Proposition 39′s fine print says that a school district which intends to propose a school facilities bond measure “must ensure before they vote (my emphasis), that voters will be given a list of specific projects their bond money will be used for…”

According to the June 8, 2010 sample ballot tardily arriving in Anderson Valley mailboxes, our school facilities bond, Measure A, proposes:

“To acquire, construct, and improve classrooms and facilities, including repairing, upgrading, and modernizing Anderson Valley Elementary, improving student access to modern technology at Anderson Valley Junior Senior High, improving energy efficiency, installing solar panels to reduce energy costs, and qualifying the District for $1.5 million in State aid, shall the Anderson Valley Unified School District be authorized to issue $15,250,000 in bonds at legal interest rates with annual audits, a citizens’ oversight committee, and no money for administrator salaries or overhead.”

Does that sound like a “list of specific projects” to you?

Blum at UC Berkeley

Darwin Bond-Graham contributed to this story.

On March 9, Blum Capital Partners executives held a meeting at the Cavallo Point Lodge at Fort Baker, in Sausalito (Marin County). Current and for­mer campus workers from UC Berkeley, UC Davis, and UC Santa Cruz — joined by several student sup­porters — were on hand to challenge Richard Blum on the poverty he promotes in his capacity as a UC Regent. Blum, who fashions himself as a global anti-poverty crusader by way of his Blum Center for Developing Economies at UC Berkeley, has had a primary hand in shaping the policies that have led to deep pay cuts and widespread employee layoffs at UC campuses. Moreover, as a leading finance capitalist and political influence peddler on a global scale, he and his ilk have played a strong role in causing the ongoing global economic meltdown — and the various financial austerity measures it is leading to.

During recent decades, the powers-that-be in the Golden State have grown accustomed to getting virtu­ally everything on their political wish list. Declare a state of emergency, ram through unpopular and unnec­essary measures that harm working class people and the environment, and brook no dissent in the process — that’s been the prescription of the US Treasury, International Monetary Fund, and World Bank when “structurally adjusting” national economies in the Global South and Eastern Europe. Of late, California’s political elites have used the same general formula to great effect in their home state.

Take the University of California. In November, only months after declaring a highly suspect “state of fiscal emergency,” the UC’s uber-wealthy 26-member Board of Regents approved a 32 percent increase on student fees. With this latest hike, the cost of univer­sity enrollment has risen by 171 percent in the last eight years. As we examined in Part II of this series for the AVA, “Disaster Capitalism University,” these fee increases do not even directly pay for students’ educa­tion, but instead are used as revenue and collateral by the Regents to boost their bond ratings with Wall Street lenders: a necessary condition for a larger debt-fueled development scheme centered on the finance capital, real estate, and high-tech sectors the Regents and their business partners preside over in their day jobs.

In the near-term, it appears the pain will grow much worse. Thanks to the the state’s regressive tax code, designed explicitly to favor large corporations and land barons, revenues have not only failed to keep up with spending, but the state’s budget gap this year, following several years of cataclysmic shortfalls, meas­ures somewhere between $20-60 billion — depending how you do the math. Despite Governor “We Have No Choice” Schwarzenegger’s admonitions against tax increases, taxes have in fact drastically increased in this state, especially on the poor, the young, and other populations lacking the political power and connec­tions wielded by those who field legions of lobbyists in Sacramento and otherwise dominate the capitol’s political machinery. Students are a prime example: the Regents’ serial gouging of them and their families actu­ally amounts to a massive tax increase on a particular segment of the population.

In this case, though, the group of Californians who are resisting this opportunistic exploitation of “the cri­sis” are actually giving the economic hit men a serious run for their money.

In response to the Regents’ November fee increase, a burgeoning student movement at University of Cali­fornia and California State University campuses occu­pied campus buildings named for former regents, presidents, and chancellors — a collection of dead white men who have loomed over these universities in years past. Occupiers of UCLA’s Campbell Hall, named after the UC’s 10th President, rechristened it “Carter-Huggins Hall,” after the pair of Black Panthers slain in an FBI COINTELPRO operation there on January 17, 1969. In the last few months, the occupa­tion movement has spread up and down the state, stir­ring students at even the most traditionally subdued campuses. UC Irvine, CSU Fullerton, and CSU Fresno students have joined the typically rowdier UC Berkeley and UC Santa Cruz campuses in taking over buildings, dropping banners, distributing incendiary pamphlets and handbills, and standing firm against police intimi­dation.

“WE make the crisis,” goes one popular slogan of the occupiers.

The newly insurgent mood on campuses is spread­ing quickly. Through its refusal to be co-opted and managed by the same university leaders and politicians who have colluded in structurally adjusting California’s educational system, the rebellion of California’s stu­dents — joined by many university workers and faculty members — is in the process of forcing a tectonic shift in state politics.

A New Student Insurgency

The militant phase of the new student movement kicked off in September. Over the summer, the UC’s 26-member Board of Regents had bestowed unprece­dented “emergency powers” on UC President Yudof, who responded by proposing the 32 percent fee increase, laying off hundreds of employees, and imposing mandatory “furloughs” on university faculty and staff. Administrators responded by cutting numer­ous popular campus-level programs. It was the single most violent episode of structural adjustment imposed by the Regents thus far.

On the opening days of fall instruction, students and workers at multiple UC campuses responded by holding rallies and protests. A group of roughly 20 UC Santa Cruz students occupied the campus’ Graduate Student Commons, unfurling multiple banners includ­ing one bearing the slogan “Raise Hell, Not Costs,” and another calling for an end to capitalism. The UCSC contingent voluntarily withdrew the occupation a week later, but the movement was fermenting rapidly, not only in Santa Cruz but elsewhere.

In October, UC Santa Cruz professor Bob Meister — clearly emboldened by the rebellious mood taking hold on his and other campuses — published a scathing critique of the university’s finances. In his open letter to students across the UC’s ten campuses,“They Pledged Your Tuition,” Meister cited the Regents’ own data and internal documents to reveal that the primary use of student fee revenue since 2004 has been as collateral for bonds to fund campus construction projects. Students take out “subprime” loans from banks and loan sharks, at interest rates as high as six percent, all designed by the Regents to shore up the UC’s strong bond ratings. Under the terms of their Moody’s bond rating, the Regents are encouraged to perpetually raise fees. Thus, they free themselves from the unpredictability of the State of California’s budget ax by relying on a stable, captive stream of revenue in the form of tuition.

In spite of the Regents’ insistence on the necessity of raising fees to astronomical levels, the university’s construction budget reached $8.1 billion in the 2008-09 fiscal year, a figure Yudof bragged in a letter to the Regents in early-2009 marked “an historic high.” At the height of the UC’s supposed financial difficulties, the university even loaned $200 million to the State — the university’s ostensible patron — in a stop-gap measure to help close California’s budget deficit!   Critiques of the university’s power structure writ­ten by UCLA instructor Robert Samuels and UC Ber­keley emeritus professor Charles Schwartz were also widely circulated among students, faculty, and workers earlier this year during the height of the campus occu­pations. Despite the Regents’ claims of being on the verge of running out of funding, Schwartz, Samuels and others have shown that the Regents actually hold bil­lions of dollars in reserve accounts. Samuels went so far as to call the UC a giant “hedge fund.” Such analyses among the faculty have further fueled the growing stu­dent rebellion.

During the two-day span of the November Regents meeting, students at UCSC, UCLA, and UC Davis all occupied campus buildings. One of two groups of UCSC occupiers took over the Kerr Hall administra­tion building, wielding a list of demands that included repealing the 32 percent fee increase, stopping all cur­rent construction on campuses, instituting transpar­ency in the UC’s budget process, and even demanding that the Regents and administration “cut ties with Lockheed Martin, Los Alamos & Livermore National Labs.”

The most significant turning point in the move­ment to “occupy and escalate” arguably occurred on Friday, November 20th, at the UC’s flagship campus, Berkeley. That morning, more than 41 students barri­caded themselves inside the centrally located Wheeler Hall, home to the largest lecture hall and many of the most heavily used classrooms on campus.

Word of the occupation gathered thousands of sup­porters throughout the day. Police moved in to evict the protest, but they were initially unable to break through the barricade inside the building, leading some of them to pound incessantly on the barricaded doors in frustration and snarl threats at the occupiers from the other side: “Get ready for your beat-down,” some of the students recall the police shouting up at them. At various points, the police beat the occupation’s out­side supporters with batons, and one officer even shot a Cal undergrad in the stomach with a rubber bullet. Shortly afterward, a graduate student’s fingers were destroyed by an officer who struck her repeatedly with a baton for placing her hand on the metal guard rail. Her finger was left hanging by a thread of flesh, and she required reconstructive surgery to repair the dam­age.

