DeSteph’s “Relentless” Search for the Truth at UVa

uva_fog_smallby James A. Bacon

The controversy over the University of Virginia’s $2.2 billion Strategic Investment Fund may have settled down since a state auditor determined in August that the controversial pot of money was in full compliance with Virginia law. But William R. DeSteph, Jr., R-Virginia Beach, isn’t satisfied. He has released correspondence expressing his ire at university officials for keeping legislators and the public in the dark.

“My confidence in the forthrightness of the University’s leadership has been undermined by its own contradictory statements and numerous private conversations about public matters,” DeSteph wrote in a Sept. 14 letter addressed to UVa President Teresa Sullivan. It was a matter of “grave concern,” he said, that she continued “to refuse to provide the public records requested by my colleagues and me.”

“If you and the University’s leaders persist with obvious disingenuous efforts to keep the doors closed and Virginia in the dark,” he wrote, “you will only reinforce the nation that something’s amiss.”

DeSteph’s sentiments echoed those of a Sept. 8 letter that Del. Terry G. Kilgore, R-Gate City, had addressed to Sullivan and Rector William H. Goodwin Jr.: “Our concerns have always been that not only did the public not know about [the fund], much less where to look, but also that clearly neither did your Board of Visitors nor we as legislators charged with keeping a tight rein on the public’s purse.”

The existence of the fund was revealed by former Board of Trustees member Helen Dragas in a Washington Post op-ed shortly after she left the board this summer. She charged that board members had been coaxed into raising the tuition for incoming first-year students by 10% without understanding that income from the fund, estimated to be about $100 million per year, could have been used to offset tuition increases. University officials planned to use the money to recruit star faculty, enrich the student experience and provide financial aid for lower-income students as part of a longer-term plan to boost UVa into the ranks of the Top 10 universities nationally.

Critics contend that, while what UVa did was legal in setting up the Strategic Investment Fund, the process was opaque to the public, the legislature and even some members of the Board of Trustees. They also charge that the first full explanation to the board of the purpose to which the fund would be put was held in a closed session in likely violation of Virginia’s Freedom of Information Act.

A joint Senate-House subcommittee of the General Assembly held a hearing last month to look into the matter. A state auditor showed how UVa had consolidated various reserves and other restricted funds and handed them to the University of Virginia Investment Co. (UVIMCO) to invest, which it did successfully. The actions were legal, properly accounted for, and fully disclosed in university documents, the auditor said.

In pursuing their inquiries, DeSteph and his legislative allies have asked for voluminous information from the university. In a Sept. 2 letter to DeSteph, Sullivan referred to “thousands of pages of document that we have already provided in response to your requests.”

According to a Sept. 9 letter to DeSteph, Senate Majority Leader Thomas K. Norment Jr., R-James City, had advised Sullivan that “any and all legislative requests for information on this matter would come either through the Joint Subcommittees or the respective Committee Chairs. … It is important that any requests for information be focused and pertinent to the use of the Fund to advanced the University’s mission.”

However, DeSteph, Kilgore and others were not satisfied. As DeSteph wrote to Senate Majority Leader Thomas K. Norment Jr., R-James City:

The issue has never been the legality of the fund. Instead, the issues have always been the University’s administration disguised the money, had private conversations with just a handful of the Board of Visitors’ leadership about how to spend public money and the investment income off of this public money, and convinced the Board to go along with its plans in an illegal closed session while simultaneously instructing members to keep them a secret from us and the public. …

Rector Bill Goodwin has been far less than candid over the course of numerous conversations, I’ve been given the run-around by President Terry Sullivan, and plainly told by Pat Hogan, the University’s chief operating officer, that what’s gone on is none of my business.

I have documentation and accounts from a wide range of sources — including many board members — that for whatever reason, Virginia’s leadership and citizens have been led astray.

In his correspondence, DeSteph referred to his service as an intelligence officer with Naval Special Warfare and the Naval Investigative Service. “That experience taught me to be dogged in the pursuit of the facts and take people at their word until I learned otherwise. But if I came to understand that misdirection and deflection were at work, my search for the truth would be relentless.”