revealed, a former university president had received a secret $763,000 severance payment, while other school officials lavished themselves in foundation cash.

Prior to settling its public records lawsuit, the University of Louisville Foundation had been condemned by the state’s auditor for essentially going rogue from its stated missions to support the school. Earlier this year, the foundation affiliated with the University of Wisconsin-Oshkosh was hit with a lawsuit for the mishandling of funds. That foundation is now teetering on the edge of bankruptcy.

Though not always the case, there seems to be a strong correlation between murkiness and malfeasance.

The significance of our spearheading lawsuit in New Mexico, then, extends far beyond the specific matter of WisePies Arena, or even UNM Athletics. At stake is the precedent for greater insight into the ways the state’s largest institution of higher education conducts much of its business.

I am delighted to be represented in this action by Freedman Boyd Hollander Goldberg Urias & Ward, P.A, an Albuquerque law firm with a national reputation for its First Amendment work. We believe we have the Constitution and the relevant state statutes on our side, and are prepared to wage whatever fight is necessary to bring the University in actual compliance with the laws of the land.

After all, if the UNM Foundation truly stands at the intersection of “generosity” and “excellence”,  it should have nothing to hide.


(Featured photo image by Ken Lund/Flickr)