Instead of being intimidated into acquiescence by the police violence, most of the protesters were emboldened. Outside Wheeler Hall, supporters con­tinued to intervene, often physically preventing the police from evicting, arresting, and likely brutalizing the occupiers. By nightfall the occupiers remained ensconced in Wheeler Hall, a full twelve hours after the initial 6:38 a.m. Facebook posting, having sustained themselves there in the face of an all-day siege from the UC Police Department, the Berkeley Police Depart­ment, and the Alameda County Sheriffs Department. The crowd surrounding the building had swelled to upwards of 2,000. The stand-off ended when the occu­piers negotiated a truce with the police and Berkeley Chancellor Robert Birgeneau. They agreed to vacate the building, and the police agreed not to press charges against them. The occupiers left the building under their own power, to the raucous cheers of the gathered crowd.

A few days later, a group of 70 students took over UC Office of the President headquarters in Oakland. Rallies took place at almost every UC campus and many of the CSUs. A new student occupation of the administration building at UC San Diego began this past week, comprised primarily of people of color who are demanding an end to racist and exclusionary uni­versity policies, and who have connected their action with a cogent critique of global capitalism and the US occupations of Iraq and Afghanistan. Solidarity actions have sprouted up at Evergreen State College in Wash­ington State and even the University of Vienna. And a growing number of occupations are now being planned, at New School of New York (also the site of an occu­pation in 2009) and (rumor has it) in Boston, where California’s movement has catalyzed a teacher, and worker strike to take place on March 4.

March 4 will see major protests here in California across the UC, CSU, and Community Colleges. Stu­dents, workers, and faculty have planned for a state­wide day of action, again targeting the Regents, State Assembly, and Governor.

Proxies of American Capitalism

This movement reflects a growing understanding among students, workers, and faculty members that the fee increases, lay-offs, and programmatic cuts are only the beginning stages of a permanent and more far-reaching plan pursued by the university’s power struc­ture, whose members serve as proxies for American capitalism at large, and specifically as representatives of the financial elites who have gained unprecedented power over the state and economy. According to one incisive pamphlet, the November fee increase repre­sented a “moment where the truth of the UC [became] undeniable, where its ostensible difference from the violence of the larger society vanishe[d].”

This political violence was matched by the physical terror wrought by the various police departments who have responded to the occupations, particularly on November 20th in Berkeley. “It was the most horrify­ing things I’ve ever seen in my life,” one young woman told a KTVU news reporter in between sobs of shock, when describing the beatings she witnessed. Yet, UC Berkeley Chancellor Robert Birgeneau commended the police for “peacefully” handling the situation.

Against such blatant contradictions between offi­cial pronouncement and the experiences of most stu­dents, deep-seated liberal assumptions about the essen­tially benign nature of authority and the university itself have begun to vanish. The reality of the brutal political economy of global capitalism is being laid bare for a new generation of mostly middle class students to see. In this particular case, that global system has turned hundreds of thousands out of their homes, embroiled millions in odious mortgage, credit card, and student loan debts, and eliminated state support for everything from education to health care for children of poverty-stricken families, yet criminalized and often brutalized those who meaningfully resist what those in power have in store for them: much more of the same.

Of course, these protests did not spring fully formed from the void. Students at Berkeley and Santa Cruz have engaged in numerous direct action protests against the university power structure since 2005, ranging from tree sits that significantly slowed campus development projects, to protests against the univer­sity’s nuclear weapons development contracts. The UC’s major workforce union, AFSCME, has mobilized for several years now alongside student supporters to defend worker pay and benefits, which sag below the levels paid by peer institutions and even state and community colleges.

Black, Latino, and American Indian students have been struggling since before Proposition 209 in 1996 to overcome the state’s institutionalized racism and clas­sism that have shut out working class students from the UC. Part of this effort to increase access to higher education has involved educational outreach programs into Los Angeles and Bay Area urban school districts where, because of the hyper-resegregation of the edu­cational system since the 1970s, some high schools are upwards of 95 percent non-white. These same schools tend to be the most impoverished, lacking even the most rudimentary pedagogical resources and extracur­ricular opportunities that facilitate a transition to col­lege and beyond. These programs to open up the uni­versity to traditionally excluded students have been some of the first cut by the Regents’ austerity meas­ures.

The most damaging effects of these taxes and cuts have been visited upon departments like Ethnic Stud­ies and Feminist Studies, and against educational out­reach missions to students of color. This fundamentally racist assault on working class students has gotten so bad that roughly only four percent of the UC study body is African American, as compared with roughly nine percent of the overall state population, and a dis­proportionately high number of those black students who do attend the UC attend the system’s least pres­tigious campuses such as Merced and Riverside. Last year, only 124 black students enrolled as freshmen at UC Berkeley. Only 19 American Indian students were part of this same entering class.

BART police officer Johannes Mehserle’s unpro­voked murder of young, black Oakland resident Oscar Grant in January 2009, widely shared over YouTube and mainstream news programs, was an especially important catalyst of the Berkeley actions. Many of those now involved in organizing the building occupa­tions partook in setting the streets of Oakland aflame in the street battles following Grant’s murder (without which Officer Mehserle likely would not have wound up facing charges of murder). Students and young peo­ple across California have been connecting the dots: dismally low rates of admissions into the UC for black and Latino students are matched by shockingly dispro­portionate rates of incarceration of these same popula­tions. More black men in California are now in prison than enrolled in a university. Analyses relating the grave injustices being visited upon the ghettos to the exploitation of students and workers are becoming increasingly sophisticated and common-sensical.

This rebellion is set against the overall backdrop of what John Ross has called an American “Obama­landia.” In January, the largest crowd in UC Berkeley’s Sproul Hall since at least 1970 gathered to celebrate Obama’s inauguration by watching it on a big screen rented out by the student government. With Obama-mania now waning, if not down right extinguished, many of those same students were out in force to sur­round Wheeler Hall a mere few hundred paces away from the Sproul Plaza steps, undaunted by the threats levied by the UC’s riot police.

The loss of faith in authority among these students, surely hastened by the Democratic Party’s declining ability to appropriate and channel their critical ener­gies, is palpable. Whether it is the effort to transcend the bursting of a speculative economic bubble by fuel­ing yet another speculative bubble, or the attempt to solve interlocking ecological crises caused by industrial capitalism through still more capitalism, or a campaign to forestall violent blowback against US imperialism by waging still more wars of aggression in the heart of the world’s greatest energy-producing region, the efforts of political elites at virtually all level of society to address the multi-layered crisis they have presided over appear more farcical and hubristic by the day, revealing as they do the self-destructive nature of a political and eco­nomic order based on an ideology of endless growth.

The University of California, led by an arrogant and structurally unaccountable Board of Regents, presents a microcosm of these larger global crises. Through their neo-liberal approach to managing the UC, and their other roles in steering state government, the Regents had a primary hand in creating the state’s budgetary meltdown and the UC’s specific woes. Now, the solution they offer is even more neo-liberalism, perhaps including full-fledged privatization of the uni­versity. One lesson already drawn by the students who have been occupying buildings and rallying against lay­offs is that the same individuals and institutions who create large-scale crises aren’t liable to fix them. Rather, if the problems are to be fixed, it will be because they take matters into their own hands.

In a sense, these California students state are merely late in joining with their counterparts in the rest of the world in protesting neo-liberal privatization. Student strikes at the National Autonomous Univer­sity in Mexico City throughout the 1990s, for example, had a profound influence on social movements in the global south. In the past few years, strikes and occupa­tions in opposition to neo-liberal restructuring of edu­cation have occurred at universities in at least a dozen countries, perhaps more. In the fall, 2,000 students at the Academy of Fine Arts in Vienna began an occupa­tion of their university, after some of them had con­ducted a solidarity action with the California protest­ers at the American embassy in Vienna.            The occupation movement’s ethos strongly reflects that of the European autonomous social movements that arose in Germany and Italy following the dissolution of the New Left in those countries in the ’70s and ’80s. Stu­dents celebrate the building takeovers not merely as acts of political protest aimed at “influencing” the power elite, but as opportunities to form “autono­mous” organizing spaces. It may sound odd to the uninitiated, but many students have paired their battle cry of “occupy everything” with “demand nothing!” In this case, autonomy means independence from all forms of capitalist institution and authority, as well as from centralized forms of leftist political organization and liberal democratic procedures. The radical flank of the movement has important tactical shortcomings, which we will examine in another column, but one thing is overridingly clear: Something new is afoot here.

