PENLEY RESIGNS Provost acquires CSU helm

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Nov 062008

101608_penleyucaBy Aaron Hedge and J. David McSwane

In a shocking mid-semester announcement, CSU President Larry Penley resigned Wednesday night, ending a five-year tenure underscored by his CEO approach to leadership and squabbles with students, faculty and state officials.

“I believe that my leadership has contributed to significant progress for Colorado State University,” Penley said in a statement. “But I want to be free to pursue other leadership positions in higher education. This resignation will allow me the flexibility to do so.”

In a closed-door meeting between presidential cabinet members and the council of deans, Tony Frank, senior executive vice president and provost, announced that he is taking over as interim president effective immediately.

“The important things right now are to focus on smooth continuity of transition for the university,” said Frank, who has worked at the university for more than 15 years. “President Penley has served this institution very well.”

“He leaves the university in an excellent position,” he added. “All of (the) fundamentals are very, very sound, and the president deserves a great deal of thanks for that.”

Penley is currently taking vacation leave and will officially vacate his post Nov. 30, Frank said.

The president and chancellor’s abrupt departure comes two days after an evaluation committee, consisting of voting members of the CSU System Board of Governors, met with Penley as part of an annual evaluation.

And late last month, John Lincoln, Penley’s No. 2 as executive vice president, also announced his resignation.

Outside his house in south Fort Collins Wednesday night, Penley declined to comment about his departure, saying: “Sorry, I don’t have anything to say.”

Blanche Hughes, vice president for Student Affairs, said Penley’s resignation came as a surprise to the administration but declined further comment.

Frank learned of the news earlier Wednesday, he said, and accepted the BOG’s proposition that he temporarily lead the university.

The BOG should begin searching for a new president sometime in the near future, Frank said, and although it’s “very early” to say, he could be a candidate for the position.

Doug Jones, the chair of the BOG, said Frank is a top contender for the job.

“Tony Frank knows this campus as well as anyone,” he said. “We will not miss a beat.”

Richard Eykholt, chair of CSU’s faculty council, echoed Jones’ statement, expressing confidence in Frank’s ability to take over the helm of the state’s second largest university.

“(The faculty) has complete confidence in Tony to continue to move the university forward. We’re very optimistic in how we’re going to proceed,” Eykholt said.

Taylor Smoot, president of the Associated Students of CSU, said when it comes to communication between the president’s office and students, CSU was “a laughing stock” compared to other schools. He said under Frank’s leadership, students will have more say in the university’s business practices.

“Tony Frank is the best person for this position,” he said. “He shows up. He’s the man.”

Penley’s final semester

In his time at CSU, Penley drastically overhauled top-level administration, adding more than a dozen VP-level spots with hefty budgets and salaries while the academic colleges and library saw a much smaller growth in financial support.

During that time, several key financial overseers left the university — three on the same day — accepted large financial incentives and signed confidentiality agreements, an eight-month-long Collegian investigation found.

And just weeks before his resignation, top student government officials formed an official financial oversight committee to evaluate Penley’s fiscal management of the university.

The group promises to present their investigation’s findings to state legislators who have called for more transparency in the university’s financial reporting.

Recently re-elected State Rep. John Kefalas, D-Fort Collins, said in an interview earlier this semester that, overall, he was pleased with Penley’s leadership of the university but stressed that students and taxpayers should know more about how the university is using tuition and tax dollars.

A tumultuous presidency

In an interview earlier this year, Frank likened Penley to a chief executive officer of a major company, citing the need for aggressive fundraising efforts for public universities as state funding continues to fall short.

And if Penley was the CEO, Frank would be the chief financial officer — the guy who lost his job if something went wrong, Frank joked.

From the perspective that the university is a product and students are consumers, Penley led the school like a business — beefing up marketing, initiating the branded “Superclusters” initiatives, rubbing elbows with potential donors and sponsors from across the country and, recently, pushing to establish CSU as “the green university.”

While Penley’s tactics were lauded by many — as under his leadership the CSU budget and research expenditures increased substantially — some were opposed to the president’s financial philosophy and direction for the university.

Throughout his tenure, CSU faculty members criticized the president as focusing too much on saturating administrative budgets and competing for research grants, which are restricted funds and usually can’t be spent outside that specific research project.

Citing a lack of communication with the CSU community, student government officials and faculty members questioned Penley and his administration.

John Straayer, a long-time university political science professor, has publicly criticized the administration and has charged Penley with neglecting the instructional side of the university.

“I don’t think it comes out in the wash,” Straayer said earlier this semester. “As the burden has been shifting more and more on students, large chunks of that money aren’t going to the instructional side … I think that’s questionable.”

“Where is the academic core of this place?” he added.

During Penley’s time at CSU, he launched an award-winning national advertising campaign, increased freshman enrollment by record numbers every year since 2004 and brought an additional $200 million to the CSU budget.

Inaugurated in 2004, Penley brought an all-business approach to leading CSU and emphasized the importance of establishing new revenue streams as Colorado was falling to the bottom of the barrel for funding in higher education.

Penley established himself shortly after arriving at CSU’s helm as an active champion of the university’s technology transfer programs, which bring university research findings to the market, coining them “Superclusters” and actively campaigning on a national level to bring visibility to them.

But bringing more light to the research entities comes with a heavy price tag.

Last year alone, CSU spent $303 million on research initiatives, with a substantial amount — $45 million — of that money coming from the university general fund, which is essentially a bucket of money that primarily comes from sharply increasing tuition and fees.

At the same time, Penley significantly shored up the guts of CSU administration by funneling millions of dollars that could have gone to academics into vice presidential and other top-level budgets.

And the trend of ongoing administrative top-loading and heavy spending on research has been highlighted by highly-publicized controversy as Penley engaged in public battles with students, faculty and state lawmakers.

In 2007, student leaders cried foul as Penley introduced a last-minute clause into the Long Bill, which dictates university budgets, that would have effectively increased tuition at CSU by more than 40 percent.

Student leaders organized on campus and at the Capitol in opposition to Penley’s last-minute amendment to the document. And the revision was consequently killed in the state legislature.

In the wake of the Long Bill controversy, Penley and Gov. Bill Ritter publicly clashed about how to address funding shortages for the school — tuition hikes being the last resort according to Ritter. Penley accused Ritter and other state lawmakers of striking down CSU’s ability to fund itself in Colorado’s tight fiscal situation.

What’s next for CSU?

Frank said while the university awaits a new president to take over, it’s business as usual.

“I think if we all do our jobs right, and I’m confident that we will, it should not have much of an impact,” Frank said. “No one person makes the institution run the way it does. It runs because of the hard work and effort of (everybody).”

News Managing Editor Aaron Hedge and Enterprise Editor J. David McSwane can be reached at