Monday, July 14, 2008

UCLA and UC Irvine Consider Removing Donor's Name From Campus Buildings After Guilty Plea

The L.A. Times reports that UCLA and UC Irvine are considering whether to remove the name of a wealthy donor from their buildings after the donor's guilty plea to federal charges: 

The [Henry] Samueli name could be stripped from engineering schools at UCLA and UC Irvine as a result of his recent guilty plea to a felony charge of lying to financial regulators. A review of the issue is being launched by the University of California's general counsel, officials said.  The two engineering schools were named for Samueli after the Broadcom Corp. co-founder and his wife donated a total of $50 million to those programs in 1999. Samueli, who earned his doctorate in electrical engineering at UCLA and is a professor there, is widely admired for his pioneering work in telecommunications microchip technology and his extensive philanthropy.  But his guilty plea last month to making a false statement to federal authorities investigating the alleged backdating of stock options awarded to employees at Irvine-based Broadcom has triggered a review of the name of each school, UC spokesman Brad Hayward said. UC policy on such matters is vague, and questions of timing and what factors should be considered have yet to be determined.  "Quite honestly, this is new territory for us, so we don't have answers to a lot of specific questions at this point," Hayward said. He said he and other UC officials could not recall a case in which a donor's name was removed from a building or program at the university because of a crime.

Counsel for the two schools should take a look at Professor John K. Eason's excellent article, Private Motive and Perpetual Conditions in Charitable Naming Gifts: When Good Names Go Bad, 38 U.C. Davis L. Rev. 375 (2005).  Here is the on-point abstract:

This Article explores the problems that often result from a charitable naming opportunity contribution. A charitable naming opportunity contribution exists when a donor transfers money or property to a charitable organization upon terms that result in an individual's name being associated in some way with the organization, its institutions, activities, or facilities. Implementing such arrangements can become problematic as circumstances change over time. Matters considered here include the meaning of "charity" as affected by a donor's personal desire to perpetuate a name. This Article also highlights the quite varied doctrinal analyses that may apply when deviation from the precise terms of a charitable naming arrangement is suggested. The enduring nature of naming agreements, imprecise donor-charity dealings, malleable equitable doctrines, and the vagaries facilitated through reverence to donor intent are shown to contribute to this variability. Specific examples are employed to demonstrate relevant points. Those examples include the well-publicized, but as yet unresolved, charitable naming dispute over the Lincoln Center's Avery Fisher Hall. Also considered is the modern spate of philanthropically inclined, but ethically challenged, "bad actors" whose notorious names now adorn various charitable facilities and institutions across the nation. This Article ultimately presents suggestions for dealing with both existing and future charitable naming arrangements where some deviation from the original charitable naming scheme is suggested.

How to avoid the legal issue?  One way is to insert a clause in the gift document allowing the university to remove the donor's name upon the happening of certain bad events.  But from my days as university counsel, I can surmise how sensitive it might be to ask a donor to agree to such a clause allowing the university to remove the name if the donor violated some sort of moral turpitude provision.  Just asking for the concession could cause the donor to forego the gift out of indignation. 


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