To paraphrase the 1960s Berkeley Free Speech Movement spokesperson Mavio Savio, students today are not only raw materials of the productive economy, whose lives and identities are formed and deformed in the service of corporate America. Nowadays, they have also been effectively rendered as a dehumanized reve­nue stream, as debt collateral for finance capital’s next spectacular bubble, forced to take on lifelong debt in the face of a dying economy so that the university can run purely on speculation. Yet, the promise that this debt will pay off in the long run is growing more hollow by the day. There are few jobs available, and there already exists a glut of university-trained graduates competing for those few that will be created.               As with students and other young people in the 1960s, some­thing much deeper is stirring than just temporary anger over degrading economic conditions. Aware, even if subliminally, of the unworkability and distortions of many institutions, many are in the process of radically interrogating the roots of the present crisis – and many, dissatisfied with the answers they have thus far received from the authorities, distrust and reject them. Through the new student movement, previously unar­ticulated frustrations and aspirations have found an avenue for expression, while providing an opportunity to experiment with new social forms.

For now, their protests are causing no end of trou­ble for California’s ruling elite, who are responding with eagerness to co-opt and channel it in more mod­erate directions that preclude further militant direct actions. In fact, UC President Yudof has even sur­rounded himself with a high-paid public relations staff, replete with Madison Avenue types of advertising execs, to conduct a publicity campaign on behalf of the university, which ostensibly targets Sacramento legisla­tors with appeals to increase university funding, but which also appeals to students whose attention the Regents would much rather turn away from their radi­cal challenges to the university’s internal finances. “Students are a legitimate voice. [They] are there as a consumer, and we are seeing if our product is fulfilling your needs,” UC Regents Chairman Russell Gould — one of California’s leading finance capitalists — has offered by way of sympathy with the student move­ment.

Governor Schwarzenegger’s chief of staff, Susan Kennedy, even credited the movement with inspiring the governor’s recent proposal to restore some funding to higher education by privatizing some of the state’s prisons. “Those protests on the UC campuses were the tipping point,” she said.

Naturally, Kennedy and the Regents have failed to credit the militant occupations that sparked the larger movement to which they are making empty promises: Schwarzenegger’s inane privatization proposal has little chance of making its way through the State Legislature this summer intact, as Regent Richard Blum has even acknowledged. Meanwhile, these state and university leaders have denounced the occupation movement and its offshoots (including the recent highly publicized and sensationalized riots in Berkeley), to the extent that they have remarked on it at all, in a transparent effort to divide its participants from more moderate students, staff, and faculty members.

As with any political movement, there are indeed ripe divisions between those who advocate different tactical approaches. In one effort to get the current pulse of the student wing of the movement, leading up to the March 4 strike, we contacted our friend Laura Zelko, a third-year Berkeley student majoring in public health. Zelko, who has been deeply involved in organ­izing the radical flank of Berkeley’s campus-based resis­tance, spoke to us while engaged in a “study-in” inside of Shields Library, UC Davis, over the weekend of Feb­ruary 6-7.

“There is a lot of public critique by organizers of the University’s resemblance to a corporation,” Zelko said. “We recognize that the UC’s administrative body, which fancies itself a corporate board, is doing its utmost to undermine the agency of students, faculty, and staff who are attempting to resist what the univer­sity has in store for us.”

At the same time, Zelko notes that a moderate political philosophy that emphasizes changing hearts and minds in Sacramento, absent of any fundamental challenge to the university power structure, still holds greatest sway among most students. “Of course the piece missing from that puzzle is that the Regents are infinitely intertwined with Sacramento, and in the case of the several Regents Ex Officio, are Sacramento,” she said.

A Local Structural Adjustment

For those of us who live in Mendocino County, this burgeoning movement involves our daughters, sons, friends, brothers, sisters, mothers, fathers, aunts, uncles, and significant others living down there in the heart of Babylon, in the Bay Area, Los Angeles, San Diego, and other urban campus settings. If we are seri­ous about the multiple crises that most directly impact us in our own lives, we might do well to study up on the current student rebellion and its more direct links to Mendo.

On the California North Coast, the economic melt­down has heaped further hardship on a region already devastated by the liquidation of forest lands in the ’80s and ’90s, accompanied by the disastrous “grape bub­ble” of vineyard developments that has been colonizing hillsides and valley plains ever since.

With every passing year, more and more water is diverted (“stolen” being the proper term) for the pro­duction of wine grapes. With every year, there are fewer and fewer fish fill local creeks and rivers. At the rate things are going, we too face an “absent future” – the exact phrase UC students used to describe their plight in a widely circulated “communique” last year. The sterile dominance of the vineyard industry and the private equity groups behind the biggest of them are building an economic system that amounts to a verita­ble “grape bubble,” characterized by rising land values, disastrous water and land abuses, increasing exploita­tion of immigrant workers, and the decimation of local self-reliance. This is also a manifestation of neo-liberal plunder, a local one.

Perhaps the greatest symbol of the University of California’s connection to the violence of the larger society, recalling the student pamphlet we quoted ear­lier, came at Barack Obama’s presidential inauguration, where then-UC Regents Chairman Richard Blum stood in the first column of a handful of main support­ers who were immediately lined up behind the new president — an image immortalized the following day on the cover of the Los Angeles Times, among other media outlets. As a man whose wealth is directly tied to the systemic impoverishment of millions of people, Blum is a perfect symbol of the university, its crisis, California’s unwinding under the heels of financial greed, but also for the ongoing destruction of our eco­systems and social fabric here in Mendo.

In the final installment of this four-part series, we will explore how Alpha Regent Blum and Senator Dianne Feinstein’s business interests and political webs are playing a leading role in destroying the California North Coast through speculation-fueled vineyard development.

(E-mail Will Parrish at wparrish@riseup.net and Darwin Bond-Graham at darwin@riseup.net.)

***

Enjoy our free stories? Subscribe to theAVA.com for just $25 a year and get access to the entire site.

Darwin Bond-Graham contributed to this story.

This past July, following the California State Legislature’s decision to strip $813 million from the Univer sity of California’s Fiscal Year 2009-10 budget, the UC’s 26-member Board of Regents voted unanimously to declare “a state of financial emergency.” Such a “state of emergency,” the university’s official by-laws state, should accompany an “imminent and substantial deficiency in available university financial resources.”

The Regents also voted to grant special “emergency powers” to UC President Mark G. Yudof. Yudof promptly marshaled his new and vaguely defined authority to lay off hundreds of workers, impose pay cuts and furloughs on remaining university staff, and propose a 32 percent increase in student fees which the Regents approved in November.

At the same meeting, Regents Chairman Russell Gould announced the formation of a new UC Com mission on the Future. Its de facto function has been to further the privatization of the university. Notably, Gould is one of California’s most prominent finan ciers, a man who served as vice chairman of Wachovia Bank during its growth as one of the leading subprime mortgage lenders in the United States. He and Yudof serve as the commission’s co-chairmen. In Gould’s words, the commission’s task is “nothing short of re-imagining” the University of California.

In her 2007 book The Shock Doctrine, journalist Naomi Klein describes the rise of a political and economic system she calls “disaster capitalism,” under which the preferred method of reshaping the world in the interest of multinational corporations is to sys tematically exploit the state of fear and disorientation that accompanies moments of great shock and crisis. Among the main prototypes Klein offers for this insidious form of economic and social engineering are Augusto Pinochet’s Chilean regime, installed by the CIA in 1973, along with the US invasion and occupa tion of Iraq and the US government response to the crisis of Hurricane Katrina. During these disastrous moments, leaders typically invoke “states of emer gency” and heap special powers on themselves to ram through unpopular and unnecessary measures.

The function of a rhetorical emphasis on emergen cies and disasters, Klein notes, is to legitimate actions that would normally be rejected by the vast majority of the population. “Economic shock therapy,” a term frequently used by the International Monetary Fund to describe large-scale privatization of publicly owned assets, is the inevitable course that results from this strategy.

The State of California’s political elites and busi ness leaders have taken to using this language of crisis whenever discussing the UC. In the past few decades, state funding of the university has suffered steady ero sion. The UC now receives more funding than ever from private corporations and the federal government (the latter being in most instances pretty much the same as the former). Its various revenue streams range from student fees to several billion dollars in medical hospital revenue to private grants and donations, to its own hedge fund-like investments portfolio, to atomic bomb dollars from the Department of Energy.

