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CSU Ethics Issue Halts Investment Efforts by Trustee

February 04, 1988|DAVID HALDANE | Times Staff Writer

A California State University trustee approached officials at two CSU campuses last year about investing in potentially profitable faculty research projects, but dropped the idea after the chancellor's office raised questions about possible conflicts of interest.

Theodore A. Bruinsma--a former president of the Los Angeles Chamber of Commerce who has been a trustee since 1986--met with faculty members at San Diego State University in December and had scheduled a similar meeting at Cal Poly San Luis Obispo for Feb. 8 to solicit business for University Technology Transfer Inc., a firm he heads.

Based in Los Angeles, the firm provides seed capital and management assistance to high-tech university projects with the prospect of earning a profit on its investment.

Contacted by telephone, Bruinsma--who ran unsuccessfully for the GOP nomination for U. S. Senate in 1982--confirmed making the overtures but denied any wrongdoing. He said he abandoned the solicitation efforts after being told by Dale Ride, chairman of the CSU Board of Trustees, that questions had been raised regarding the propriety of Bruinsma's efforts.

"As far as I'm concerned it's over and done with," Bruinsma said. "I have made no contracts and plan to make none."

Ride said in a telephone interview this week that he urged Bruinsma to drop the effort. "I'm satisfied that the matter is completely taken care of," Ride said. "It was just a question of perception and we've cleared that up."

In a Jan. 25 letter to Mayer Chapman, a CSU vice chancellor and the university's general counsel, Bruinsma said he had decided to abandon the efforts to appease "the nervousness of a segment of the faculty" even though Bruinsma said he was advised by his attorney "that my activities have been legal and proper."

However, a memo written by a CSU associate general counsel to Chapman, which was made available to The Times, states that the trustee's actions on the San Diego campus could have led to "the appearance of impropriety" and may have violated a section of the Government Code of Ethics that prohibits legislators or appointed state officers from engaging in potentially profitable business relationships that conflict with their duties. Violation of the section is a misdemeanor punishable by up to six months in prison or a fine of up to $1,000. Cal State trustees are appointed by the governor.

The memo detailed a conversation between Bruce M. Richardson, a CSU associate general counsel, and Sally Roush, a personnel officer at San Diego State University. The conversation followed overtures by Bruinsma to discuss the possibility of University Technology Transfer investing in selected projects through the SDSU Foundation, the campus' main fund-raising arm.

According to the memo, dated Oct. 14, Richardson ended the conversation by advising against the arrangement because of its potential illegality.

"It is possible . . . that Mr. Bruinsma as a member of the Board of Trustees would be called upon to vote upon a policy affecting auxiliary organizations which could impact upon his business dealings with the SDSU Foundation," Richardson wrote. "Because of the possibility of a legal problem . . . and the policy of the law to avoid even the appearance of impropriety, I advised it would be well to apprise Mr. Bruinsma that the foundation would respectfully decline the proposed business relationship."

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Neither Richardson nor Roush could be reached. CSU general counsel Chapman and a spokesman for the chancellor's office, Jeff Stetson, declined comment.

Harry Albers, general manager of the SDSU Foundation, confirmed that preliminary discussions had taken place regarding the proposed investment, but said they were entirely proper. "All we have had are very preliminary discussions and to draw anything from that is absolutely ridiculous," Albers said. "Nothing improper has been done and nothing improper has been considered and to imply that anything has is insulting to all concerned."

According to a Dec. 31 memo from associate counsel Richardson to Chapman, the foundation decided to allow Bruinsma to proceed after determining that the "ethical problems and appearance of impropriety" outlined in the earlier memo were Bruinsma's and not theirs. "Accordingly, the foundation permitted Trustee Bruinsma to pursue his plan," Richardson wrote. "Ms. Roush informed me that he has met with five faculty within the last month concerning research projects with commercial potential. Following those meetings he discarded three of the five proposals and is considering funding the other two."

Apparently, a similar process was being pursued until recently at Cal Poly San Luis Obispo. In an Oct. 22 letter to university President Warren J. Baker, Bruinsma asked that material on his company be made available to various departments and professors who might be interested in money for projects. The grants would have ranged from $20,000 to $150,000 for work covering a period of six to 18 months.

Bob Lucas, associate vice president for research on the campus, acknowledged that a meeting was scheduled for Feb. 8 at which Bruinsma was to discuss the funding of computer science and aeronautics projects. Lucas said Bruinsma canceled the meeting.

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