Governance Challenges for Illinois Public University Trustees

1. Illinois Public University Trustees October 27, 2016 ConferenceIllinois Board of Higher Education Illinois Fiduciary Principles and Why They Matter for Consequential Boards

3. Illinois trustees are required to govern in a complex and increasingly risky environment Stakes are high…. Rewards are few

4. All Public Institutions of Higher Education are “state agencies.” • Boards of Trustees need to operate within the restrictions state laws impose, including, without limitation: 1) Freedom of Information Act (“FOIA”) 2) Open Meetings Act (“OMA”) 3) State Officials and Employees’ Ethics Act (“Ethics Act”)

6. Freedom of Information Act • Section 2(c) of FOIA (5 ILCS 140/2(c)) provides that “public records” are: “[a]ll records *** and all other documentary materials pertaining to the transaction of public business, regardless of physical form or characteristics, having been prepared by or for, or having been or being used by, received by, in the possession of, or under the control of any public body.” • The presumption is that all public documents are open to inspection as noted in Section 1.2 of FOIA (5 ILCS 140/1.2): “[a]ll records in the custody or possession of a public body are presumed to be open to inspection or copying. Any public body that asserts that a record is exempt from disclosure has the burden of proving by clear and convincing evidence that it is exempt.”

7. Freedom of Information ActPersonal E-mails & Personal Devices • E-mails received and sent from your personal e-mail addresses, and texts received and sent from your personal devices, are subject to disclosure under FOIA (even if deleted). • University case. Chancellor was forced to resign over encouraging key personnel to utilize personal e-mail addresses in an attempt to maintain confidentiality on certain University related topics. • Chicago Tribune/Emanuel cases. The Emanuel administration was forced to turn over e-mail chains relating to the multimillion-dollar no-bid CPS contract even though many of the e-mails contained personal information. • City of Champaign case. City of Champaign council members’ communications from personally owned electronic devices made during city council meetings were subject to disclosure under FOIA. The appellate court stated that “to qualify as a ‘public record’ under FOIA, a communication must (1) pertain to the transaction of public business and have either been: (2) prepared by, (3) prepared for, (4) used by (5) received by, (6) possessed by, or (7) controlled by a public body.”

8. Freedom of Information Act:Laquan McDonald Example • On January 28, 2016, CNN submitted a FOIA request to the Chicago Police Dept. seeking “all e-mails related to Laquan McDonald from Police Department e-mail accounts and personal e-mail accounts where business was discussed.” • Chicago Police Dept. only searched for e-mails on the officers’ city-issued e-mail address and failed to search officers’ personal e-mail accounts and personal devices because they asserted that personal e-mails exchanged between individual officers are not communications “prepared by or for” a public body and they were not “used by”, “received by” or “in the possession/control of” a public body (as required by the City of Champaign case). • The AG disagreed and held that excluding communications pertaining to the transaction of public business which were sent or received on personal e-mail accounts of public officials and employees would be contrary to the policy of FOIA.

9. Freedom of Information Act:Governor Rauner’s Policy on Personal E-mail Addresses “Please advise your board members and commissioners that we still have a zero-tolerance policy on the use of personal e-mail for state business.” – Christina M. McClernon, Assistant General Counsel, Office of Governor Bruce Rauner

11. Open Meetings Act • The Open Meetings Act is designed to prohibit secret deliberations and action on matters which, due to their potential impact on the public, properly should be discussed in a public forum. People ex rel. Difanis v. Barr, 83 Ill. 2d 191, 202 (1980). • What is a “meeting” under the Open Meetings Act? • “Meeting” is defined as “any gathering of a majority of a quorum of the members of a public body held for the purpose of discussing public business.” 5 ILCS 120/1.02. • If sending an e-mail or text message to more than 2 Trustees, you may be in violation of the Open Meetings Act. • Open Meetings Act explicitly applies to electronic communications such as e-mail, instant messaging and text messages. * * Best Practice Note (to include on electronic communications): This message has been sent to all Board Members via BCC in an effort to eliminate the risk of hitting “reply all” and violating the Open Meetings Act.

