THE REGENTS OF THE UNIVERSITY OF CALIFORNIA BRUCE D. VARNER Chairman Riverside, CA 92501 June 30, 2015 Janet Napolitano President Of?ce of the President University of California 1111 Franklin Street, 12th Floor Oakland, CA 94607-5200 Dear Janet: This letter is a follow-up to our discussions relative to the report proposed by Keith Rohman of Public Interest Investigations, Inc. Report?) to Daniel Dooley dated March 3, 201 5 concerning Regent De La Pe?a. As discussed I have reviewed Regent De La Pe?a?s letter of May 10, 2015, and with respect to the facts known to me, I am in agreement with the statements contained in his letter. Also I have some additional comments concerning the PI1 Report. Its conclusion that Regent De La Pe?a was attempting to ?nd a way for his clinics to be purchased outside of regental process is troublesome since my discussions with him lead to a different conclusion. I stated to Mr. Rohman that Regent De La Pena contacted me to inform me that the possibility of a transaction involving UCLA Medical Center and his ophthalmology practice had just been presented to him and he wanted to be certain he followed proper procedures with respect to any further discussions. I advised him to contact the University?s General Counsel, Charlie Robinson to inform him of the situation and obtain his legal advice. During this conversation and subsequent conversations concerning this subject Regent De La Pe?a?s emphasized that he did not want to do anything wrong or inappropriate under policies or violate any UC rules. He also made the same statements to Charlie Robinson which Charlie continued to me and are substantiated in the PH Report. This does not suggest any attempt to avoid the regental process. The PII Report states that I had several conversations with Regent De La Pe?a concerning this matter which is correct. Although the PH Report seems to indicate the subject of a potential transaction with UCLA Medical Center was the primary focus of my several discussions with Regent De La Pe?a during the relevant time period they were not always the main topic of the majority of our conversations. As we have discussed at that time there were ongoing discussions concerning delegation for approvals of health services and related issues, and this along with other issues concerning the medical centers were the main topics for most of my discussions with Regent De La Pefia in his capacity as Chair of the Health Services Committee. During those conversations there was mention of the matter concerning his clinics and that he was waiting for Charlie Robinson?s input and Janet Napolitano, President University of California June 30, 2015 Page. .2 Regent De La Pe?a assured me he was not initiating any ?irther discussions with UCLA Medical Center until he heard from Charlie Robinson. With respect to Charlie Robinson?s advice he never informed me or Regent De La Pe?a of any Speci?c regental policy affecting any discussions between Regent De La Pe?a and UCLA Medical Center regarding Regent De La Pefia?s clinics. In fact there was never any discussion or mention of Regent?s Policy 1 1 10 at all. In his statements to me Charlie Robinson focused on the Political Reform Act and Section 1090 of the Government Code. He stated if the Political Reform Act was the only controlling law the University could consider a transaction with Regent De La Pe?a and consummate it provided that he recuse himself from the discussions in which any decisions were made. He also suggested that in order to develOp a speci?c proposal Regent De La Pe?a would need to obtain an attorney or other third party to represent him in the discussions. He stated that the FPPC has held in a similar situation that a public of?cial could not negotiate with his agency the terms of a contract in which he had a ?nancial interest but rather would have to have a third party pursue the negotiations. In his comments with respect to Section 1090 he stated it was unclear whether it applied to the Regents and that there was pending litigation concerning the applicability of this section to UC. He advised that we should be cautious in pursuing any transaction that would create a possible decision adversely affecting the University?s position on the applicability of Section 1090 to the Regents. In general he was also concerned about the optics of any transactions with Regent De La Pe?a. But as stated there was never any discussion concerning Regent?s Policy 1110 which was first cited in the P11 Report. From the outset it seems that the main thrust of the complaints hm was that Regent De La Pe?a retaliated against them by unnecessary overSIg an critique of their potential transactions resulting in delays and disruption of the approval process. As you know these allegations turned out to be incorrect which is set forth in the P11 Report. As discussed please arrange to have a copy of this letter attached to the P11 Report. Very truly yours, Ver Bruce . BDV/cuh Attachment