Legislators are currently discussing a bill that would restrict public access to some financial decisions regarding the University of MinnesotaâÄôs endowment. Specifically, the bill âÄî on both the House and Senate floors âÄî would prevent the public from accessing information about private venture capital investments that could cause competitive harm to the University or its investments. Stuart Mason, University chief investment officer, said this bill, if passed, would make it easier for the University to find smart investments and could help increase the endowment âÄî which is about $910 million. Certain venture capital groups have discontinued or avoided relationships with the University because of the current Data Practices Act, which allows public access to its investments, Mason said. He said the current access to information could prevent the UniversityâÄôs endowment from profiting off of the next Google, for example. Most venture capitalist groups have told Mason that the University cannot invest with them if âÄúcompetitive informationâÄù can be accessed through a DPA or Freedom of Information Act request. âÄúThere has been a trend where we have been consistently excluded from investment partners,âÄù he said. Mason said the access of information allows other groups to see who the University is investing with and creates a competitive disadvantage because they cannot hide their good investments from competitors. If this bill passes, the endowment could see increases between $30 and $40 million per year because some of the venture capital groups denying the University produce up to a 30 percent return on investments each year, Mason said. Sen. Don Betzold, DFL-Fridley , said University officials came to him with this proposal about a year ago. Betzold, one of the co-authors of the Senate bill, said he supports the bill because it could help raise money for the University. âÄúIf youâÄôre saying the University has an opportunity to increase some of its funds and make great returns that are going to help the financial stability of its investments, I think most people would say thatâÄôs a good idea,âÄù Betzold said. But not everyone agrees that the University profiting by hiding public information is a good idea. Rep. Steve Drazkowski, R-Wabasha , said he thinks Minnesotans should be able to see where their money is going. âÄúIf weâÄôre shutting off peopleâÄôs access to information about where their money goes, then the government is failing to be responsible to the people,âÄù Drazkowski said. The government should be transparent, Drazkowski said, and the passage of this bill would cause a sense of mistrust between the public and the government. He also said the bill could send the message that the government is trying to make money. âÄúGovernment wasnâÄôt created to make money,âÄù Drazkowski said. âÄúGovernment was created to serve the interest of the people, and we need to remember that and make that clear.âÄù Mason said one reason he thinks this bill could pass is because a similar bill passed in 2004 restricting public access to the Minnesota State Board of Investments. Drazkowski said this precedent should not be a deciding factor for this bill and thinks the 2004 bill should be reconsidered. While both current bills are a part of omnibus bills and could pass through the Senate and House, they still have to be signed by Gov. Tim Pawlenty. Mason said he would like to see the University begin to make more money. âÄúThirty [million dollars] to $50 million means a lot of scholarships and life-saving research that wonâÄôt get done if they donâÄôt pass this bill,âÄù Mason said.
Bill could help U profit from investments
Critics are worried the bill is too restrictive on public access to University information.
Published April 14, 2009
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