Thus, despite the state budget cuts, the UC’s over all revenue reached an all-time high of $19.42 billion in the 2009-10 academic year, and the Regents’ claim that the UC faces an “imminent and substantial” funding deficit is inaccurate, to say the least. Accord ing to both the university’s own financial documents and Moody’s bond rating agency, the university had access to over $8.3 billion in unrestricted investment funds it was holding in reserve at the time.

The university has undergone a neo-liberal-style “structural adjustment” at the behest of the UC Regents, and this transformation has been accelerated during Yudof’s tenure as president. Under the leader ship of California’s economic elite, the UC has become the leading prototype for a “disaster capitalist university.”

Since the mid-1990s, administrative salaries have absorbed a dramatically increasing share of the univer sity’s overall budget. According to a study by UC Ber keley Professor Emeritus of Physics Charles Schwartz, the number of UC administrative positions increased by an almost unbelievable 118 percent from 1996 to 2006, as compared with a 34 percent increase in fac ulty positions and 33 percent increase in students over the same period. As a result, there are currently 3,600 UC employees who make more than $200,000 a year, many of them through administrative positions.

An even more damning revelation was made public this past October when UC Santa Cruz Professor Bob Meister published his scathing analysis of the UC administration’s use of student tuition dollars as col lateral for construction bond debts. In addition to his PhD in economics, Meister serves as Chairman of the Council of University Faculties — essentially, a faculty union with representatives on all 10 of the university’s campuses. He knows what he’s talking about. According to the Regents’ own data and policy docu ments, the primary use of student fee revenue since 2004 has been as collateral for bonds to fund campus construction projects. In this “modified credit swap,” students are forced to take out “subprime” student loans, often charging six percent interest, so the uni versity can borrow money at a reduced rate to con struct new facilities like — to take one example — the Blum Center for Developing Economies at UC Ber keley, which UC Regent Richard C. Blum’s own con struction company, URS Corporation, was contracted by the university to build.

And those subprime student loans? They’re often owned by big banks like Wachovia and other financial outfits that many of the UC Regents and their busi ness partners are shareholders or executives of. So the whole cycle begins and ends with massive public and student debts, both of which increase as the Regents partake in further undermining the tax base while looting the public sector, again ratcheting up the crisis rhetoric.

UC Los Angeles instructor Bob Samuels has observed that “Moody’s even slipped into its bond rating for the UC system the need for the [UC] to restrain labor costs, increase student fees, diversify revenue streams, feed the money-making sectors, and resist the further unionization of its employees,” Sam uels concludes that, “like the International Monetary Fund (IMF) or World Bank, the bond raters tie access to credit to the dismantling of the public sector and the adoption of neo-liberal ideology.”

To understand fully why the University of Califor nia’s internal finances are being subjected to “eco nomic shock therapy,” much like a Third World debtor nation under the thumb of the IMF, it’s neces sary to know a bit about the history and function of the university’s power structure. Although it is nomi­nally a public institution, the UC is not owned and governed by the State of California. Rather, it is the UC Regents who call all the shots. The Board of Regents is a corporate entity formed in 1879 for the explicit purpose of thwarting a populist social move ment of small farmers who demanded that the univer sity become more responsive to their needs.

“During a tumultuous decade in California his tory,” historian John Aubrey Douglass has written, “many saw the new University of California as serving the interests of the upper classes, focusing on classical ‘gentlemanly training’ and replicating the Yankee pri vate institutions of the East. The detractors of the university demanded that, as an instrument of social and economic development, the university primarily serve the training and research needs of agriculture and industry, the stated ‘leading objective’ of the institution under statutory law.”

During the California constitutional convention of that year, a clique of mostly San Francisco-based fin anciers and industrialists managed to defeat the democratic demands of farmers and small business owners. The crowning achievement of this elitist coup was the establishment of the UC Board of Regents, a corporate entity that owns and operates the univer sity. To maintain their power against all opposition the Regents gave themselves twelve year tenures that are explicitly meant to insulate them from any politi­cal pressures. The UC thus became what Douglass calls “a fourth branch of state government.”

Since then, the leading sectors of the California economy have self-appointed individuals who repre sent their economic interests on the Board. The Regents mold UC policies in broad ways that benefit capital’s leading monopoly sectors. The current going price for an appointment — probably the most pres tigious one at the governor’s disposal, it should be noted — seems to be $50,000, bare minimum. Give the Gov. this sum, and you too could be a Regent.

Until relatively recently, that meant that Regents would promote policies designed to build cutting edge economic sectors in and around the UC campuses. So, for much of the Board’s history, they’ve acted as Karl Marx’s ideal government: an executive board of the “bourgeoisie,” working if not for the interest of every industry, at least most. In recent years, the Board of Regents has become dominated by financiers, how ever. As with the economy at large, these wizards of hedge funds, credit markets, venture capital, real estate speculation, and all the other games played with billion dollar pots of money, have begun to run the university itself as a $19 billion dollar speculative bub ble with ample opportunities for enormous growth through “volatility.”

These new alpha Regents specialize in leveraged buyouts and privatization of publicly traded compa nies, and they have long practiced this same basic business philosophy on the university.

In recent years, the most prominent among this cadre has been Richard Blum. As we detailed in last week’s AVA, Blum’s five-decade career as a finance capitalist has been distinguished by the levels of skill and panache he has applied to the time-honored task of siphoning off public money into one’s own corpo rate coffers, as well as those of one’s financial and political allies. Blum, who is married to US Senator Dianne Feinstein, is one of the leading power-brokers in the Democratic Party within both California and the United States.

Notably, it was Blum who virtually hand-picked President Yudof for UC President, having chaired the selection committee that oversaw Yudof’s appoint ment. At a March 2008 press conference heralding the Yudof hiring, the San Francisco Chronicle noted that Blum seemed “visibly ecstatic.” In April, the Chronicle quoted Blum again, saying of Yudof, “we disagree on almost nothing. If I were giving Mark a grade, I would give him an A-plus.”

Another prime example of the university’s “inves tors’ club” (the title of an upcoming series by investi gative reporter Peter Byrne) is Gerald Parsky, a San Diego venture capitalist who reportedly commutes daily by jet to Los Angeles. As a Republican Party powerhouse, Parsky was so influential during his 1996-2008 tenure on the Regents that the American Fed eration of State, County, and Municipal Employees (AFSCME) dubbed a particularly influential faction of the Board “The Parsky Clique.” In addition to being president of Los Angeles-based Aurora Capital, recent additions to Parsky’s resume include acting as senior economic advisor to John McCain presidential cam paign and as chairman of the Schwarzenegger admini stration’s Commission on the 21st Century Economy. Just as Parsky helped steer the UC toward ever-greater privatization throughout his tenure as a Regent, his commission issued a series of recommen dations on reforming the state’s tax and revenue system in a manner more favorable to big business, even prompting some observers to label the Parsky Commission’s proposals “California’s Shock Doc trine.”

Current Regents Chairman Russell Gould is another financier and California Republican Party heavy. In addition to his role at Wachovia Bank, he served as California Director of Finance in the Pete Wilson administration in the 1990s. After that, he served a stint as assets managers of the $5.5 billion J. Paul Getty Trust Fund, a charitable organization founded with money from the Getty oil fortune. The Gettys are neighbors of one Richard Blum and Dianne Feinstein in San Francisco’s uber-bourgeoise Pacific Heights neighborhood, where Mr. and Mrs. DiFi purchased a $16.5 million palatial estate in 2005.

(As an aside, the Getty Trust was run in those years by Barry Munitz, former chancellor of the Cali fornia State University System. From 1984 to 1991, Munitz was vice president of Maxaam Corporation under Charles Hurwitz, as the company clear-cut the lands and livelihoods of California North Coast resi dents. Munitz has since been a leading force behind shaping the California Business Roundtable’s public education policy agenda, which strongly favors neo-liberal privatization.)

Another Regent, Paul Wachter, acts as Gov. Schwarzengger’s personal financial adviser. Regent George Marcus is a lead organizer of The Real Estate Roundtable, the main political voice of real estate capital in the United States. Regent Judith Hopkin son, whose tenure recently ended, is a retired execu tive of Ameriquest Capital Corporation, a big mort gage company that is partly responsible for precipi tating the current economic crisis: Ameriquest lent billions in sub-prime loans to families across the US knowing full well they would have trouble making payments down the line as rates increased. And the list goes on.

One of the primary enterprises Richard Blum has presided over in recent years is the real estate corpo ration CB Richard Ellis. With projects in nearly 100 countries, CBRE is the largest brokerage firm on the planet. In a notable example of how Blum’s own par ticular business interests have become increasingly enmeshed with those of the university, during the course of his tenure as a Regent, CBRE has con tracted with at least eight of the UC’s 10 campuses over the past decade. Most often, the company has consulted with these campuses to produce glossy reports highlighting the beneficial economic impacts on the immediate regions that host them, as well as that of California in general. The UC’s San Francisco, Davis, Berkeley, San Diego, and Riverside campuses have all paid CBRE to produce precisely these kinds of economic development treatises.

