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At the U of M, critics see a tepid response to a conflict of interest

By Mike Kaszuba

Seven months after she became president of the University of Minnesota, Joan Gabel sent an email to the senior vice president and general counsel at Securian Financial.

“Thank you for hosting me at your table and thank you for your kind words of support,” Gabel told Securian Financial’s Gary Christensen in February 2020.  “Please don’t hesitate if there is ever any way I or we can be of service.”

Though the email at the time appeared innocuous, it would offer a glimpse into the relationship that Gabel and Securian Financial were forming in the months before she agreed to join the company’s board of directors while the company had a billion-dollar business relationship with the school.  A month after taking the $130,000-a-year board position, Gabel would resign “with a heavy heart” amid an ensuing conflict of interest controversy.

Documents obtained by Public Record Media (PRM), a non-profit based in Saint Paul, show that even after Gabel left the university – she announced her resignation less than four months after the controversy began – school officials have walked a fine line between defending what happened and convincing critics that policy changes have been made to alleviate future problems.

But the result has left skeptics, including former Minnesota Gov. Arne Carlson, wondering why the school did not simply prohibit future top school administrators from doing what Gabel did.  The school’s board of regents, which approved Gabel taking the board position by a 9 to 3 vote, instead recently created a new Presidential Conflict Review Panel to review similar situations in the future.

“It was totally corrupt,” Carlson said of Gabel’s accepting a board position with Securian Financial.

U of M: Gabel, Securian correspondence not public
At the same time, the school has ruled that most documents related to Gabel’s relationship with Securian Financial would not be released.

The school has said that – with the exception of 34 pages of correspondence – Gabel’s communications with Securian Financial over the board position were not considered government data, and therefore could not be made public.  The school likewise said that Gabel’s communications with the school’s board of regents about the Securian Financial position were considered private personnel data and therefore also not public.

PRM contested the school’s position regarding the “private” classification of certain Gabel correspondence, but the school declined to release any further data.

“While you're correct that President Gabel's communications with Securian would not be considered private personnel data, it ultimately would not be considered government data at all, since the content would be focused on her work with the Securian Board, not as the University's President,” Jake Ricker, a university spokesman, told PRM.

Ricker added:  “The President's communications with the Board of Regents and the University's General Counsel about serving on the Securian Board, which would be defined as private personnel data, along with non-government communications with Securian, would likely be the majority of the data available on this topic, which is why I cautioned at the outset that there may be limited public data responsive to your request.”

The school’s stance revealed the complexities – and inconsistencies -- found in the state’s public data laws, said Don Gemberling, a longtime expert on public data in Minnesota.  He said emails from public officials, who are permitted to also use the same email address for private correspondence, have created a “gray area” over what is public data that has “never really been clarified.”

Gemberling said the confusion can lead to “an absurd result.”

“When you step back for a minute, the big thing [you think to yourself is], ‘You’ve got to be kidding me,’ ” said Gemberling, the former director of the state Information Policy Analysis Division, which is now the state Data Practices Office.

“This woman [Gabel] did all this, probably on company time [and] now they’re saying the stuff she did as part of her job, or maybe not part of her job, isn’t subject to any kind of scrutiny,” he said.

The documents the school did release to PRM concerning Gabel meanwhile raised more questions.

Two months before Securian Financial announced that Gabel was joining its board, emails show that a top company official briefed the school president on an upcoming announcement that the company was selling its retirement plan recordkeeping business.

“Greetings Joan,” wrote an executive assistant to Chris Hilger, Securian Financial’s president and chief executive, on Oct. 19, 2022.  “Attached is the press release that Chris mentioned during your call earlier.”

Securian Financial announced on Dec. 19 – two months later – that Gabel was joining its board.

“As the leader of one of the largest and most important institutions in our home state, Joan Gabel is a strong addition to the Securian Financial board of directors,” Hilger said in a company statement.  “We welcome her and look forward to benefiting from the unique perspectives and experiences she will bring to the company’s governance team.”

Meanwhile, the documents released to PRM by the school did not indicate when Gabel and Securian Financial began discussing her joining the board.

At the time Gabel joined the company’s board of directors, school officials said the university paid $4.6 million a year to Minnesota Life, a Securian Financial affiliate.  Several years earlier, the school had transferred its retirement plan administration from Securian Financial to Fidelity Investments but as Gabel prepared to join the board it still had about $1.3 billion in "legacy business" with Securian Financial.

Gabel herself was part of that.  In a January 2020 email to the school president, Securian Financial informed Gabel that “you’re quarterly statement is now available.  Faculty Retirement Plans.  You can view, print or download it at umnplans.securian.com.”  The quarterly notices were part of the documents released to PRM by the school.

