Concluding Thoughts

The Sierra College Foundation could legally operate as an intermediary organization funding the bond measures as defined in the FPPC Information Manual D, as advised by Gilbert & Associates, Government Financial Strategies Inc., Dr. Larry Toy (President/CEO Foundation for California Community Colleges) and without objection from the College District’s legal counsel, Marion Cantor.

The Foundation had no intent to suppress donor names as evidenced by its willingness to supply accounting records, the display of donor names on its websites, donor list notifications to the bond measure Committees, and supported by the testimony of all donors surveyed.

Filing errors for Measures E, G, and H were made due to inexperience, inattention to detail and confusing underlying documentation. a. The donors’ names should have been itemized in an FPPC filing by the Foundation as an Intermediary. b. The Committee Treasurers failed to notify the Foundation of its FPPC filing requirements due to their inexperience and lack of formal training in FPPC filing requirements. c. The omission of FPPC filing of itemized donor names was inadvertent and unintentional.

The FPPC filing errors were relatively minor and easily correctable. The Committees promptly made amended filings to correctly disclose donor names when the errors were found.

The former President was far removed from the detailed process of making filings and there is no evidence that he had knowledge of them.

Complainant failed to exercise due diligence before taking the serious step of making charges, and as a result, the complaint was inconsistent with the facts. The charges are unfounded, misleading and full of unsubstantiated allegation. The charges are utterly without merit.

has no legally required respondent, but the Grand Jury hopes that the press and the public will take note of it. This page intentionally left blank. APPENDIX 1: THE COMPLAINT A,tnox I(IEIN Siera College Trustee - l i i : . i I December 20,2004 Mr. Jirn McCauley Placet County Clerk/Recorder PO Box 5278 Aubutn, Cabfornta 9 560 4 Dear Jrm, i ' : r i ' i i ; , r i . r , . i _ , t - . t - , t l i-l i r1.i' l'i r t,; Thrs letter constitutes an official complaint tegardrng what appears to be over $100,000 in potential violations of campaign finance law on the pat of the Ptesident and Superintendent of the Sierra Joint Community College District, I{evin Ramirez. The televant facts ate ^s follows. I(evin Ramirez is the President and Supenntendent of the Sierra Joint Community College District. As President, he has supervision and management control over the college and its related entities. Ramirez is the one rndividual who has contact with the college vendors who made the donations in question, who serves as a member of the Sierra College Foundauon Board of Ditectors, who supervises the Sierra College Foundation Executive Director and who is ultimately tesponsible fot all management decisions made by the Foundation. As a result, I(evin Ramirez is at the centef of these allegations, and either conceived of and authorized this scheme, or should have known and reported it to the Board of Trustees and the appropriate authorities rmmedrately In March of 2004, a bond election was held withrn the counties of Placer, Nevada, Sactamento and El Dorado for the purpose of determining whether the Sierra Joint Community College District should be authorized to float $394 mrllion in bonds for the tenovation, repair and expansion of Sierra College facilities. This measule was placed on the ballot as Measure E. Campaign frnance reports filed by the committee show a $60,000 contribution from the Sierra College Foundation, which is a nonprofit foundation organized and operated fot the purpose of supporung Sierra Community College. As the attached evidence shows, donors were solicited to support the Measure E bond electton through a donation to the Sierra College Foundation, and the Foundation tllen eatmarked those funds and contributed them to the bond measure political comrnittee at a later date. Tlus money laundering scheme allowed the administration to hide the true identities of donors to the bond campaign's politrcal committee. The funds received from these solicitations were deposited in accounts operated by the Foundation. There were no frhngs with the appropriate authoritres in Placer Counf/, Nevada County, El Dorado County, Sacramento County or the Secretary of State to disclose these donations or report the balances of these accounts, as required by the Political Refotm Act and its implementrng tegulauons. 