Creaky College Foundations

November 11, 1990

Federal tax law forbids private, non-profit foundations from giving money to politicians. So does the written policy of the University of Maryland System. So does the charter of Frostburg State's University Foundation. Yet that did not stop Frostburg President Herb F. Reinhard Jr. from dipping into foundation funds for $1,240 in political donations in the past five years.

At least one other state college, Salisbury State, used money from its non-profit foundation for political contributions to Gov. William Donald Schaefer's 1988 fund-raiser. Both foundations may have jeopardized their tax-exempt status and have raised suspicions about other expenditures. Until this controversy erupted at Frostburg State, neither UM auditors nor legislative auditors had examined foundation records.

These foundations were established to give university officials greater flexibility in raising private funds and then spending the money for college-related activities. Foundations are not hampered by strict government rules controlling spending practices. But given the indiscretions that have been revealed, that will have to change.

College presidents have used these contingency funds to promote their own stature in their communities. They have turned to these pots of money to ingratiate themselves with key legislators and Mr. Schaefer. They are politicizing the state's college system and distorting the purpose of these discretionary funds.

Sadly, Governor Schaefer has aggravated matters by heaping lavish praise on Frostburg's president and defending Dr. Reinhard's actions -- even after he was warned by aides not to do so. Once UM and legislative auditors -- and possibly the state prosecutor and the IRS -- finish their inquiries into the Frostburg situation, the governor may have to make an embarrassing retreat.

Meanwhile, some faculty members are seeking Dr. Reinhard's resignation. UM Chancellor Donald N. Langenberg is also mulling over possible action.

The best possible step would be for the university and governor to support a bill previously sponsored by Sen. Julian L. Lapides forcing college foundations to open their books for public scrutiny. Shenanigans could be spotted quickly. In the past, college presidents have lobbied strenuously to kill this bill. That was a self-serving move.

These foundations must be held accountable for their actions. Senator Lapides' bill would deter campus leaders from using non-profit foundation money for questionable purposes, such as political donations. If college presidents don't have the good sense to stop such practices on their own, the legislature ought to do it for them.

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