Attorney General auditing SSU loans to Carinalli

  • Sonoma State University President Dr. Ruben Arminana, Wednesday July 29, 2009. (Kent Porter / Press Democrat) 2009

The state Attorney General is conducting an audit of the Sonoma State University Academic Foundation and its loans to former board member Clem Carinalli.

SSU President Ruben Armi?na, who serves as chairman of the foundation, disclosed the audit in an e-mail sent late Friday to faculty and staff.

?We have supplied the Attorney General with all documentation requested and will continue to be responsive to the Attorney General?s requests,? according to the e-mail, which was sent by Armi?na and three other members of the foundation?s executive committee.

Armi?na and other university officials with direct knowledge of the loans again refused to answer questions on Monday. They have declined requests for interviews made over the last two weeks following a surprise disclosure in Carinalli?s bankruptcy proceedings that disputed previous claims by the administration.

The SSU foundation could be forced to return a $232,500 payment from Carinalli under a provision of bankruptcy law intended to protect one creditor from receiving preferential treatment over another.

The Attorney General notified the foundation of the audit on Oct. 16, following months of criticism from SSU faculty and local politicians regarding more than $20 million in private loans made by the foundation to local land owners.

Carinalli received at least $9.6 million in loans from the foundation, the first coming in 1995 two days after he resigned from its board of directors. The Attorney General specifically requested financial documents involving Carinalli, according to the university.

The president of the California Faculty Association, which represents 23,000 faculty statewide, including 500 at Sonoma State University, requested the investigation in a letter sent July 6 to Attorney General Edmund Brown.

?We sent it because we were concerned,? said Alice Sunshine, a spokeswoman for the association. ?There are things going on there that raised a lot of questions.?

The attorney general?s office conducts audits of nonprofits ?to detect cases in which directors and trustees have mismanaged, defrauded, or wrongfully diverted funds from the charity,? according to its Web site. If the attorney general?s office determines that the foundation board members acted inappropriately, it could sue them to recoup the money.

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