4055 GMSS VALLEY HrcHwAy, SUrTE 104 AUBURN, CaltFonNn 95602 530-346-8175 rax 530-886-0710 Not prepared or nailed at taxpaJer exPewe 't. 2. -). 4. 5. t. There was no consultation with or approval by the Board of Ttustees in regards to this scheme (although two trustees did serve on the Foundation board at the time, and continue to sewe). These funds were earmarked in a "special fund" for the Measure E bond campaign that was aggregated and then donated to the Measure E political committee shortly before the funds were needed for theu expenditure. The Foundatron neither added to or subttacted from these funds: the Foundauon was srmply used as a "pass-through" to funnel the dollars to the politrcal committee. Thus, the true donors to the Yes on Measure E committee wete never properly drsclosed to the public as tequired by the Political Reform Act and its implementing regulations. By makrng donad.ons to the foundation instead of the committee, theit identities wete never drsclosed because only the name of the Siera College Foundation appears on the campaign finance repofts relating to this $60,000 contribution. I want to emphasize that I do not believe that the donors themselves played any role in the conception or execution of thrs scheme. In fact, many of. the donors turned out to be indrviduals or companies whose only interest was the broad betterment of the community. Howevet, a number of the donots did rnclude enhties with a financial interest in the outcome of the election, including several ftms who have ongoing conftactual relationships with the college in the areas of construction, architectutal sewices, food service/vending and finance. These ftms would stand to gteady increase their business with the college upon passage of the measures. Further, the Board of Trustees relies on Ptesident I(evin Ramrrez to recommend which hrms the college should grant contracts to, giving these fums an additional reason to provide the financial support to the bond measures as requested by him or his designee. Whether the donor had a financial interest or not, President Ramirez or his subordinate was clearly wrong to conceive of and execute a scheme that deprived the public of the dght to know who was mfluencrng the potential passage of the measure prior to the election. 13. There is some case to be made that the Foundation, a 501(h) otgatizztton, can legally make contributions to ballot measure committees, without losrng its tax exempt status. However, this does flot exempt the Foundation ftom the provisions of the Political Reform Act and its rmplementing regulations, forbidding it to accept poliucal donations without the proper filing disclosures. 14. The SieraJornt Community Coliege District funds the entire salary of the President Ramirez, and partially funds the salary of the Foundation Executive Djrector. Therefore, if President Ramrez spent taxpayer-funded time conceiving of, authorizing or parucipatirg ir this scheme, or if he instructed the Executive Director to c^try out this scheme, those activities would constitute a felony or misdemeanor under Education Code $ 7054, which provides: (a) No school district or community college district funds, services, supplies, or equipment shall be used for the putpose of urging the support or defeat of any ballot measure or candidate, including, but not limited to, any candidate for election to the governing board of the disttict. (b) Nothing in this section shall prohibit the use of any of the pubhc resources described in subdivision (a) to provide information to the public about the possible effects of any bond issue or other ballot measure if both of the following conditions are met: 10. 11,. 12. 1 5 . 