Yesterday, I wrote about the plight of retirees at Rancho Santiago Community College District. They were recently enrolled in Medicare after having been promised lifetime healthcare benefits from the college. All other community colleges in California enroll their retirees in Medicare, so this approach is not unusual. In fact, it is preferred. Unfortunately, it is the direct result of a loose gift policy loophole, and hundreds of retirees will now pay the price.
What’s unusual about Rancho Santiago Community College District is the way in which their retiree benefits came about. There appears to be an unusual relationship between RSCCD’s former Chief Financial Officer and the insurance provider. Even after he left the college, the former CFO fought hard to preserve the retiree healthcare plan at RSCCD. As it turns out, the former CFO is on the Board of Directors for the insurance provider – even today.
RSCCD adopted this strategy shortly after the CFO arrived on campus in the late 1990’s. There are no records of the insurance being competitively bid. But there are strong indications – and admissions – from the former Chief Financial Officer that he accepted gifts from Alliance (the insurance provider) and other vendors. His reason for doing so is that there is no policy against it.
I checked the WCC Board Policy manual. While there is a Conflict of Interest policy, it relates largely to employment conflicts and applies only to college employees. There is no specific prohibition against College officers accepting gifts, or other similar personal recognitions. This is the gift loophole
This is a serious loophole in the WCC Board’s Conflict of Interest policy, which doesn’t even apply to the Trustees. It provides a backdoor way for executives to accept gifts designed to influence decision-makers on what could be multi-million-dollar transactions.
The gift loophole cannot remain available for use
This is what happens when the Trustees cede their responsibilities for writing policy to the College administration. Of course, the administration will write policies that operate most favorably to them, with the fewest restrictions on what College employees can and cannot do. Like accepting gifts.
Rewording the Conflict of Interest policy to prohibit the acceptance of gifts is so simple and so obvious. Yet the Board has not reviewed or updated this policy in almost 20 years. I’m not saying that WCC executives have been gifted or influenced in that time; only that – egregiously – the policy allows for this by not specifically prohibiting it. It is possible that college executives have been influenced in their decision-making. By failing to prohibit gifting by vendors, the WCC Board of Trustees has outrageously left open the door to this kind of influencing of executives in charge of spending hundreds of millions of dollars annually.
The Trustees at Rancho Santiago Community College District eventually eliminated their own gift loophole by enacting a strict no-gifts policy. But then again, the RSCCD Trustees did their jobs without the assistance of the RSCCD administration.
If the WCC Board of Trustees simply did their jobs themselves instead of passing their policy responsibilities off to those who stand to benefit from the gift loophole, this would not be a problem. Instead, this lunacy will be allowed to continue, and the pathway to potential corruption will remain wide open for all vendors to use freely.
Photo Credit: Katy , via Flickr
