Clubs banking procedure set to change

Between 2008 and 2009, former SF State cheer coach Ashlee Nicole Haley allegedly spent more than $20,000 of cheer club funds on personal expenditures.

This included food, rent and a trip to Las Vegas, according to court reports.

The University Police Department began an investigation of Haley sometime in 2009, which culminated in Haley being charged with 29 criminal counts – 12 counts of grand theft, 16 counts of obtaining money through false pretenses and one count of embezzlement. All but three of those counts are felonies, said Seth Steward, a spokesman for the San Francisco District Attorney.

“This is a very sad violation of trust among a peer group,” said University spokeswoman Ellen Griffin in September 2010.

While the San Francisco District Attorney’s Office prepared to charge the former cheer club treasurer in fall 2010,

UPD began a similar investigation into fraternity Alpha Phi Omega’s Mu Zeta chapter.

Leadership, Engagement, Action, Development – the administrative organization charged with overseeing campus clubs and fraternities – was made aware of the possible embezzlement of about $3,600 by an APO treasurer in the beginning of the fall semester, according to LEAD Director Joseph Greenwell.

The investigation closed without charges being filed, but the bank recouped APO’s money.
However, partly because of the embezzlement cases involving two campus organizations, LEAD, in partnership with Patelco Credit Union, has created new banking procedures for all student clubs and fraternities beginning Feb. 25.

“Patelco has always been open to allowing student organizations to bank with them,” Greenwell said. “They have worked with us to decide how to best benefit student organizations.”

These new procedures require: every organization to bank with the Patelco branch on campus, whereas outside establishments had previously been acceptable; only a club’s president, financial officer or treasurer are allowed to withdraw money and must annually submit a form naming its executive officers; and cash withdrawals are limited to $50 per day.

LEAD notified organizations of the changes Dec. 21, said its Managing Director Sarah Bauer in an email conversation in which she refused an in-person interview.

However, to what extent these new policies will safeguard students and their organizations is still in question, as well as to what degree the previous lack of regulations allowed for misuse during the alleged timeline of criminal activity.

A comparison with other universities in the California State University System, however, highlights differences between SF State and its fellow institutions.

For example, even though LEAD implemented an obligation to bank with an on-campus establishment, many of its CSU counterparts already had such regulations in place, including Sacramento State University and California Polytechnic State UniversityPomona.

“You can put safeguards in place, because people can make bad decisions,” said Alysson Satterlund, the director of Student Organizations and Leadership at Sacramento State University, while touching on another difference between her campus and SF State. “Most transactions are done on a reimbursement basis.”

The University’s Associated Student’s Inc., however, does something similar.

Anytime student organizations need money for anything from fundraising costs to a pledge event ASI can provide funding. However, the organizations must submit an expenditure proposal and invoices of any transaction that occurs with an outside company; ASI then disburses checks to that company.

“When we submit money to (clubs), they have to submit proposals for the money,” said ASI Executive Director Peter Koo. “The purchase order is sent to us and we’ll send the checks based on the invoice.”

Unfortunately, ASI does not oversee funds that clubs raise independently. That is where LEAD comes in.

The Haley case

When 24-year-old Haley arrived at the San Francisco Superior Court for her arraignment Sept. 17, she initially pled not guilty to the charges against her.

Despite no prior criminal history and being only 23 years old at the time of the alleged embezzlement, the Oakland resident appeared ready to go to trial.

The likelihood of a trial has since waned.

With Haley’s public defender Sujung Kim and Sanaz Nikaein, a special district attorney for cases involving high amounts of money, in constant communication, it appears probable that Haley will settle.

She could switch her plea as early as her next appearance in Superior Court Feb. 15.

“More likely than not, this will not go to trial,” Nikaein said following a prehearing conference Jan. 19. “The defendant has admitted guilt and wants to resolve this matter.”

As this case heads into what could be its stretch run, some resolutions may present themselves.

With her previously clean history and now-active participation in community service and the Women’s Reentry Center – a San Francisco Sherriff’s Departmentprogram to assist women in leading a safe and healthy lifestyle – Haley will most likely not go to prison, according to Kim, but she will make full restitution to the cheer squad.

Unfortunately for the cheer squad and the members of APO, the responsibility of LEAD to prevent the situation will probably not be one of the resolutions.

