SUNY kickback controversy prompts changes in presidential pay scheme

Last week, the Albany Times-Union reported that the board of trustees of the State University of New York (SUNY) system unanimously approved a proposal to reform the current compensation structure for the Chancellor, campus presidents, and senior SUNY officials. The reforms, proposed by Chancellor Nancy Zimpher, were presumably prompted by a recent scandal at SUNY Upstate Medical University where several top administrators, including the president and a senior vice president, were being paid by two companies that received millions of dollars in business from the school.

Zimpher’s proposal would require that executive pay come only from state sources and that outside income be vetted for conflicts of interest by New York’s Joint Commission on Public Ethics. Under the current regime, SUNY campus presidents and other high-level administrators are paid a portion of their salary by SUNY, an agency of the State of New York, with top-ups from various private not-for-profits affiliated with SUNY, such as the SUNY Research Foundation or one of the campus-specific foundations.

For example, Satish Tripathi, president of the State University of New York at Buffalo, earns $385,000 per year from SUNY, $115,000 per year from the SUNY Research Foundation, and $150,000 per year from the University at Buffalo Foundation.

In the SUNY Upstate case, David R. Smith was earning $363,537 from SUNY and $268,923 from the SUNY Research Foundation. On top of that, however, he received “a substantial increase” in compensation from Pediatric Service Group, LLP as well as a $349,296 deferred compensation plan through MedBest Medical Management, both contractors with SUNY Upstate who have received a combined $64 million in contracts since 2008. Smith’s second in command in the SUNY Upstate administration, Steven Brady, also took money from Pediatric Service Group and MedBest, as did many of Smith’s top aides according to the Times-Union. Smith and Brady have since left their jobs, Smith resigning and Brady retiring.

The proposal adopted by the SUNY trustees would require campus presidents and other “senior officials of the State University” to submit outside income opportunities such as the pay from MedBest and Pediatric Service Group to scrutiny by the Joint Commission on Public Ethics, New York’s ethics body, to examine conflicts of interest such as Smith’s and Brady’s.

In a big step for transparency, the proposal would also end top-offs for SUNY administrators from the sundry campus foundations, which are not subject to sunshine measures such as the Open Meetings Law or the Freedom of Information Law, despite the fact that they control the endowments of the public schools.

We encountered the issue of opacity at the UB Foundation when investigating that university’s Shale Resources and Society Institute. Document requests to the University at Buffalo revealed that SRSI administrators had gone on fundraising junkets to Houston, the capital of the American drilling industry, prior to issuing a report praising the industry for its environmental record; however, because SRSI’s funding came from the UB Foundation, it was impossible to tell whether the Institute had actually taken industry cash. Shale Resources and Society Institute co-director Robert Jacobi described the UB Foundation as a “slush fund” in a radio interview last year:

“We’re trying to put that money into a slush fund that’s mixing it up,” says Jacobi. “Like a Slurpie, [for instance]. You don’t know what’s ice and what’s taste. It’s all mixed up.”

Chancellor Zimpher’s plan to increase transparency and accountability in the compensation of SUNY officials is a commendable effort, though the trustees’ resolution lacks specifics as to its implementation. The appointment of David Smith’s replacement, Gregory Eastwood, includes a $160,000 per year stipend from the SUNY Research Foundation, though the resolution appointing him seems to indicate that that is temporary. In addition to the measures resulting from the SUNY Upstate scandal, SUNY trustees can further pursue transparency and accountability by supporting the bills in the state legislature that would bring the campus foundations within the scope of New York’s Freedom of Information Law.