12. Open Meetings Act:Community College Example • At a 2015 special meeting, the Board discussed the financial condition of the College in executive session under 2(c)(1) and 2(c)(5) of the OMA, allowing public agencies to go into executive session to discuss personnel matters and the lease or purchase of real property. • The topics in executive session included: • Financial Uncertainties of the College; • Financial Stewardship; • Financial 5 Year Forecast; • Property Tax Levies; and • Impacts of Limited Financial Resources. • AG concluded that Board’s brief discussion on general matters related to employees in general (such as staffing levels and the importance of having a financial context for upcoming negotiations with employees) and the College’s efforts to sell or lease property owned by the College did not authorize the Board to enter into executive session pursuant to 2(c)(1) and 2(c)(5) of the OMA.

13. Open Meetings Act:Recent Revisions On June 30, 2016, the Open Meetings Act was amended to require that any and all available verbatim recordings and executive session minutes of meetings closed to the public be made available to elected or appointed officials who are filling the vacancy of an elected official in a public body.* *Not clear how broadly this will be interpreted.

15. College of DuPage • “It all started in a 5,000-watt radio station in Fresno, California…” • The $762,868 severance payment… • Food, alcohol , inflated enrollment figures, and no-bid contracts… • State and Federal investigations…

17. College of DuPage Consequences • 2-year probation by accrediting agency • President, 3 Trustees ousted • Treasurer, Comptroller fired • Restitution to State of Illinois • FOIA violations • OMA violations • Lawsuits • State Audit • Negative Publicity

18. Over 30 bills introduced by General Assembly to address College of DuPage “difficulties”… • At least 6 bills enacted to date: • FOIA amended to require severance agreements be subject to disclosure. • OMA amended to allow access to verbatim recordings from closed sessions. • Public Community College Act amended to limit employment contract duration and severance provisions (so-called “Breuder bill”).

19. University of Illinois Act, Eastern Illinois University Law, Chicago State University Law, Southern Illinois University Management Act all amended to limit contract and severance provisions, to require additional public notice, and to require open meetings for approval of contract renewals and amendments. • Article 15 of the Pension Code amended to clarify that additional compensation, including bonuses, housing and vehicle allowances, social club dues and athletic club dues are not compensation for pension purposes. • IBHE Act amended to require trustee training. • New Senate Subcommittee: Public Higher Education Executive Compensation -

21. Ethics Act: Political Activity • Ethics Act strictly prohibits employees and Board Members from using State resources for prohibited political activity. 5 ILCS 430/5-15(a). • Ethics Act does not permit any exception for anyone to engage in de minimis use of University property for political campaign activities even if the employee: • Is a tenured faculty or professor of a State University; • Did not think about what they were doing (or not doing); • Describes their conduct as an error that was “miniscule”; • Used State resources that only represented a fraction of their overall e-mail use; or • Did not think about using their personal e-mail as opposed to their State e-mail.

22. Ethics Act: Political ActivityUniversity Example • Tenured University professors exchanged seemingly innocuous, limited e-mails using both their State University email accounts and their personal e-mail accounts to communicate about a fellow Professor’s campaign for Congress. E-mails included: • A request and response regarding drafting an introductory speech for the Professor in preparation for a campaign meeting; • A list of contact information in order to assist the Professor in sending invitations for a campaign meet and greet; • A request and response regarding distributing the Professor’s campaign materials at a meeting in Washington D.C.; and • A request and response regarding assistance in soliciting campaign donations from other University employees.

23. Ethics Act: Political ActivityConsequences from Violations • All of the University professors were required to complete the annual training on the State Ethics Act. • The University professors admitted that they knew that “you’re not supposed to” use State e-mail in regards to a political matter but argued that the violation was a “miniscule error” and that they “could not believe time was being wasted on something so trivial”. • OEIG responded by finding all of the University professors involved in the e-mail exchanges were in violation of the State Ethics Act. • “[a] violation of State law is not a trivial matter. In addition, what is also similarly not trivial, is that a tenured professor, who said she completed ethics training each fall and said she was familiar with the training related to prohibited political activity, nevertheless either intentionally disregarded or simply ignored her annual training.”