In early December 2022, the school’s existing Institutional Conflict Review Panel met three times over six days to discuss Gabel’s joining the Securian Financial board.  While the panel concluded that the situation “would constitute an institutional conflict of interest”, it nonetheless voted 5 to 1 to approve the arrangement, adding that “the majority of the Panel members determined that this conflict could be managed” by school officials.

In December 2021, a year before Gabel joined the Securian Financial board, the school gave Gabel a new five-year contract that would pay her more than $1 million a year, not counting a possible performance bonus.

As the controversy swirled into early 2023, Carlson and other critics urged state officials to take action – but were met with a muted response.

“An embarrassing episode”
“It was an embarrassing episode for the University,” Darrin Rosha, a member of the school’s board of regents at the time, recently told PRM.

“We were notified the night before of the vote to permit President Gabel to violate the U’s own policy, and I did all I could to get the decision postponed until we could look into it,” said Rosha, who joined Carlson and Richard Painter, a faculty member at the school, in complaining about Gabel’s board membership.  Painter had also served as the chief ethics lawyer to former President George W. Bush.

“I requested and was denied a legal review by the U’s general counsel,” said Rosha, who voted against allowing Gabel to join the Securian Financial board.  “I spoke against it, stating I couldn’t believe we were even considering it, but it passed.”

Minnesota State Attorney General Keith Ellison told Carlson, Rosha and Painter that Gabel’s joining the Securian Financial board was “ill-advised” – but said the issue was beyond the jurisdiction of his office.

In a Jan. 12, 2023 letter to Carlson and the others, Ellison wrote:

“My personal opinion, which carries no legal weight, is that even if the President's paid board membership does not violate any statutes, rules, or ethical codes, (and I am not saying it does or does not) it gives the appearance that her loyalties are divided between the University and Securian, and it's ill-advised,” the state attorney general wrote.

Ellison’s office instead turned the issue over to Judy Randall, the legislative auditor, and the state Legislative Audit Commission, a bi-partisan legislative panel that selects issues for the legislative auditor to investigate.  James Canaday, a deputy attorney general, told Randall the issue was being sent to her “for your collective review and attention to determine what, if any, further action may be appropriate, including but not limited to referrals to local criminal law enforcement authorities.”

Legislative auditor stopped inquiry
But Randall told PRM that, once Gabel quickly stepped down from the Securian Financial board, her office dropped its initial investigation – leaving unresolved the question of whether steps should be taken to prevent future presidents at the school from doing what Gabel had done.

“At that point [when Gabel stepped down from the board], it no longer made sense for [the Office of the Legislative Auditor] to allocate its limited resources on the matter, and we suspended our inquiry,” Randall told PRM in an email.

She added that her office “did not conduct enough work to make any such determination” on whether state officials should take steps to prevent future conflicts regarding the university president.  “We had only just started reviewing public documents when President Gabel stepped down from the Securian board,” Randall added.

That left the issue for the university.

The school’s board of regents did publicly move to create a new investigative panel, but not until eight months after Gabel suddenly announced in April 2023 that she was leaving the school.

In December 2023, the school’s board of regents announced it was considering forming a Presidential Conflict Review Panel that would in the future investigate specific conflicts involving the school’s president.  “We want candid review, candid independent review, in terms of whether there is a conflict,” Janie Mayeron, the board’s chair, told the Minneapolis Star Tribune.

As the school’s board of regents considered the change in March 2024, a briefing report provided more detail, including that the panel would be appointed by the board of regents’ chair.  Previously, the same review process had been used for both school employees and the president, meaning that staff reporting to the president potentially could be asked to investigate a conflict regarding the president.

“This panel doesn’t necessarily supplant/replace the old process,” Ricker, the school spokesperson, told PRM in an email.  The panel “was added to the University’s existing conflict management process for employees specifically for instances when a conflict may arise with the president.”

The school’s board of regents voted overwhelmingly to create the new panel at its March 8 meeting.

“I would like to just thank the Governance and Policy Committee for really thoughtfully approaching this policy because, you know, it’s important and required a lot of thoughtfulness,” Kodi Verhalen, a member of the board of regents, said at the meeting.

After the vote, Rosha told PRM that it was “disappointing that the board [of regents did] not take a clearer approach to preventing conflicts of interest.”  Carlson added that the policy changes “generate more confusion than clarity.”

Carlson said that, when he was serving as governor in the 1990s, Mark Yudof (the school’s then-president) told Carlson he had been approached by TCF Bank executive Bill Cooper to be on the bank’s board of directors while he also served as University of Minnesota president.

“I told him, no,” said Carlson.

(Supporting documents for this article can be accessed by contacting Public Record Media at admin@publicrecordmedia.org , or at 651-556-1381)


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