Stanford Threatens to Kill Deal With UC

In a strongly worded letter to University of California President Richard C. Atkinson, Stanford University President Gerhard Casper has set a deadline of next month for agreement on the proposed merger of the medical centers of UC San Francisco and Stanford, and threatened to call the deal off if his terms are not met.

The landmark merger, which would create the largest medical complex in the West, has been under discussion for more than a year. But several members of the UC Board of Regents have recently voiced concerns about whether the deal makes financial sense for University of California, and some have opposed a plan to make the merged entity exempt from the state’s open meetings and records laws.

Responding to these concerns, Casper’s letter--dated June 24--made it clear that the private nature of the merged corporation is a nonnegotiable point for Stanford. And he set mid-July as a deadline to resolve the matter, saying that if these things do not occur he is “fully prepared” to abandon the project.

“We have understood from the very beginning that what we were pursuing had no precedent and would face innumerable difficulties. Most people prefer the status quo. . . . Parochialism is a powerful force,” Casper wrote. “We cannot delay much further on these matters, however; an agreement in principle to the proposal by mid-July is essential.”

On the issue of whether the new corporation’s meetings would be open to the public, Casper said he would not budge “because the flexibility of a private organization is fundamental to success in the current marketplace. Rather than enter into a quasi-state entity, Stanford would end the negotiations and remain separate.”

The letter, which was forwarded to all UC regents, seemed only to crystallize the worries of some.

Regent Frank W. Clark Jr., who at a board meeting last week said he felt “queasy” about the proposed merger, said he was not sure how the full board would react to the letter. And Clark said he was puzzled by Casper’s vehemence on the issue of making the new entity a private organization.

“I’ve never found the fact that we are a public institution onerous to any extent. On the contrary. We are a public trust,” Clark said. “He apparently is delivering to us a quasi-ultimatum.”

Lt. Gov. Gray Davis, who is a UC regent by virtue of his political office, said that as a Stanford alumnus, he respects Casper. But, he added, “The UC regents are not robots, and we should not be railroaded into making a hasty decision.”

Nevertheless, Regent Ward Connerly said he thought it would be possible for the board to give Casper some indication of the way it is leaning at its next meeting in July.

“I think it’s appropriate for [Stanford] to say, ‘Let us know if this is something we should pursue,’ ” he said.