Each of these CBRE reports marshals a wide range of statistical data to promote a particular vision of the UC’s role in California’s larger economy and society. While paying occasional lip service to the UC’s con tributions to “the richness of California culture,” the reports overwhelmingly emphasize the UC’s role in fostering high-tech business enterprise, premised on a decidedly Reagan-esque view of the inherent superi ority of top-down economic spending. The core pur pose of UC San Diego, according to one CBRE report, is to fuel “the expansion of the skilled labor pool for high-tech businesses and biotech businesses in San Diego.” UC Irvine is “an economic engine powering prosperity” owing to its various big business spin-offs and the high-tech start-up companies founded by its faculty.

The implicit conclusion is that the university’s com plete subordination to monopoly capital is the primary reason for its existence, and that anything the UC could do for biotech, aerospace, real estate, and finance capital, it should do. In this way, the shift to privatization of the university’s finances, including student fees that are redirected to pay for campus construction projects, goes hand-in-hand with the efforts of state and business elites to render the uni versity a wholesale servant of California’s neo-liberal economic machinery. Under this model, State funding is seen as akin to “local matching funds,” sweetening the investment pot much like the role federal highway funds play in road projects, the main purpose being not to make the university affordable for students, but rather to expand the university’s physical footprint and build fancy new research centers that will create all manner of techno-gadgetry to inflate the next bub ble.

The UC Regents, in other words, have come to con ceive of UC campuses almost entirely as incuba tors for a constellation of mini-Silicon Valleys: alli­ances of venture capitalists, real estate speculators, and high-tech entrepreneurs writ large upon large and overlapping swaths of California. It stands to reason that the UC’s leadership would be enamored of the region of the United States that is home to more mil lionaires per capita than anywhere else in the country, but which has also seen one of the sharpest declines in real wages among its working class. Silicon Valley also leads the way with the most temporary workers per capita, the highest level of economic inequity between genders, and the greatest concentration of toxic Superfund sites in the United States. Neo-liberalism in a nutshell.

Even so, the Regents and UC’s executives have long spoken in excited tones about spreading the model. The UC’s newest campus, UC Merced, was sold entirely on the premise that it would produce a critical mass of biotechnologists, nanotechnologists, engineers, and other wizards of the ruling high-tech religion that mythically creates economic booms that lift all boats. Currently, though, the Central Valley is experiencing some of the greatest levels of unem ployment and highest home foreclosure rates in the country. UC Santa Cruz, traditionally the arts and humanities campus of the UC system, was trans formed during this era into what some administrators happily called the “Silicon Beach.” Much like with the global neo-liberal economy it has done so much to advance, the great majority who don’t already possess ample resources are left under this model to fend for themselves.

Laytonville native Natalie Rose-Engber is one local resident whose has borne the impact of the ongoing structural adjustment of the university, as of California’s economy in general. She was also one of the students involved in opposing the Regents in their treatment of the university like their own private business enterprise during her time as a student.

Rose-Engber grew up at the Black Oak Ranch, bet ter known as “The Hog Farm,” the famed inten tional community with outposts in Laytonville and Berkeley. In 2007 and 2008, she was one among per haps a few hundred UC students who often made the trek to the remote corners of the UC system where the Regents held their “public” meetings. Students would speak during the notoriously brief public com ment periods, hold rallies, and occasionally disrupt the proceedings when all else failed — and all else invaria bly did.

“The Regents would just be sitting there typing on their computers and not listening to any of the stu dents,” Rose-Engber recalls. “But, of course, they’re almost all multi-millionaires and directors of multi-national corporations. What do they know about being a student who’s saddled with mountains of debt they’ll spend the rest of their life paying off?”

Rose-Engber’s debt is roughly $40,000. That same sum of money, a little more than one generation prior, would have been enough to buy a first home. Though she says her time at UCSB was an invaluable part in shaping who she’s become, Rose-Engber wonders what her future has in store, having assumed such a large debt burden during a period of protracted economic decline and widespread joblessness. There are tens of thousands of young Californians who are annually being saddled with similarly crushing debts at UC and the CSU campuses, a condition that fore closes on their future choices, making virtual inden tured servants of many of them.

As with every other region of California, Mendo cino County is now experiencing a surplus of univer sity grads whose futures are constrained by heavy debt. Extrapolating from the UC’s enrollment and retention data, approximately 275 students hailing from this area have been enrolled at one or another of the UC’s 10 campuses at any given point in the last decade. During the past four years alone, that group collectively paid or borrowed more than $7 million in university fee money. Had they attended the univer­sity eight years before, they would have paid less than $3 million. For comparison’s sake, the extra $4 mil lion-plus that the Regents have extracted from local students and families would be enough to cover more than half of Mendocino County’s present budget gap.

As student fees continue to skyrocket, it is well to keep in mind that Blum is a part owner of a pair of for-profit education companies. Blum Capital Part ners owns a large stake in Career Education Corpora tion, the world’s second largest private “diploma mill” corporation, which runs more than one hundred for-profit schools across the country, while also making tens of millions of dollars in sub-prime loans to its students. Blum Capital also owns a 19 percent stake in ITT Educational Services, Inc., another for-profit school that makes millions off student loan debt. Blum, the UC Board of Regents’ resident siphoner-in-chief of public funds, purchased more than 220,000 new shares in the firm soon after the UC Regents approved the University of California’s latest fee increase this past November.

If the UC is prioritizing various toxic combina tions of science and industry at the expense of stu dents, then what are those projects? Examples abound. In June 2006, the UC announced an agree ment with the world’s second largest oil company, British Petroleum, whereby it will receive half a bil lion dollars per year over 10 years, principally for research into genetically modified elephant grass and other transgenic plants that are candidates to produce alcohol for non-fossil car fuel. The project is housed as a facility on campus called the Energy Biosciences Institute (EBI).

This is one of UC Berkeley’s largest current applied research programs, and it naturally comes straight from the disaster capitalist playbook. The project is justified under the pretense of helping to solve two major crises — global climate change and its twin bogeyman, oil depletion. In reality, biofuel monoculture has become perhaps the leading cause of dispossession of small farmers in the Global South, as well as the destruction of important ecosystems such as the Amazon Basin rain forest. “If the governments promoting biofuels do not reverse their policies,” journalist George Monbiot has warned, “the humani tarian impact will be greater than that of the Iraq war. Millions will be displaced, hundreds of millions more could go hungry.”

Berkeley’s biofuels institute will only further enable multi-national corporations to penetrate, reor ganize, poison and despoil the lands, livelihoods, and psyches of Amazon Basin and other cultures. The net impact of the EBI on the environment — that is, the actually existing ecosystems of South America, Indo nesia, et al. — will be decidedly negative. On the day of the contract signing, then-UC President Robert Dynes heralded it as “a great day for Mother Earth.”

Both Dynes and Lawrence Berkeley National Labo ratory Director Stephen Chu, now duly installed as the Obama administration’s secretary of energy, referred to this project as a “new manhattan project.” It was a fitting designation, although the original Manhattan Project never quite ended, and it has only gained ground under a president who sold the world on “hope” and “change.” The UC continues to co-manage the Los Alamos and Lawrence Livermore nuclear weapons compounds, which have designed every nuclear weapon in the US arsenal dating from the annihilation of Hiroshima and Nagasaki, as part of for-profit partnerships with the world’s largest con­struction and engineering firm, Bechtel Corporation. The UC-Bechtel contracts are worth as much as $80 billion in revenue over the course of their 20 year lifespans, a hefty chunk of change when you’re con cerned with your bond ratings.

On February 1, the Obama administration unveiled a budget in which both of the UC’s weapons labs would receive a massive funding “surge.” The pro posed funding increase of 23 percent at Los Alamos would be the facility’s largest since 1944. Much of that funding is for a new factory to produce plutonium bomb cores, the explosive triggers of modern thermo-nuclear warheads, for the expressed purpose of outfit ting the first new nukes to be developed since the end of the Cold War. The investments are sold as the need to “maintain the US nuclear deterrent” in a time of rapidly escalating threats, allegedly, from Iran, North Korea, and potentially even nuclear-armed ter rorists.

