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CSU Administrators Spend Hundreds Of Thousands In Donated Money On Parties, Alcohol

LOS ANGELES ( — The financial burden on most young adults who pursue a college education through the California State University system is no secret.

Every year, Cal State students struggle to pay the thousands of dollars owed in tuition, loans and increased fees.

Meanwhile, the discovery of how CSU administrators are spending large amounts of donated money, meant to benefit the universities, is shocking.

CBS2 investigative reporter David Goldsten found hundreds of thousands of dollars, donated with the intention of supporting students' educations and benefiting the schools, yet being spent by administrators on amusements.

Fancy parties, alcohol, $7,000 season tickets to the Hollywood Bowl, and top LA restaurants are a number of things this donated money is paying for.

The money comes in from private donations, including alumni, and is funneled through non-profit foundations, located on every Cal State campus.

After examining the tax returns, millions of dollars were found in contributions and grants.

While some of this money did go to student aid, thousands of pages of receipts revealed plenty of surprising charges.

At Cal State Los Angeles, a $3,000 American Express gift card was discovered, which was a retirement gift for Cal State Fullerton President Milton Gordon. Gift cards for additional retirees totaled more than $9,000.

Also found was a $5,100 membership to the exclusive City Club on Bunker Hill, as well as thousands of dollars that went towards meals at expensive restaurants, all charged by former Cal State LA President Dr. James Rosser, who is now retired.

Students, when told of the manner in which the donated money is being spent, were clearly disappointed.

"I think it's extremely sad, because this is a low-income university," one student said. "A lot of students that come here come from low income families and low-income communities."

Other schools in the Cal State system were likewise involved.

At Cal State Northridge, checks were discovered, adding up to nearly $15,000 for an interior designer, who worked on the president's on-campus housing. An addition $17,000 was spent for the kitchen appliances.

At Cal State San Bernardino, thousands of dollars seem to have gone towards meals, as well as drinks, along with a membership to the exclusive Arrowhead Country Club.

Tens of thousands of dollars were spent on catered receptions at the home of Cal Poly Pomona President Michael Ortiz. This was spent in the name of fundraising, as donor money instead went towards receptions with premium bars and bottles bought at Costco for Ortiz to use at receptions and dinners.

Ortiz, meanwhile, defends the spending, stating that the events are a way to raise money to supplement statewide budget cuts. However, he admits that donor money can be used much more leniently than taxpayer money.

"We would not spend state money on the same things we spend foundation money on," Ortiz said. "In other words, we wouldn't have an event which required us — not require — but allowed us to serve alcohol and other things. That would not be something that we'd use state money for."

CSU Chancellor Timothy White, who heads all the universities, also chimed in, stating that the parties are not all meant for fun.

"It's hard work," White said. "It's hard work to build relationships over time."

White says it is necessary to 'wine-and-dine' wealthy donors.

"I think people expect the normal hospitality," White said. "I mean, those people that are wealthy live in a life style of comfortable living."

Ethics expert Bob Stern says that schools should use more restraint when spending donated money.

"Donors to universities should give because they're giving to a university. They shouldn't be giving because they're wined and dined," Stern said. "I think they should be using it as if it were tax money. I don't think they should be saying 'Okay, well, because this is all private money that's coming in, we can spend it as we choose'."

The universities say that the trustees watch over the spending, and maintain that all of it is absolutely necessary.

The students will never feel the same way.

"I feel cheated, you know? It's really unfair."

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