A Cool Head in UC’s Sometimes Heated Atmosphere

As University of California leaders struggle to resolve a debilitating controversy over executive pay, the most effective role in that effort, many say, is being played not by its president but by the head of the regents, Gerald L. Parsky.

The Los Angeles lawyer and investor, best known as a prominent Republican who has headed President Bush’s California campaigns, has emerged in recent months as the public university system’s most visible leader.

Taking an unusually activist approach to the volunteer job, he has testified before -- and helped calm -- lawmakers angered by the compensation scandal. He arranged an outside audit of UC managers’ pay and perks and proposed administrative and structural reforms to help the university’s embattled president, Robert C. Dynes.

He played a key part last year in UC’s ultimately successful effort to hang on to a share of its historic contract to run the Los Alamos nuclear weapons lab in New Mexico.

Now in his second year as chairman of the Board of Regents, Parsky, 63, also has managed to bring the often fractious 26-member panel together. Several regents and others interviewed said that despite his own partisan background, he has effectively depoliticized discussions on such contentious issues as admissions, student fees and the compensation controversy.

“The regents have often made political hay out of every issue,” said Bruce Fuller, a UC Berkeley education professor who led a faculty petition drive in December for an outside investigation of UC’s pay practices.

“To his credit, Parsky has focused on the current management issue without politicizing it, without denigrating the institution, without showing disrespect for Dynes,” Fuller said.

Parsky is considered a consensus-builder and, as he has demonstrated in his handling of meetings, has brought a more businesslike approach to the board. He keeps the meetings moving but also encourages debate. He doesn’t cut people off and has let students and the public speak at greater length than in the past.

The board’s public and private meetings are better attended by the regents; some had stopped attending in less collegial times. Meetings also are noticeably less tense, and there are occasional light moments. Regents tease Parsky about his penchant for timeliness and jokingly applaud one another for sticking to designated committee times.

“He is an incredibly effective leader,” said regent Sherry L. Lansing, former chairwoman of Paramount Pictures. “He’s very direct, very sincere, and gives people a chance to express opposing views in an atmosphere of respect. We feel like a team again.”

State Sen. Gloria Romero, a Los Angeles Democrat who has been among UC’s sharpest critics on the compensation issue, also praised Parsky’s handling of it so far. “He has been very forthright, very responsive to our concerns, and he hasn’t passed the buck,” Romero said.

Parsky took over as chairman after the tumultuous term of John J. Moores, the owner of the San Diego Padres. In 2003 Moores sparked a statewide controversy when he released a report that criticized UC Berkeley for admitting students he described as under-qualified.

In March 2004, the regents, after a heated debate, took the extraordinary step of publicly reprimanding Moores after he accused UC, in Forbes magazine, of discriminating against Asian Americans in admissions decisions.

The regents voted 8 to 6 to affirm their support for UC’s admissions policies while formally distancing themselves from Moores’ criticism of newly established standards that allowed admissions officers to consider applicants’ personal achievements alongside their academic ones.

Parsky, who voted for the broadened admissions guidelines and continues to support them, did not go along with the censure. He said recently that although he considered it inappropriate for Moores to identify himself as the regents chairman in the article, the reprimand struck him as too strong.

Three months later, Parsky was chosen to replace Moores, and the regents have responded to his more collaborative style with evident relief.

Several said he had inspired more members to become engaged and brought focus to their efforts by urging them to specialize in certain areas, such as healthcare or the UC-run laboratories.

Parsky, who heads Aurora Capital Group, a Westwood-based investment firm, was appointed to a 12-year term on the UC board in 1996 by Gov. Pete Wilson. The political composition of the board has since shifted, with many of his fellow Wilson appointees -- including outspoken conservative Ward Connerly -- gradually being replaced by those of Democratic former Gov. Gray Davis and, more recently, those named by Gov. Arnold Schwarzenegger.

The furor over compensation began in November, after media reports that UC has paid millions in recent years in bonuses, relocation allowances and other extras to top executives. Making matters worse, the lucrative packages were provided when UC leaders, complaining of lean funding, cut other costs and repeatedly raised student fees.

The disclosures have led to legislative hearings, with more planned for later this year.

Testifying in February before a state Senate panel, Parsky said the regents were initially unaware of the details of several controversial pay and severance packages. He also said administrators in some instances had failed to follow clear policies set by the board in the early 1990s, after a similar crisis.

He assured legislators that the problems would not recur. People would be held accountable, Parsky said, and “if that means firing people, we will.”

In a recent interview, Parsky sidestepped direct questions about Dynes’ future but said the UC president “shares regents’ concerns” about the university’s problems.

The UC president “has now represented to the regents that he understands what needs to be done to proceed, and in light of that, we have confidence he will work with us to address the issues that have been raised,” Parsky said.

As a public university, UC must be careful to be transparent and accountable, he said. “And at the heart of the issue is the failure on the part of the administration to be transparent.”

UC officials are awaiting the results of several investigations into the compensation issue, including the state audit and a 10-year audit by PricewaterhouseCoopers requested by the regents. Both are expected to be completed by summer.

Parsky also pointed to plans announced recently to reorganize the president’s office. Those are still taking shape but may include creating positions for a chief financial or chief operating officer -- or both -- as well as hiring a compliance officer to make sure administrators are adhering to relevant policies.

“We clearly need to assist the university and the president to bring more business capability to the administration of the university,” Parsky said.

Sen. Abel Maldonado (R-Santa Maria), who took a tough tone with Dynes and other UC leaders during the Senate hearings, said last week he was impressed with Parsky’s efforts to repair an “archaic” administrative system.

“I’m well satisfied that Mr. Parsky and the regents are moving as fast as they can to fix an archaic system in place at the university system,” Maldonado said in an interview.

“It’s a system that needs some change, and I think he’s moving forward on that,” he said.

Parsky’s term as chairman is due to expire in June but, given the continuing investigations, some regents are quietly considering breaking precedent to extend it, at least for a few months.

Regent Judith Hopkinson said she was among those who favor such a move.

“He’s been so intimately involved with both the regents and the Legislature on the compensation issue that it would be a bit of a disconnect if he steps down now,” she said. “There’s a hope that he can continue to do that, for at least a while.”

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Gerald L. Parsky

Age: 63

Education: Bachelor’s degree in English, Princeton University; law degree from University of Virginia Law School

Business: Chairman of Aurora Capital Group, Los Angeles-based investment firm. He was attorney and senior partner with the Los Angeles law firm Gibson Dunn & Crutcher, 1977 to 1992; assistant secretary of the U.S. Treasury Department, in charge of international affairs and capital markets, 1974 to 1977; English literature and poetry teacher at Suffield Academy in Connecticut, 1965.

Other experience: From 1981 to 1991, he was a trustee of Princeton University.