Again, crisis begets opportunity if you’re properly positioned in the most privileged circles, so it’s fitting that one of the two junior partners in the UC-Bechtel management team should be Richard Blum’s now-former company, URS Corporation. At the time Blum became a Regent, URS already had a $125 million con tract to perform construction and engineering at Los Alamos. It was a natural extension of his general busi ness philosophy that Blum would have been eying wholesale ownership of the weapons lab at the time.

That in mind, perhaps a little Q & A is in order. Which entities now run the Los Alamos and Law rence Livermore weapons labs? The University of California, Bechtel, and URS Corporation, along with a couple of other junior partners. Which UC Regent had a lucrative financial partnership with the Bechtel family, via a $3.5 billion medical technology supplies company named Kinetic Concepts, that precedes the UC-Bechtel weapons lab partnership by eight years? Richard Blum. Who was URS Corporation’s primary financier and vice president for three decades? Rich ard Blum. Which UC Regent was among a select group of policy wonks who participated in a nuclear weapons policy conference in Oslo, Norway, in 2007, organized largely by a long-time Bechtel executive, George Shultz, who has been instrumental to securing the weapons labs’ recent funding increases? We won’t even bother answering that last question — this exer cise has become entirely rhetorical.

From its inception, the University of California has been an institution inherently bound up with the course of American empire. It was the 18th century British philosopher George Berkeley’s poem “Amer ica: A Prophesy” that inspired the university’s early trustees to adopt him as their flagship campus’ name sake. The poem’s final stanza perfectly captured their vision of the university’s larger social role, that of intellectual hub for ever-expanding American capital ism, which was itself to herald an end of history liberal utopia. Notably, the same stanza also helped occasion the idea of “Manifest Destiny,” the widely held belief in the mid-19th century that a Protestant God had divinely ordained the United States to expand west ward to conquer and subdue the American Indians and the “wilderness” they inhabited.

“Westward the course of empire takes its way;

The first four Acts already past;

A fifth shall close the Drama with the day;

Time’s noblest offspring is the last.”

The poem’s last line provides a fitting epithet for the university, as for so many institutions instrumen tal to the era of US economic dominance now passing in a financial meltdown. These days, the course of global capitalist empire is one of precipitous flux and decline. The UC’s particular difficulties are a micro cosm of wider economic and ecological difficulties facing virtually all large-scale organizations during this time of deepening crisis for capitalism generally, and for California with its status as primary exemplar of American culture and politics specifically. California’s decline is best symbolized in the personas of the elite finance capitalists who now control the world’s facto ries, mines, forests, firms, and universities — men whose cannibalistic search for ever-expanding profits has led them to destroy the social and ecological underpinnings of the entire economy. Another obvi ous cause for decay is American imperial overreach, which has been hastened by a pair of exorbitant mili tary occupations.

While the aggressive and opportunistic plans of the UC Regents and their hatchet man, President Yudof, are the most immediate cause of the univer­sity’s rapid descent, it is this larger context that demands greatest attention from students, faculty, workers, and the people of California. It is highly improbable that the UC and institutions like it will ever return to an idyllic era of reliable state financial support. There will never again be low fees, an ever-expanding roster of PhDs, or increasing and diverse student enrollments. The UC is an unsustainable institution that developed as part of a wildly unsus­tainable period of American economic expansion. We are now in an iteration of the world capitalist econ omy’s unraveling, and as an integral part of this econ omy, the university is coming undone right along with it.

Contact Will Parrish at wparrish(a)riseup.net and Darwin Bond-Graham at darwin(a)riseup.net.

***

Enjoy our free stories? Subscribe to theAVA.com for just $25 a year and get access to the entire site

Guest Commentary by Susan Rush, Manchester

There was no surprise, on my part, by the article which appeared in the Independent Coast Observer (ICO) by D. Glenn O’Hara on February 4, 2010, in which he states Point Arena Superintendent Mark Iacuaniello was “cleared” in the civil suit filed by former Point Arena Elementary Principal Matt Murray for “fraudulent inducement.”

Mr. O’Hara was able to compile his article without taking the time or effort to leave his office in Gualala, not having to drive in the rain to Ukiah to obtain one piece of information from the trial in order to get the “real scoop” as the reporters from the Anderson Valley Advertiser did on a daily basis.

Did Mr. O’Hara take the time to report Mr. Murray’s ex-boss who flew in from the Long Beach School District to support Mr. Murray, a person he stated was “key” in the team which helped to obtain the highest award a school district can receive which was presented to them by President Clinton? NO, he did not!

Did Mr. O’Hara take the time to report that two ex-board members took the stand to support Mr. Murray with one of the board members flying in from Colorado? NO, he did not!

Did Mr. O’Hara take the time to report on the number of teachers, community members and parents who took the stand on behalf of Mr. Murray because of the many good things Mr. Murray accomplished, not only for our children but for the whole community?  NO, he did not!

Did Mr. O’Hara take the time to report that the only persons Mr. Iacuaniello could find to personally take the stand on his behalf were his wife, a handful of disgruntled teachers, and a classified staff member? NO, he did not!

Did Mr. O’Hara take the time to report there is absolutely no “paper trail” of so-called grievances the teachers had against Mr. Murray to terminate him? NO, he did not!

Did Mr. O’Hara take the time to find out that Mr. Murray’s demise began in the Spring of 2006 when the teachers began to “circle the wagons” with Iacauaniello as the wagonmaster?  NO, he did not.

How could he?  He would have had to leave his office and drive in the rain to get the whole truth!

What, Mr. O’Hara did was stay out of the rain (perhaps, out of the truth would be more appropriate) and relied on information previously written in the ICO; information from his “good friend” Superintendent Iacuaniello; information from a teacher who claims “anonymity” (that is NOT exactly the word I would use).  This anonymous teacher, I believe, was willing to step forward because “he” received a less than favorable evaluation from Mr. Murray but, at least, he can now receive all the “hugs” needed from the current elementary principal, Paula Patterson to do his job.

Yes, Mr. O’Hara did speak to Mr. Murray  “for a minute” but the article remained skewed in favor of the superintendent and, again, his “good friend” Mark Iacuaniello which is not surprising because the ICO has taken this stand since Mr. Murray’s termination.

What really happened on Friday, January 29th, 2010, at the Mendocino County Court House in Ukiah.  The jurors, under legal constraints, handed down the following verdict:  On two counts Superintendent Iacuaniello was found GUILTY (concealment and false promises) and on two counts he was found not guilty.  After the jurors handed down the verdict, they gathered around Matthew Murray, the “terminated” ex-principal of Point Arena Elementary School and his wife.  Two of the women jurors tearily stated they were “so sorry, we ALL believed you got screwed but there was nothing legally we could do”.

So, who really won?  A legal system that protected Mr. Iacuaniello because he is a public employee. If Mr. Iacuaniello was employed in the private sector, the case, most likely, would have had a different outcome. Mr. Murray would have had the legal right to prove wrongful termination, and I believe he would have won his case, hands down!

Mr. Iacuaniello was quoted in the ICO as stating, “It’s been hell.”  However, it is a “hell” he, himself created. If he wants to know what “hell” really is like, he should walk in Matthew Murray’s shoes.

What I think it boils down to is Mr. Murray was, indeed, the moral victor in this case, as confirmed by the comments of the jurors above “you (meaning Murray) got screwed.” Matt Murray proved that in our small coastal community you CAN raise the bar, and have our children achieve and pass State and Federal Goals. After all, he was able to set a gold standard for our children in which they did achieve passing goals with flying colors.  However, since his termination the school has taken a nosedive and currently is back into State Program Improvement because of the staff’s inability to meet State and Federal Goals. Hopefully, some day we can do away with small town, good ol’ boy politics and do what should be done, as Mr. Murray did, assure  that our children are well educated!

I have said this many times: the future of our communities lies within our schools. Of course, look at what happened to Mr. Murray: for doing an outstanding job for our children, he was terminated without cause.

***

Enjoy our free stories? Subscribe to theAVA.com for just $25 a year and get access to the entire site.

Iacuaniello and his lockstep school board had just fired Matt Murray although Point Arena Elementary’s test scores, discipline, campus safety and parent support had dramatically improved during Murray’s tenure. Murray had been hired to drag the perennially troubled school out of what amounted to state failed status.

Ms. Patterson had been the English Language Development Coordinator at the Point Arena High School when Iacuaniello picked her to replace Murray.

: Millions Stand Behind Him: Richard Blum and Dianne Feinstein, architects of the 1996 Headwaters forest buy-out scam, with Barack Obama at his inauguration.” Blum is far-left with scarf. Feinstein is far right.

Darwin Bond-Graham contributed to this story.