1,6. (1) The informational activities are otherwise authorized by the Constitution or laws of this state. (2) Ihe info-rmation provided constitutes a fa'. and,impartial presentation of relevant facts to aid the electorate in reaching an inftrmedl"dgr";, regardrng the bond issue or ballot measure. (c) A violauon of this section shall be a misdemeanor or felony punishable by imprisonment in the counry jarl not exceeding.on e year or by " fir" not exceiding one thousand dollars ($1,000)' or by both, ot it rpiirorr-ent in a state pflson for 1,6 months, or fwo or three years. The actions described above were repeated for the two additjonal bond measures proposed for the November 2004 election. Me.asure-G was proposed to provide funding for the renovation, repair and expansion of Sierta college facilities in Grass valley, califorrua. c"-purgr finance r.poro frl.d b;i;" Measure G committee show a $16,000 contribution from the Foundation, as well as a $10,000 contribution from excess funds left over from the Measure E committee. Measure ! -1t proposed to ptovide funding for the construction of new Sierra college facilities rn Truckee, califotnia' As of this- writing, the Nevada counry clerk-Recorder,s office has still been unable or unwilling to.forward a copy of campaign fin^n.. reports fi.led by the Measure H committee, but we estimate that ovet $28,000 was conftibuted by the Fo.rrrdutro., based on the evidence received from the Foundauon. 1 7 . 1 8 .In order to attempt to address the concerns over thrs activity, the Foundation provided electronic -copies of its spteadsheets that were used to record the donations solicited and earmarked for the eventual transfer to their appropriate bond measure committees. printed copies of those spreadsheets are attached. 19' The spreadsheet detaihng Measu.te E donors includes a notation that the donatrons at rssue are classified for a "0724A Special Fund", separate ftom the *1l24Annual Fund,,. 20' The spreadsheet detailing Measute G and H donors is even more explicit, stating line-by-line which ballot measure the donation is earmarked for. There is $16,400 earmatked for Measure G, and $28,560 earmarked for Measure H. I am seeking a fotmal investigauon by the appropriate rnvesugatory and law enforcement agencies of these campaign finance issues. If I can provide any additional information, please do not hesitate to call me at 530-gg5-95 00 x215. Srncerelv. t l -ffiV- Aaron I(lein Trustee, Sierra Joint Commurury College District 40 APPENDIX 2: REFERENCE DOCUMENTS APPENDIX 2: REFERENCE DOCUMENTS Item # Date of Origin or Receipt Category Source Title or Comments 1 12/20/04 Grand Jury Complaint Complainant Complaint alleging criminal charges against SC President Dr. Kevin Ramirez 2 12/23/04 Letter Clerk-Recorder's Office 4 Letters: forwarding same complaint to FPPC, Grand Jury, State Attorney General, and Placer County District Attorney 3 12/27/04 Letter FPPC Acknowledgement of complaint receipt 4 1/24/05 Letter Clerk-Recorder's Office Letter to SCFoundation advising of possible obligation to file 5 1/7/05 Grand Jury Complaint California Grand Jury Association Citizen complaint regarding Sierra College Foundation 6 2/4/05 Letter Clerk-Recorder's Office 3 Letters: to Placer County District Attorney, Grand Jury and FPPC w/enclosures of Measure G filings from Nevada County w/attachments of Foundation's accounting for bond measure donors 7 3/7/05 Letter Foundation President Response to Recorder's office outlining results of legal advice and filing violations being "technical and inadvertent" 8 9/22/05 Grand Jury Complaint Former Grand Jury Member Citizen complaint regarding Sierra College Foundation 9 12/8/05 Meeting notes Clerk-Recorder's Office Meeting 10 .12/15/05 Testimony notes Foundation Exec Director Testimony 11 12/18/05 Working Paper Grand Jury "Analysis of the Klein Complaint" 12 1/11/06 Testimony notes Former Foundation Board President Testimony 13 1/12/06 Testimony notes Current Foundation Board Presdent Testimony 14 1/12/06 Testimony notes Sierra College Interim President Testimony 15 Working Paper Sierra College Interim President Graph, FTES (full time equivalent student) decline 