Court documents allege that, among other things, the cheer squad needed money to attend a cheer camp in Southern California and that the cheer members gave money directly to Haley.

In a Sept. 29, article by [X]press, it was reported that a disgruntled teen complained to the team’s adviser Larry Birello that they were allowed to attend the camp, but it was not paid for.

During this time, LEAD had no means of auditing Haley’s actions.

“Student organization leaders and members make decisions about how organization funds are spent,” Bauer said. “LEAD staff do not approve how funds are spent.”
Yet, many CSUs do have oversight of organizations, even if the money is raised independent from the school.

Also, many CSUs require multiple signatures or the consent of an adviser to withdraw money, including not only Sacramento State University and Cal Poly Pomona, but also Cal State Fullerton and the California Maritime Academy.

“All three, president, treasurer, adviser, must sign to withdraw money to ensure continuity,” said Juanita Razo, CSUF associate dean of students for leadership and multicultural development programs.

However, officials within LEAD believe their new policies will benefit students.

“The biggest difference to combat what organizations have been dealing with is to limit the access to cash to $50 per day,” Greenwell said.

Even though the president, treasurer or adviser can still unilaterally withdraw money, the limit on cash withdrawals, according to Greenwell, will stem the ability to commit large-scale embezzlement.

Still, preventing the flaws at the heart of the Haley case is much clearer considering the cheer squad is under the sole jurisdiction of the University. However, SF State must be careful not to cross organizations’ legally guaranteed threshold of autonomy. Plus, issues involving fraternities, which fall under dual jurisdiction, are not nearly as discernable.

Club autonomy, secrecy

With the investigation into APO’s Mu Zeta chapter still ongoing, those involved in the case have maintained silence.

When approached during a tabling event in front of the Cesar Chavez Student Center Jan. 24, members of APO refused comment, and UPD, as is its policy, referred all inquiries to Griffin’s office, who at the time this article was published had not responded, but nonetheless, adding confusion to the investigation is APOs status as a national fraternity.

It is required that nationally recognized fraternities be allowed to bank at separate institutions in order to manage the large revenue that is necessary to balance the cost of off-campus housing and other expenses.

The University has no authority over these accounts.

It is uncertain if the Mu Zeta chapter had its own account, but nonetheless, it was in charge of its own finances.

“What they do is determined locally,” said Bob London, the executive director for APO’s National Service Fraternity. “They have separate employee ID numbers with the IRS. They have to file their own (tax forms) and they are their own entity in terms of finances.”

According to London, he was unable to comment on the status of the investigation, because Mu Zeta’s direct supervisorial divisions, Section Four and Region 10, had not updated him on the case. London noted that both the section chair and regional director were assisting UPD in the case.

However, when contacted for comment, Section Four Chair Kevin Lowe referred questions about the case to Region 10 Director Craig Tanner, Tanner consulted with his risk management team and responded that London was the fraternity’s official spokesman and the only person authorized to speak on the matter.

This makes it unlikely that any details of this case will appear before official charges are filed, which is not guaranteed. So, it is not yet possible to define LEAD’s role in allowing any misuse of funds to occur.

Also, the amount of regulatory power LEAD is allowed by law is not concrete.

While universities have a right to protect students, they may not impede the rights of student organizations, according to Chico State University’s director of student activities Rick Rees.

Rees’s university has policies in place that reflect SF State’s old and new practices, such as allowing off-campus banking for all organizations and withdrawal without adviser approval – the one caveat being withdrawals of more than $200.

Chico State has no other option, he said.

“It is even legally required,” Rees said. “You can’t abridge those rights.”

Rees was alluding to the 1972 U.S. Supreme Court decision in Healy v. James, which stated organizations on campus have equal free speech protection under the law, in collaboration with other court cases that affirm the use of money as free speech.

“That kind of crime is out there on campuses,” Rees said in reference to the Haley and APO cases. “But I think what we’re doing makes sense.”

That echoes LEAD’s current position on the issue.

LEAD’s policy changes, regardless of their efficacy, were a result of the APO investigation and the charges against Haley, as well as a need to balance oversight with an organization’s autonomy.

“We try to put things in place, so the hope is to make the process better,” Greenwell said. “We’re not going to be governing the organizations.”

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