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As the university struggles through a compensation controversy that mirrors one from 1992, the UC Board of Regents is attempting not only to repair the damage already done, but also institute solutions that will prevent future recurrences in a way they were unable to in the early 1990s.

“In ’92, a set of principles was developed, but they were not operationalized, nor were there any compliance mechanisms established,” said Paul Schwartz, a spokesman for the UC Office of the President.

That year the university faced an embarrassing executive compensation controversy after it was revealed that UC officials spent several million dollars on separate occasions for excessive and lavish purchases. The regents took steps to review and revise compensation policies, but failed to provide compliance oversight for later administrations’ compensation decisions.

During the regents’ meeting in San Francisco last week, UC President Robert Dynes, who has heard calls in recent weeks from newspapers, students and legislators for his removal, admitted that he himself was ignorant of some of the policies established after the last compensation flap.

In accepting blame for many of the current compensation problems, Dynes and the regents have expressed their commitment to address the systemic failures that have allowed policy violations to go unnoticed and unpunished – an assurance absent in 1992.

The current controversy started when a series of newspaper reports beginning last November detailed repeated violations of UC compensation policy which often occurred without the public’s or the regents’ knowledge.

Initial and subsequent reports found that the university had inappropriately distributed hundreds of millions of dollars to high-level executives at all UC campuses over an extended period.

Though the amount of money in question totals less than 1 percent of the UC’s $20 billion annual budget, the controversy has put the regents on the defensive as they try to regain the public’s trust.

“The public should be aware of what’s going on. The secrecy is appalling,” said Ron Roach, a spokesman for the California Taxpayers’ Association, a Sacramento-based watchdog group. “There has been no accountability for a long time.”

But making the regents accessible to the public and accountable for their actions is a give-and-take process because there must be a balance between accessibility and privacy issues.

A bill set to be introduced today in the California Legislature by Assemblyman Leland Yee, D-San Francisco, would prohibit the regents from meeting in closed session when they discuss compensation matters.

This bill comes on the heels of a lawsuit filed by the San Francisco Chronicle earlier this month attempting to require the regents to discuss compensation in open session during their meeting.

The regents have repeatedly opposed these measures on the grounds that they must balance public accessibility with the need to keep individual personnel matters private.

“We believe our long-standing position of discussing and recommending certain personnel matters in closed session before final action is taken by the regents in public appropriately balances these two obligations,” said Regents Chairman Gerald Parsky in a statement.

But this open/closed-session debate was comparatively less important during the regents’ early-1990s efforts to repair the state of the UC’s pay practices.

The UC faced damaging compensation problems in 1992 after then-UC President David Gardner was given a closed-door severance and pension package worth almost $1 million.

A subsequent audit revealed about $2 million spent by UC officials on questionable expenses, including parties and pricey hotel rooms.

In a letter written that year from Gardner to the regents, he defended the spending as necessary to accommodate the university’s “far-flung academic and administrative activities.”

The story broke amid difficult financial times for the university, which was mired in budget cuts, layoffs and rising student fees.

In an attempt to fix the problems and save face, the regents placed limits on travel and entertainment spending for UC officials. The regents instituted specific compensation policies and they gave a cursory commitment to discuss compensation in open session.

But the steps they took lacked an enforcement element, which proved critical.

“They had rules and regulations, but they didn’t follow them. They ignored them,” Roach said. “It was lip service and no action.”

The university does not want this to happen a third time. This time around, the regents have taken a number of actions to ensure compliance.

As a series of internal and external audits revealed the extent of the violations – totalling hundreds of millions of dollars in hundreds of separate violations – the regents assembled a committee on compensation to help repair the university’s pay policies. They began establishing new rules governing how they grant exceptions to compensation policies – a major issue in the current controversy.

The regents are currently reviewing and revising their policies on separation agreements for high-ranking officials.

In last week’s meeting, they granted outgoing UCLA Chancellor Albert Carnesale a salary of $323,600 while he is on sabbatical next year, per their existing policy.

“Because the policy is undergoing a transition, the regents felt it only fair to honor this commitment to Chancellor Carnesale,” the regents said in a supplemental compensation report issued to the media at the meeting.

As far as accountability to the public, the university is benefitting from the ubiquity of the Internet. Dissemination of public information was much less convenient in 1992 and 1993, when the Internet was little more than a fledgling enterprise.

The regents have set up a Web site containing the compensation reports and audits, statements by UC officials, explanations of actions taken, comparisons of UC compensation with other institutions, and a forum for the public give to give feedback on how the regents are handling the matter.

“In terms of gauging the university’s seriousness, I think those actions demonstrate the regents’ and the administration’s seriousness about correcting those problems,” Schwartz said.

Though the university is hopeful that compensation problems will not crop up again, nobody can be completely sure.

As to whether the controversy will disappear after the current actions are put in place, Schwartz said “ultimately time will tell.”

To learn more about the UC’s efforts to correct compensation problems, visit www.universityofcalifornia.edu/news/compensation.