12/04-2/05 16 1/17/06 Testimony notes Former Treasurer, Committee for Measure E Testimony 17 1/18/06 Testimony notes Sierra College VP Finance & Admin Testimony 18 1/23/06 Testimony notes Sierra College Board Member 1 Testimony 19 1/24/06 Testimony notes Sierra College Board Member 2 Testimony 20 2/1/06 Testimony notes Former Treasurer, Committee for Measure H Testimony 21 2/13/06 Packet Former Treasurer, Committee for Measure H Measure H Campaign documents (e-mails, FPPC instructions, letter from Sec'y of State, letter from Streamline Consulting Group, copies of receipts) 22 2/8/06 Testimony notes Complainant Testimony 23 2/8/06 Working Paper Complainant Complainant's "Grand Jury Outline" 24 2/8/06 FPPC Complainant FPPC No.: 04/593 Stipulation, Decision and Order in the Matter of Foothilld-De Anza Community Colleges Foundation 25 2/8/06 Letter Complainant Correspondence between Foundation and a significant business donor to all 3 bond measures 26 2/18/06 Testimony notes Notes from Foundation business donor interviews Testimony 27 2/20/06 Testimony notes Former Sierra College Director of Business Services Testimony 28 2/27/06 Testimony notes Treasurer, Committee for Measure B Testimony (Complainant's source for "is this legal?") 29 2/27/06 Testimony notes Former Sierra College Board Member Testimony (party to Complainant's alleged bathroom conversation) 30 3/6/06 Testimony notes Sierra College Board President Testimony (Complainant's advisor) 31 12/15/05 Bond Measures Clerk-Recorder's Office Measure E: Proposal to issue bonds for Sierra Joint Community College District 32 3/2/04 Internet League of Women Voters Measure E Description 33 12/15/05 Bond Measures Clerk-Recorder's Office Measure H: Proposal to issue bonds for Sierra Joint Community College School Facilities Improvement District Number 1 34 12/8/05 FPPC Clerk-Recorder's Office Election Filing Reports: Copies of all campaign filings for Measures E, G, and H 35 12/8/05 FPPC Clerk-Recorder's Office Election Results: Local Measures G and H 36 12/31/94 FPPC Fair Political Practices Commission Information Manual D: Manual for recipient committees formed to support or oppose the passage of ballot measures 37 2/15/06 FPPC Fair Political Practices Commission 2004 Addendum: Supplement to Manual D 38 1/1/05 FPPC Fair Political Practices Commission 2005 Addendum: Supplement to Manual D 39 11/15/05 Internet County Counsel Education Code 7050-7058 40 11/28/05 Internet Education Code Section 72670 - 72682 Code governing formation of auxiliary organizations by community colleges APPENDIX 2: REFERENCE DOCUMENTS Item # Date of Origin or Receipt Category Source Title or Comments 41 10/15/02 Working Paper Financial Strategies Inc. Memo: "Relationship of Sierra College Foundation to Expanding Horizons for Lifelong Learning 42 6/26/02 e-mail Larry Toy, President, Foundation for California Community Colleges Statewide/Local Bond Campaign Contributions Through Your Foundation 43 5/10/02 Working Paper Gilbert Associates, Inc. CPAs and Advisors Memo: Allowable Financial Support from the Foundation for Proposed Sierra Junior College Bond Measure 44 7/8/02 Internet Online Compendium of Federal and State Regulations for U.S. Non-Profit Organizations Lobbying and Political Activity by Tax-Exempt Organizations 45 11/5/03 e-mail Sierra College Rules regarding the bond campaign 46 12/19/02 Letter Gilbert Associates, Inc. CPAs and Advisors Letter to SC VP Business Services re: form and filing for IRS for the Foundation to allow expenditures to influence legislation 47 1/11/05 Formal Meeting Minutes Minutes - Sierra College Board Mtg. Special meeting of the Board with public comments re: Dr. Ramirez 48 7/1/03 Contract Sierra College Contract Extension between Sierra College and Kevin Ramirez 49 1/21/05 Contract Sierra College Settlement Agreement between Sierra College Board and Kevin Ramirez; attachment of Foundation donor accounting 50 1/23/06 Working Paper Sierra College General Fund 10-year History with Ramirez Buyout Expenses Removed 51 1/23/06 Working Paper Sierra College Sierra Community College District Facilities Funding Challenges 52 3/7/08 Formal Meeting Minutes Sierra