Investigation Reveals Questionable Spending By CSU Chancellor's Office

LONG BEACH (CBS) — As Cal State students face another tuition hike this fall, a CBS2 News investigation has found tens of thousands of dollars of questionable spending by the chancellor's office.

Cal State students are angry -- angry over rising tuition.

Recent protests have included arrests and the use of pepper spray. Now some students are drinking just juice in a hunger strike.

But our hidden cameras found no shortage of catered food at the CSU Chancellor's Office.

We obtained the CSU credit card statement from last year, uncovering tens of thousands of dollars in catered meals, plus expensive dinners and car service rides -- mostly paid for by taxpayer money.

"I think that is completely ridiculous and that disgusts me, actually, as a student. They're raising our tuition and eating nice meals and we're suffering," said CSU student Matthew Delgado.

There are nearly half a million students in the Cal State system statewide and more than 40,000 faculty. With California's money woes they will all be hit by budget cuts.

There is talk of freezing enrollment and eliminating classes. Tuition will be going up 9 percent this fall, that is more than 300 percent over the past decade.

But that did not stop the spending.

An $840 bill from Erheart's Catering is typical of some of the charges we found for food, which was brought in for meetings.

We uncovered receipts for breakfasts and lunches from Chicken Dijon to lasagna.

The meals were not expensive per person, but they added up to more than $110,000 in catering bills for 2011.

That is enough to pay tuition for 18 students for one year or to fund dozens of classes that are being canceled.

Sophomore Sarah Garcia, 19, is on the hunger strike. We asked her if she gets catered meals.

"No. My mom cooks for me sometimes," Garcia said, laughing.

So far she has $8,000 in student loans and cannot even get the classes that she needs to graduate.

"I'm a deaf studies major and because my registration date was so late last semester, I wasn't able to get any deaf studies classes. So I'm falling behind because there are no classes available and that $110,000. That would have funded tons of classes," Garcia said.

We caught up to CSU Chancellor Dr. Charles Reed.
Students have made Reed the poster child for excessive spending by hanging banners on campus with his salary in clear view.

He also gets to live in a house paid for by the university and drive a state-funded car.

"What do you say to students and faculty when they see that and you're asking them to make sacrifices," I asked?

"Well our office is isolated, so to be much more efficient, we provide a lot of lunches and sometimes breakfast for all the 23 campus groups that come to our office to work," Reed said.

But it is not exactly isolated. A Google search of the area showed at least 10 restaurants less than a mile from his office.

"What about the catering," I asked Reed.

"I said that we provide meals to the employees from throughout the 23 campuses," Reed said.

"But that's tax money, isn't it," I asked?

"Sometimes it is and sometimes it's not," Reed replied.

It is not just catering. We found a receipt for 60 people at the Il Fornaio Restaurant in Manhattan Beach. The food cost almost $2,500. They had 35 bottles of wine for around $1,200. The total came to more than $5,000, which works out to $85 a person.

It was charged to a CSU credit card.

CSU policy states, "Operating fund may not be used to pay for alcoholic beverages," but a university spokesperson emailed, claiming the dinner was paid with non-state dollars. We asked for proof, but she never provided any.

"This was on the CSU credit card," I showed Reed.

"You know it's reimbursed too," he said.

Reed claimed he was not at that dinner, but according to another guest list, he was at this one at Scott's Seafood Grill in Costa Mesa last February.

The check totals over $1,500 for 17 people, including eight orders of sea bass for $264. That comes to $33. There was also $240 worth of alcohol.

It was charged on a CSU credit card, but a university spokesperson said the money was reimbursed by the David and Lucille Packard Foundation as part of a $27,500 grant that went to a teacher preparation summit.

The meal, according to the guest list, was a pre-summit dinner.

Finally we uncovered receipts for car-service rides, mostly to the airport, totaling close to $10,000.

Conferences, like one at the Westin at LAX, cost taxpayers over $70,000.

All totaled, we found $766,890.32 charged on CSU credit cards last year.

That could pay tuition for 127 students for one year.

"Faculty find this sort of expenditures extremely disappointing, because they have been facing budget cuts for the past five years," said Teri Yamada of the California Faculty Association.

But Reed said that there would be no changes.

"Is that money wisely spent," I asked him?

"Absolutely," he said.