On April 17, 2009, with the edifice of the global economy rotting under an architecture of monumen­tal greed, war deficits, and official hubris, the Univer­sity of California, Berkeley conducted a ground­breaking ceremony for its Richard C. Blum Center for Developing Economies. Before a throng of students, faculty, staff, and PR specialists affiliated with the Center’s new multi-UC campus “Global Poverty & Practice” program, the Blum Center’s namesake was joined on stage by one of the many political heavy­weights he counts among his business partners, Al Gore. The former Vice President praised Blum as a long-time friend and cited the new institute as a key to solving the interlocking problems of global poverty and global climate change, two of the many vexing boogeymen threatening to destabilize the profit-making order.

To paraphrase Upton Sinclair, who published a book on the general subject in 1921, some of the greatest sociopaths in this country’s history have affixed their names to university buildings in an effort to burnish their reputations.

Richard Blum is a San Francisco-based finance capi­talist presiding over a business empire that is, to say the least, expansive. Hedge funds? Blum owns one outright and wields a significant share of various oth­ers. Real estate? His primary investment vehicle, the $7 billion Blum Capital Partners, owns the largest real estate brokerage firm on the planet, CB Richard Ellis, of which Blum is chairman of the board. Construc­tion? Until public scandal prompted him to sell off his holdings, Blum was a majority partner in a construc­tion and engineering company that did billions in business with the US military among other govern­ment clients. Education? Try being the resident Alpha Regent of the largest public university system in the world, the University of California, while also being a primary owner of the world’s second-largest for-profit education firm, Career Education Corporation.

Large land-holding firms? Digital media company of which Al Gore serves as frontman? Health industry corporation fighting to undermine the expansion of public health care? Border-town maquiladora that build weapons components for the Department of Defense? Check, check, check, and check.

The greatest investment of Blum’s career was undoubtedly his marriage, roughly 30 years ago, to the politically Joe Lieberman-esque US Senate Democrat, Dianne Feinstein. At the time of this meshing of Blum’s financial interests with Feinstein’s formidable political ambitions, Feinstein was Mayor of San Fran­cisco and Blum — already one of her main financial backers — had much of his fortune staked to various development projects in the City.

Blum’s preferred means of personal enrichment rely on strong nation-state interventions in markets and societies to promote unfettered corporate domi­nance of national economies and distant lands. It should come as no surprise, then, that he and “DiFi” are among the leading proponents of the Interna­tional Monetary Fund/World Bank/US Treasury nexus’ notion of how economies ought best be devel­oped. This form of economic “improvement” (deriving from the Anglo-French “emprouwer,” meaning “to clear for profit”) involves burying Third World economies under mountains of debt backed by usurious interest rates, facilitating the greatest level of investment possible by rapacious multi-national cor­porate entities, privatizing government functions, and gutting social services. Ironically, this agenda of neo­liberal “structural adjustment” has decimated and impoverished communities across the planet, causing suffering among the hundreds of millions of people Blum’s heart now bleeds for: poor folks.

The economic and political policies promoted by Richard C. Blum and associates, including Senator Feinstein and other leaders of both the Democratic and Republican Parties, have locked nations and peo­ples across the planet into a system of de facto coloni­alism whereby their lands and destinies are controlled by distant, debt-holding banks and hedge funds — among them, Blum Capital Partners, LLC, and New­bridge Capital, LLC, of which Blum was chairman of the Asia investment division for five years. The result has been what author and UC Irvine sociologist Mike Davis calls a “planet of slums,” where 0.23% of the world population privately owns more than 50% of the land, and 85% of urban dwellers in the Third World are consigned to living on illegal squats in hellish shanty towns under conditions of grinding poverty.

Just ask the people of Haiti, whose capital city now greatly resembles a war zone reduced to rubble ala Fallujah, Iraq, or Kabul, Afghanistan, not by virtue of a natural disaster per se, but because the IMF-WTO-US Treasury specialists in immiseration have forced them off their land into desperately sub-stan­dard slum housing, often perched tenuously on the side of deforested hills and ravines. This “urban geog­raphy of mass vulnerability,” as the academic field of disaster sociology refers to it, was created by the destruction of the country’s rural agrarian economy that provided for subsistence, in an economic trans­formation imposed by international creditors with the constant backing of the US military.

Yet, at UC Berkeley, we have Dick Blum hoisting up “sustainable solutions to the toughest poverty challenges” as his new line of work.

Blum’s name is a familiar one to those acquainted with the details of the corporate plundering of Cali­fornia northcoast forests and communities through­out the 80s and 90s. The year was 1995, and Texas corporate raider Charles Hurwitz — whose company, Maxxam, had laid waste to as much ancient forestland as possible, as quickly as possible, for nearly a decade — was looking to cash out of his ownership of the Headwaters forest in central Humboldt County. Headwaters was the flashpoint of the largest direct action protests in the history of the earth defense movement, as well as lawsuits and legislative initia­tives aimed at preserving what little was left of old-growth redwood ecosystems in the Pacific Northwest. It so happened Hurwitz was an investment partner of Blum from way back. Blum also happened to be a major donor, fundraiser, and political booster of US President Bill Clinton.

Clinton and California Governor Gray Davis duti­fully discharged their duty as proxies of the super-wealthy in general — and, in this case, Blum in par­ticular — by appointing the inviolable “DiFi” to chair a legislative team to negotiate the purchase of Head­waters from Hurwitz. Feinstein and Hurwitz agreed on a final deal in 1996, hailed by Feinstein’s website as one of her 10% career accomplishments. Hurwitz gave up very little of real economic value — Maxaam had clear-cut most of the forest in question — in exchange for a $380 million taxpayer-funded payout, or more than four times the market value of the trees at the time. Much of the money went directly into Hurwitz’s personal bank accounts. That despite the fact that all the government really needed to do to protect the acreage in question was enforce the Endangered Species Act. Regardless of the fact that Headwaters became officially “protected,” the vast majority of California’s remaining old growth and other mature stands of redwood were pillaged by the end of the decade. Hurwitz’s empire cashed out, like other timber conglomerates, by liquidating the forests and the livelihoods of the North Coast.

Alexander Cockburn and Jeffrey St. Clair later revealed that Blum and another Hurwitz pal, the Houston-based Continental Airlines chairman David Bonderman, had personally met with Clinton at the White House in a “coffee klatch” fundraiser on December 15, 1995, likely to discuss the details of the Headwaters buy-out, which occurred six months later. Bonderman and Blum are both directors of the Wilderness Society, the only national environmental organization that praised the buy-out.

For all the fanfare that emerged in the Clinton era about how corporate globalization had rendered the nation-state a bit player in the larger drama of the new, “free trade”-dominated corporate economic order, the nation-state’s role in propping up the global capitalist system has never been more central. That role is being laid bare as never before with each multi-billion dollar subsidy the federal government passes onto the financial industry — an estimated $5 trillion in total taxpayer money since the bail-out program commenced in fall 2008 (an exact figure is hard to determine). What is known in academic-speak as “neo-liberalism” represents little more than the sophisticated apex of a governing system refined and perfected over the course of several decades (nay, cen­turies), which is principally designed to socialize the risks of rapacious capitalism while privatizing public goods to create unprecedented levels of profit for the super-wealthy.

Blum is not only a representative of this system, but one of its most skillful promoters and practitio­ners. Throughout his career, and particularly in recent years, he has siphoned off taxpayer money into the coffers of his various personal holdings with a calcu­lated brazenness that would make the most swagger­ing Costra Nostra blush. The Headwaters Forest scam was indicative of exactly how these people have done business for nigh on three decades. To pull only a handful of examples from the very recent past:

In early-2007, investigative reporter Peter Byrne published a groundbreaking series in the North Bay Bohemian, the “Feinstein Files.” Byrne revealed that as chairperson of the Senate’s Military Construction Appropriations subcommittee from 2001 through 2005, Feinstein supervised the appropriation of more than $1.5 billion for two defense contractors, URS Corporation and Perini Corporation, in which Blum owned a controlling interest. In the series’ smoking gun, long-time Blum business partner Michael R. Klein told Byrne he regularly took the highly unusual step of supplying Feinstein’s office with lists of Per­ini’s current and upcoming contractual interests in federal legislation, ostensibly so the senator would abstain from voting on these matters for ethical rea­sons (which she never did). “Earmarks, you know, set asides, you name it, there was a system in place which on a regular basis I got notified, I notified her office, and her office notified her,” said Klein, Perini’s vice chairman at the time. Blum later sold his holdings in URS to the tune of $57 million in personal profit.