College Sierra Joint Community College Districts Minutes (Oct 2002 - Dec 2004) 53 12/15/05 Contract Foundation Executive Director Foundation Bylaws 54 12/15/05 Financial Foundation Executive Director Foundation Financial statements, independent auditor's reports and IRS filings (2002-2004) 55 12/15/05 Foundation Board members Foundation Executive Director Foundation's 2002-2003 Board of Directors 56 12/15/05 Foundation Board members Foundation Executive Director Foundation's 2003-2004 Board of Directors 57 12/15/05 Foundation Board members Foundation Executive Director Foundation's 2004-2005 Board of Directors 58 10/13/03 Formal Meeting Minutes Minutes - Foundation Board Mtg. Agenda Item III.C "Foundation Support of March, 04 Bond Measure" 59 1/13/03 Formal Meeting Minutes Minutes - Foundation Board Mtg. Agenda Item IV.B "Election of 501(h) option to the Foundation's 501(c)(3) Status" 60 10/11/04 Agenda Agenda - Foundation Board Mtg. attachment "Transfer of Funds from Special Account in accordance with 501h allowance" 61 10/11/04 Formal Meeting Minutes - Foundation Board Mtg. Agenda Item IV.B "Transfer of Funds to Measures G & H" 62 1/26/04 Formal Meeting Minutes Minutes - Foundation Board Mtg. Agenda Items III.B "Amendment to the Articles of Incorporation" and III.D "Transfer of Funds from Special Account in Accordance with the 501(h) Allowance" 63 1/3/05 e-mail Foundation Executive Director response from ELAC Foundation re: use of 501(h) 64 1/4/05 e-mail Foundation Executive Director response from Merced College Foundation re: use of 501(h) 65 1/4/05 e-mail Foundation Executive Director response from Ventura College Foundation re: use of 501(h) 66 1/4/05 e-mail Foundation Executive Director response from Cabrillo College Foundation re: use of 501(h) 67 3/8/05 e-mail Foundation Executive Director re: memo from SCF President about filings failures 68 1/28/04 e-mail Foundation Executive Director from campaign group for E titled "Campaign Contribution Update" with lengthy list of Foundation contributors 69 9/8/04 - 10/14/04 e-mail Foundation Executive Director series of e-mails form 9/8/04 - 10/14/04 reporting donations to G & H bond measure committees 70 11/17/03 Letter Foundation Executive Director Thank you letters to a major donor from SCF President 71 12/17/03 Letter Foundation Executive Director Thank you letters to a 4 major donors from SCF President 72 10/18/04 Letter Foundation Executive Director Thank you letters to 7 major donors from SCF Executive Director w/receipts attached 73 11/29/04 Letter Foundation Executive Director Thank you letters to 9 major donors from SC President and SCF Executive Director 74 3/7/05 Letter Sierra College Foundation Letter responding to County Clerk-Recorder concerning filing violations 75 7/26/04 Letter TRR (Teresa R. Ryland, C.P.A) To SCF Exec Director re: continued tax-exempt status; outlining that 20% of expenditures could be contributed to the bond measure 76 8/13/05 Marketing Survey Fairbank, Maslin, Maulin & Associates Sierra Joint CCD Marketing Survey (August 13-19, 2005) 77 2/11/05 Newspaper Article Auburn Journal "Award, allegations complicate legacy of Sierra President" APPENDIX 2: REFERENCE DOCUMENTS Item # Date of Origin or Receipt Category Source Title or Comments 78 2/4/05 Newspaper Article Auburn Journal "Campaign watchdog group investigating Ramirez fundraising" 79 2/3/05 Newspaper Article Auburn Journal "Diverse group holds reins of Sierra College" 80 12/24/04 Newspaper Article Auburn Journal "Further charges fly at college 81 2/2/05 Newspaper Article Auburn Journal "Grand Jury reports show Sierra leaders no strangers to contoversy" 82 3/10/05 Newspaper Article Auburn Journal "Klein recall effort folds" 83 1/28/05 Newspaper Article Auburn Journal "Lynn in as Sierra interim president" 84 3/27/05 Newspaper Article Auburn Journal "Politics at work in parcel tax? 85 1/30/05 Newspaper Article Auburn Journal "Ramirez buyout may have cost over $500,000 86 12/24/04 Newspaper Article Auburn Journal "Sierra college trustee calls on College President Ramirez to resign" 87 2/6/06 Newspaper Article Auburn Journal "Sierra inducts 46 into Hall of Fame" 