Conversation: Corrigan and Sprague Talk Executive Spending

On November 6, The Stanford Review published “Execs Spent $13,000 on Food, Gas” by Tom Corrigan ’11, revealing that former ASSU Executives Hershey Avula and Mondaire Jones (2007-08) spent $13,000 out of ASSU executive discretionary funds for 300 relatively small monetary amounts for food and gas.  Despite the story occurring almost two years ago, the Review was the first to go through the financial records and put the story together.

In response to Corrigan’s piece, the *Review *columnist and former director of Stanford Student Enterprises (SSE) Capital Group, Matt Sprague ’10, wrote “The $13,000 Question,” discussing the implications of Avula and Jones’s actions and where the ASSU goes from here.

On November 10, the CEO of SSE and the ASSU Financial Manager, Matt McLaughlin, published an op-ed in The Stanford Daily, “Op-Ed: Executive Expenditures, the ASSU, and Fiscal Responsibility,” detailing SSE and the ASSU’s response, including committing to publicize all ASSU political expenditures and to discuss ethical rules for discretionary funds.  In addition, McLaughlin also criticized the Review‘s work, writing, “The Review may actually have come to providing the extra level of evidence we lacked so many months ago, but at the time of this writing, even the Review seems to have tiptoed around this issue carefully in the advanced copy provided to me.”

In a new feature, Fiat Lux follows the model of “The Conversation” in The New York Times, bringing two writers together, Corrigan and Sprague, to talk across their articles.  Below, see Corrigan and Sprague discuss what it was like putting the investigative news story together, what appropriate solutions are, and its implications.  The conversation serves to further the campus discussion by offering insights from two people who took an active role in the original story.

**Tom Corrigan****: **Matt, one of the greatest functions of journalism is its ability to raise awareness and, most importantly, motivate change. Journalism, particularly investigative journalism, has a unique capacity in our society to provide information that leads to legal and societal change.  Though, in choosing whether or not to report a story, ethical judgments are necessarily made, the primary purpose of an investigative piece is not to make judgments.  Rather, the primary purposes are to facilitate the correction of a presumed wrong and ensure that wrong never again occurs.

Journalists must have a loyalty to the community they serve.  As the reporter conducting the investigative work behind the recent article exposing the spending habits of former executives Hershey Avula and Mondaire Jones, I had absolutely no interest in seeing any heads roll.  In writing the article, I was primarily concerned with ensuring that the community became aware of the facts surrounding the former executives’ spending and raising questions about possible unethical actions and about the lax accountability of funds at Stanford.

Retrieving and sifting through the financial records that led to this report were not easy tasks.  Though all ASSU financial records are public information, it is a non-trivial task to acquire them, which is one reason why publicly available records would be such an improvement.  Once these records were in my hands, making sense of the many pages of financial material proved to be a complicated endeavor.

Finding sources familiar with the former executives’ spending habits that were willing to have their names mentioned in the article also proved difficult.  Ultimately, though the testimony that appeared in the Review’s article appeared without a name to support it, the accusations were strong enough to initiate questions of financial policy and questions concerning the ethical nature the executives’ spending.

Now that the facts are out, now that questions have been raised by the community, it is time for those familiar with the events of this article to come forward and explain, on record, whether or not legal and ethical lines were crossed.  It is time to finally resolve this situation and ensure that such a thing won’t ever again occur.

Personally, I find the very existence of an executive credit card to be quite disturbing and a prime candidate for change.  Matt, as former director of Capital Group and someone familiar with financial management at Stanford, what specific changes do you think can and should be made?

Matt Sprague: Tom, I’d really like to see some positive steps be taken by the ASSU to ensure this doesn’t happen again. Institutional memory has never been one of the ASSU’s strengths, and what worries me is that the lessons learned from this debacle will be forgotten in ASSU generations 5, 10, and 15 years down the road.

I hope that the active information release policy that ASSU Financial Manager Matt McLaughlin alluded to in his November 10 response in the *Daily *becomes institutionalized through an amendment to the ASSU constitution requiring political bodies to publish financial records quarterly, and I second his call for “ethical rules surrounding discretionary funds.”

I understand the flexibility that discretionary funds provide to the Executive, and for this reason I think a budget that leaves those funds’ discretion mostly in place is required. What I propose is that a small portion of the ASSU Executive Discretionary Account be allocated explicitly for ASSU-related discretionary expenses, such as cabinet meeting food; the remaining discretionary funds would be used *only *for the programs and events that the ASSU Executive decides to pursue that have an impact on the greater student body (not a limited cabal of friends or ASSU insiders).

This differs from the current system, where the breakdown of discretionary fund expenditures has historically been left to the judgment of the Executives in charge. The proposed system would allow the Executive the flexibility to engage in meaningful endeavors, while limiting the extent to which fiscal malfeasance can occur (i.e. no more $13,000 mistakes). Furthermore, readers should note that budget allocations are not fixed in stone, and could be changed (with the approval of the GSC and Senate), should the above system require adjustment.

I’ll conclude with an appeal to our legislators in the ASSU Undergraduate Senate and Graduate Student Council to take substantive steps, and secure the responsibility and future of ASSU discretionary funding in the generations to come. As you mentioned, Tom, this has been a tremendous opportunity to raise awareness and by doing so serve the Stanford community.

Tom Corrigan: Matt, I completely agree.  I would, however, like to expand the nature of our conversation.  In an era in which the words “executive greed” primarily bring to mind Wall Street executives such as Bernie Madoff, these recent findings concerning Avula/Jones broaden the lens through which we can look at the depraved spending of others’ money.  Given what we know about the former executives’ spending, I believe it’s fair to ask what, if anything, pushes those in positions of public trust toward seemingly unethical behavior.

Because what was uncovered here at Stanford clearly echoes larger, national issues of the recent past, by thinking the Avula/Jones case, we can attempt to serve a much larger community than that of Stanford.  It’s not just Avula/Jones; it’s Madoff, corruption in Congress, corruption in both small towns and cities across America (let’s look at Chicago…), etc, etc.  We can and should take our relatively small-scale story and develop it into a serious look at fiduciary malfeasance on a larger scale and why we see it occur so often.

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