The Board of Regents has been the subject of various corruption scandals throughout the university's long history. The board's first scandal surfaced in 1874. By June 1872, regent
Samuel Merritt had become the chair of the board's building committee and initiated planning for the original
College of Letters building (later known as North Hall). Although the board also passed a resolution that same month prohibiting
self-dealing with respect to construction of campus buildings, the winning bid was ultimately submitted by Merritt's preferred contractor, Power and Ough, "and much of the lumber and cement for the building came from Merritt's own lumber company." The
San Francisco Evening Post broke the story on January 6, 1874, and two days later, the
California State Assembly's public building committee launched an investigation which held hearings through March 3 of that year. The committee concluded that Merritt had profited financially from providing an inferior building to the university at an exorbitant cost: $24,000 over its reasonable value. In 1970, the California state auditor found that regent Edwin W. Pauley, who owned Pauley Petroleum, personally profited when university officials steered $10.7 million dollars into one of his company's business deals. In 1970, the California state auditor investigated regent William French Smith and regent Edward Carter for conflict of interest dealings. The actions investigated included the joint purchase of a $253,750 piece of property for Carter's personal use, with the university paying $178,750 and Carter paying the remaining $75,000. Smith, who was Governor Reagan's personal lawyer and a Reagan appointee to the board, was a lawyer at the law firm representing the
Irvine Company, a private real estate company. Carter was a lifetime board member of the
Irvine Foundation, which has a controlling interest in the
Irvine Company. In 2007, the Board of Regents signed the EBI contract, a $50 million university privatization contract funded by the
BP oil company. The contract gave financial control over all clean energy research at UC Berkeley to
BP, with $15 million directed towards proprietary research allowing the oil company able to keep around a third of the patents produced by the academic employees while also financially controlling all other clean energy research upon the campus. The contract likewise allowed BP oil to construct a building on the UC Berkeley campus with entire floors that only BP employees are allowed to enter. Following the signing of the contract by the UC Regents, professors complained that BP Oil bypassed normal university hiring and tenure protocol and hired professors directly, without consulting any academic department. Opponents have also argued this and other privatization contracts are a way to replace middle class engineering jobs with cheap graduate student labor. Regent
Richard C. Blum, financier and husband to Sen. Dianne Feinstein, served on the board of regents' Investment Committee. Allegations of conflicts of interest have arisen because, during Blum's tenure, UC has invested hundreds of millions of dollars where he had concurrent business interests. According to an investigation by the
Sacramento News & Review, conflict-of-interest dealings by the UC Board of Regents accelerated in the years prior to the 2008 recession. Beginning in 2003, "[M]embers of the board of regents benefited from the placement of hundreds of millions of university dollars into investments, private deals and publicly held enterprises with significant ties to their own personal business activities, while simultaneously increasing the cost of university attendance." Only after extensive public outcry, university leadership released a statement saying the university would no longer fund these dinners. ==Regents==