CA: Low-rate loans for UC's elite on homes - Some less than 2 percent -- system won't divulge names

SFGate.com ^ | 7/13/06 | Todd Wallack

[NormsRevenge]

The University of California has issued thousands of low-interest home loans to executives, faculty members and other selected employees but has refused to reveal who received the money.

That includes an unidentified UC Berkeley professor who received a $250,000 home loan at one-half of 1 percent interest a year -- far less interest than any bank would demand. ...

--snip--

The university provided data showing there are nearly 2,000 active loans totaling $702 million but cited employee confidentiality in refusing to identify the recipients. In dozens of cases, UC wouldn't even reveal the titles of people who received the loans. One unnamed UCLA professor received as much as $1.5 million.

Critics said UC's refusal to release the information contradicts promises by UC President Robert Dynes, Board of Regents' Chairman Gerald Parsky and other top university officials who assured lawmakers that the 10-campus system would be more open about financial dealings with staff members.

"It's the arrogance of the UC system," said Sen. Gloria Romero, a Los Angeles Democrat and member of the state Senate Education Committee.

--snip--

UC spokesman Paul Schwartz said it would be an "unwarranted invasion of personal privacy" to release the names of every recipient of a UC home loan. --snip--

Some of the loans have proved to be controversial.

As previously reported, UC promised low-interest loans to two of President Robert Dynes' aides, including his executive assistant, when they followed Dynes from his job as chancellor of UC San Diego to the UC president's office in Oakland three years ago, even though they wouldn't usually qualify for such loans. Under UC guidelines, the home loan perk is usually reserved for professors and top executives. But UC officials said they made exceptions for the aides.

[stuck_in_new_orleans]

UC spokesman Paul Schwartz said it would be an "unwarranted invasion of personal privacy" to release the names of every recipient of a UC home loan.

shouldnt the NYTimes be doing a indepth investigation on this ....I mean....isnt it fair game and newsworthy?

/sarc

[gaijin]

"Yeah, man! Down with the establishment..! And give that lez $50,000 for a dog-run..! And give her carpet-munching mate $200,000 to do nothing every year! And 1/4 MILLION for yearly LANDSCAPING..!"

And give TA's MINIMUM WAGE for actually WORKING!

Yeah, we've REVOLUTIONAIRIES, MAN..!

[AEMILIUS PAULUS]

The fraud inherent in the privacy concept strikes again. They are public employees. Based upon years of experience every time some one raises-with chest tones of deep conviction-the issue of their privacy it is for the purpose of concealing misbehavior of some sort.

[Reddy]

Unbelievable. Since most of the elite educational establishment is liberal, this means the state is virtually paving the way for these radicals to prosper. (They not only get a cheap home to live in, but the homosexual partners get health benefits.)

No wonder they are pro-socialism. They're at the top of the heap.

[jpthomas]

I hope the recipients of these loans are aware of the potential tax consequences. Depending on the details of the terms of the loan, the employer is treated as if it paid additional compensation to the employee in the amount of the difference between the actual rate of interest and something called the applicable federal rate (AFR). The AFR is a kind of "market" interest rate computed using average yields of U. S. Treasury Obligations. This additional compensation income is deductible by the employer and is taxable to the executive.

[stuck_in_new_orleans]

maybe we will get lucky and the teachers unions across the state will go on strike or at least make some noise about how they too arent getting these special perks

[centurion316]

You stupid peasants. We are the elite and we will do as we please. You are expected to pay the taxes and keep your mouths shut. Who do you think you are? We are entitled to special treatment and we demand that we receive it. Now, shut up and get back to work.

[VeniVidiVici]

Ok. Let me see if I can ask this question correctly; If I get a $100K loan at 1% interest, and the going rate for loans of this sort is 8%, doesn't the IRS consider that spread, the difference, income to me?

Or what am I thinking of? :-)

[VeniVidiVici]

Depending on the details of the terms of the loan, the employer is treated as if it paid additional compensation to the employee in the amount of the difference between the actual rate of interest and something called the applicable federal rate (AFR).

Thanks for answering my question while I was typing! No wonder they don't want to disclose the names. Someone should file under the CA Sunshine statute, if one exists, find out the names and then call the IRS. Could be a pretty hefty reward ;-)

[Wristpin]

On a fancy liberal California spread that interest difference must be at least $1000 a month!

[Rockingham]

As the article notes, the data can be extracted from local property records. Surely there is a watchdog group willing to do that, or is the task up to us yet again?

[razorback-bert]

Please tell me again, that there are no elite.