88 11/4/05 Newspaper Article Auburn Journal "Sierra probes support for new bond 89 12/24/04 Newspaper Article Auburn Journal "Trustee alleges Ramirez funneled political spending" 90 3/3/05 Newspaper Article Lincoln News Messenger "Klein speech rekindles Sierra debate" 91 12/23/04 Newspaper Article Lincoln News Messenger "Ramirez Claims Pressure from Board to Resign" 92 12/30/04 Newspaper Article Lincoln News Messenger "Ramirez Rebuts charges by new board member" 93 1/27/05 Newspaper Article Lincoln News Messenger "Ramirez to step down as President of Sierra College" 94 2/1/05 Newspaper Article Lincoln News Messenger "Ramirez, Sierra board faced scrutiny in the past" 95 12/24/04 Newspaper Article Placer Herald "Sierra president alleges pressure to resign post" 96 12/20/04 Newspaper Article Sacramento Bee "College chief should quit, trustee says" 97 3/10/05 Newspaper Article The Union "Effort to recall Klein abandoned" 98 2/10/05 Newspaper Article The Union "Klein focuses on future for college" 99 2/22/05 Newspaper Article The Union "Making deals normal at college" 100 12/29/04 Newspaper Article The Union "Trustee: Sierra College leader should leave" 101 12/22/04 Internet Complainant's Blog "An Open Letter to our Sierra College Faculty, Classified Staff and Administration 102 1/4/06 Internet Complainant's Blog "Auburn Journal Article on the Proposed Sierra College Bond 103 5/27/05 Internet Complainant's Blog "Commencement, Part II" 104 2/4/04 Internet Complainant's Blog "Making Progress at Sierra College" 105 5/20/05 Internet Complainant's Blog "My Speech on a New College for a New Day" 106 6/20/05 Internet Complainant's Blog "Sierra College … On the Right Track" 107 8/27/05 Internet Complainant's Blog "The journal attempts to right a wrong …" 44 APPENDIX 3: TIME LINE OF EVENTS 45 This page intentionally left blank. APPENDIX 3: TIME LINE OF EVENTS • Foundation approves 501(h) election Î 01/13/03 • Foundation donor list circulates among Committee for Measure E Î 01/22/04 • Foundation approves $60,000 transfer to Measure E Î 01/26/04 • Foundation transfers $60,000 to Committee for Measure E Î 02/14/04 • Committee for E files Form 460 ($60,000 wo/donor detail) Î 02/18/04 • ELECTION: Bond Measure E Fails Î 03/02/04 • Foundation e-mails provide donor lists to G & H Committees Î 09/08-10/14/04 • Foundation approves funding up to $60,000 for Measures G & H Î 10/11/04 • Committee for Measure E files Form 460 Î 10/11/04 (shows transfers of $10K to Committees for G & H; returns $2419 to Foundation) • Foundation transfers $25,210 to Committee for Measure H Î 10/16/04 • Committee for Measure H files Form 460 ($25,210 wo/donor detail) Î 10/21/04 • Complainant detects FPPC filing errors for E, G & H Î 10/24/04 • ELECTION: Complainant elected as Trustee; Measures G & H pass Î 11/02/04 • Committee for E files amendment identifying individual donors Î 11/16/04 • Complainant writes & sends complaint to Grand Jury & Recorder Î 12/20/04 • Grand Jury receives 1st complaint (also County Recorder’s Office) Î 12/23/04 • FPPC acknowledges receipt of complaint from Recorder’s Office Î 12/27/04 • Grand Jury receives 2nd citizen complaint re: investigation of FoundationÎ 01/07/05 • Sierra College Board special meeting re: Ramirez/Board conflict Î 01/11/05 • Settlement agreement between Ramirez & College Î 01/21/05 • Letter from Recorder’s office to Foundation (‘You may need to file’) Î 01/24/05 • Foundation replies to Recorder’s Office letter re: attorney’s assessment Î 03/07/05 • Committee for H files amended Form 460 showing $25,210 donor detailÎ 03/22/05 • Grand Jury begins inquiry (attend Sierra College Board Meeting) Î 09/13/05 • Grand Jury receives 3rd citizen complaint Î 09/22/05 • Press repeats allegations upon Ramirez hall of fame induction Î 02/06/06 47 This page intentionally left blank.

Complainant’s insistence that the Foundation be barred from supporting Sierra College bond measures by donor solicitation as an intermediary is an unfounded opinion. The Foundation should not be prohibited from legal fund raising and bond measure contribution activities as the result of the erroneous view of a single Trustee. 33