In January 2009, Feinstein introduced legislation to route $25 billion in federal funding to a Federal Deposit Insurance Corporation (FDIC) program designed to forestall home foreclosures by expediting loan workouts and expanding federal loan guarantees. On the surface, Feinstein’s legislation was a straight­forward intervention on behalf of troubled homeown­ers nationwide. But less than two months prior, the FDIC had also awarded Blum’s real estate company, CB Richard Ellis, a multimillion dollar contract to sell homes the agency had inherited from failed banks. This move was also highly unusual, since Feinstein is not a member of the Senate committee that oversees the FDIC.

This past November, the University of California Board of Regents imposed an “emergency” 32% fee increase on undergraduate students, effective in the 2009-10 academic year. The increase stems not only from severe state-mandated budget cuts, but also a series of decisions by the university’s board of regents — of which Richard Blum is the resident alpha mem­ber (although no longer chair of the board), having been appointed to that post by Gray Davis — that have effectively pledged student fee increases to the capital bond market, thereby creating a financial incentive for the Regents to continually raise fees, in a pyramid scheme that raises money for campus con­struction projects. It should come as no surprise that URS Corporation, the same company that made $1.5 billion on contracts awarded by Feinstein’s Senate military construction committee, has been the main contractor for the largest university capital projects in recent years: UCLA’s $150 million reconstruction of Santa Monica Hospital, UC Berkeley’s $48 million nanotechnology laboratory, and Berkeley’s $200 mil­lion Southeast Campus Integrated Project, which includes a seismic retrofit of Memorial Stadium and an expansion of the Haas School of Business — home of the Blum Center for Developing Economies. More on this in next week’s AVA.

Blum-Feinstein, Inc. has accomplished these immense transfers of public wealth absent of almost any serious media scrutiny. But in recent years, the media deep freeze has slowly begun to thaw, begin­ning with a pair of front-page stories in the San Fran­cisco Chronicle in May 2005. Chronicle science writer Keay Davidson’s fine reporting was spurred on by a public outing at a UC Regents meeting when students revealed Blum’s conflict of interest as a member of the committee overseeing the two nuclear weapons labs the UC runs on behalf of the US government. Blum’s URS Corporation had a $125 million, five-year con­struction and engineering services contract with the UC’s Los Alamos, NM nuclear weapons development compound at the time. Less than two years later, Peter Byrne’s series regarding Blum’s war profiteering appeared in the North Bay Bohemian.

This past semester, UC Berkeley Professor of Geog­raphy Gray Brechin co-taught a course on inves­tigative journalism. Brechin is best known as the author of the definitive historical work on Northern California’s ruling elite, Imperial San Francisco. He has been an observer of Blum-DiFi, Inc. for years.

“I’m very impressed by the reluctance of most jour­nalists to follow a story that has been screaming to be done for years while they have been covering their ears and eyes,” Brechin told us. “You guys and Peter [Byrne] are about the only ones who understand that behind the billowing smoke appears to be a roaring bonfire.”

Blum-Feinstein’s concentration of power is great­est in their home state, of course, and it stands to rea­son in any case that Blum’s CB Richard Ellis would be making a killing off the ongoing fire sale of State of California assets. In October, CBRE secured a con­tract from the California Department of General Services to broker over $2 billion in office buildings the state intends to privatize.

Blum’s fortunes aren’t entirely a function of Fein­stein’s legislative exploits. Nor are Feintsein’s political powers entirely a result of her Daddy Warbucks. And the State of California’s economic plight stems not only from the avarice of a small handful of individuals, but from an economic system that is inherently self-destructive and crisis-prone.

Blum and Feinstein, however, have worked hand-in-glove with other members of the state’s banking, real estate, agribusiness, and military-industrial inter­ests to buffer regressive tax and spending policies, helping to devise the very austerity measures currently being hoisted upon the people of California across all public sectors, not just within the University of Cali­fornia.

Therein lies much of the reason Blum is now so quick to tout his anti-poverty bona fides. Blum, you see, has a public relations problem. It’s built into the way he does business. It’s built into the political economy he straddles as one of the US empire’s most connected and wealthy power elites.

Gray Brechin notes that Blum seems to have hired a public relations firm to bolster his personal brand. “Blum has gotten an extraordinary amount of fawning publicity in a very short time, including a front page feature in the Haas Business School magazine about what a whiz he is. I believe that this coincided with the black tie event at the Palace Hotel where Haas celebrated him as Global Citizen of the Year and I joined others from Cal to protest his actions as Alpha Regent.”

“Then there were the two treacly profiles of him in the San Francisco Chronicle recently. I can’t believe this is all coincidental.”

It isn’t. Nor is it coincidental that, as Peter Byrne revealed, longtime Blum business partner Michael Klein has founded a nonprofit foundation that makes grants to media organizations that watchdog the fed­eral government. The organization started after Wikipedia instituted a policy blocking congressional staffers from editing Wiki entries pertaining to their bosses. Employees from Dianne Feinstein’s office had just been caught editing entries in the online encyclo­pedia that cast Blum and Feinstein in an unfavorable light. Thus does one of Blum’s closest business associ­ates now control a significant portion of the budgets of several ostensibly independent organizations that monitor political corruption.

Blum is also now strongly affiliated with a multi-campus academic program at the UC, centered on an institute at UC Berkeley that Blum founded with $15 million in seed money, designed to put band-aids on the symptoms of global poverty he and his wife have had an instrumental role in creating. Beyond this exercise in mystifying the causes of poverty in distant lands, the state’s economic elite — with Blum and Feinstein helping to lead the charge — have long endeavored to turn their philosophy of neoliberal privatization, fiscal austerity, and personal enrichment on the State of California itself. Richard C. Blum Center for Developing Economies, indeed.

Blum is a self-professed Buddhist and friend of the XIVth Dalai Lama. Many of his anti-poverty efforts are geared toward slum dwellers in Tibet and Nepal. “Would an actual Buddhist provide the bulk of the funding for a multi-million dollar institute, only to attach his own name to it?” Brechin mused.

The populist anger seething below the surface of the American body politic has not yet boiled over into any sort of coherent rebellion against the elites who have wrought the greatest economic catastrophe since the 1930s. There is little indication that it will any time soon. Blum’s own financial empire, however, is now quietly under assault by the hundreds of Univer­sity of California students who have learned to loathe the man who has done more than any other to struc­turally adjust their university and price many of the state’s youth out of higher education. These cognizant students, supported by campus workers paid poverty wages by university leaders like Blum, are now organ­izing building take-overs and some of the largest stu­dent protests on those campuses of the past four dec­ades.

In the next part of this exclusive series for the AVA, we will focus on Blum’s role in gutting the Uni­versity of California, where the tuition increases paid in the last four years by Mendocino County residents alone would be large enough to close roughly half the $7 million county budget gap.

Footnotes for this article are available at darwinbondgraham.blogspot.com.

***

Read Part Two of this series, available to web subscribers, here.

***

Enjoy our free stories? Subscribe to theAVA.com for just $25 a year and get access to the entire site.

]]> http://theava.com/archives/3874/feed 2 http://theava.com/archives/3659 http://theava.com/archives/3659#comments Wed, 27 Jan 2010 23:53:12 +0000 Mark Scaramella http://theava.com/?p=3659 Bruce McEwen contributed to this story

Testimony continues in the civil trial of Point Arena School Superintendent Mark Iacuaniello. Iacuaniello is accused of “fraudulent inducement” — hiring principal Matt Murray to improve Point Arena’s troubled elementary school then firing Murray after he’d successfully lifted the school from what amounted to state probation. Testimony so far indicates that Murray’s insistence on improved job performance alienated the school’s long entrenched teachers who complained privately to their pliable, $100,000+ a year superintendent who subsequently sacrificed Murray to appease the teachers, one of whom replaced Murray as principal.

Attorney Keith Faulder was sifting the jury pool in the case of Murray v. Iacuaniello.

Faulder is representing Murray.

Iacuaniello, whose defense is paid out of public education funds, is represented by a blustery fellow out of Redding called Ayres.

Iacuaniello gets a free lawyer, Murray has to pay for his.

Iacuaniello is being sued by former school principal Matt Murray for deceptive practices, aka “fraudulent inducement,” meaning Iacuaniello brought Murray to Point Arena to shape up Point Arena Elementary then, when Murray shaped up Point Arena Elementary, Iacuaniello, supported by a nexus of energy-deficient teachers and the usual cringing school board, fired Murray.

Murray had successfully lifted the historically troubled Point Arena from state probation.

Then he was fired.

Behind closed doors.

With no fair hearing, no due process, no nothing.

Except.

Except Superintendent Mark Iacuaniello’s demand to his captive school board, in writing no less, that either Matt Murray went or he went.