UC Davis Chancellor Katehi challenges Napolitano’s investigation

FILE - In this Dec. 14, 2011 file photo, University of California, Davis, Chancellor Linda Katehi, told lawmakers that she never ordered campus police to use force or pepper spray on students last month, while testifying at a legislative hearing at the Capitol in Sacramento, Calif. Katehi has been placed on leave amid an uproar stemming in part from the school's hiring of consultants to improve its image, following a widely criticized protest pepper spraying incident by police. UC President Janet Napolitano's office announced Wednesday, April 27, 2016, that she is appointing an outside investigator to determine whether the actions of Chancellor Katehi have violated university policies. (AP Photo/Rich Pedroncelli, File) less FILE - In this Dec. 14, 2011 file photo, University of California, Davis, Chancellor Linda Katehi, told lawmakers that she never ordered campus police to use force or pepper spray on students last month, while ... more Photo: Rich Pedroncelli, Associated Press Photo: Rich Pedroncelli, Associated Press Image 1 of / 1 Caption Close UC Davis Chancellor Katehi challenges Napolitano’s investigation 1 / 1 Back to Gallery

SACRAMENTO — Embattled UC Davis Chancellor Linda Katehi launched a public relations offensive Friday, striking back at the University of California, which has hired an outside law firm to look into whether she engaged in nepotism, improperly used student fees and lied about outside contracts in violation of ethics policies.

Speaking on behalf of Katehi at a media event in Sacramento, Katehi’s lawyer, Melinda Guzman, and public relations consultant Larry Kamer accused the university of unfairly targeting Katehi and raised concerns about possible conflicts of interest involving the law firm and its head investigator.

They said Katehi could not speak about the matter herself because she has been instructed by the office of UC President Janet Napolitano not to discuss the facts of her case while the investigation is pending.

“Chancellor Katehi loves the university, she loves UC Davis,” Guzman said. “She was harmed when on April 27 President Napolitano — in a very unprecedented and very disrespectful way — publicly placed her on a paid administrative leave. … This is not an independent or a neutral investigation.”

Range of issues in probe

Napolitano placed Katehi on a 90-day leave after students and lawmakers demanded her resignation, outraged over her involvement with a for-profit education corporation and the school’s questionable use of consultants to clean up its online reputation.

The university hired law firm Orrick, Herrington and Sutcliffe LLP to conduct the probe, which was expected to look into a range of issues, including whether Katehi misused her position so her son and his wife received advantages in their campus jobs — including $50,000 in raises to the wife. Also mentioned as areas for inquiry are Katehi’s possible involvement in contracts related to managing the campus, her reputation on social media, and the possible misuse of student fees.

The lead investigator is Orrick partner Melinda Haag, who was U.S. attorney for the Northern District of California under the Obama administration from August 2010 to September 2015. Investigators at Orrick, where Haag is in the White Collar & Corporate Investigations group, will be paid $595 an hour, a significant discount from a previously negotiated rate of $845.50.

UC spokeswoman Dianne Klein said the firm agreed to the lower rate because the university is a public institution.

Guzman and Kamer, however, questioned Orrick and Haag’s ability to conduct an objective investigation, alleging that the law firm has had a long-standing relationship with the University of California, representing the institution in various legal matters. Haag, they said, also has a personal conflict of interest, having represented the Department of Homeland Security while Napolitano was serving as the agency’s head under President Obama from 2009 through 2013.

“This investigation is hopelessly compromised, it cannot be saved, it has to be scrapped, it has to be started over, it has to have a new lead investigator,” Kamer said.

Haag and Orrick referred questions to the university. Klein said in a statement that there are no conflicts of interest.

“As the U.S. Attorney (Haag) was on record in a case involving the Department of Homeland Security,” Klein said. “She never met with Napolitano. She was never hired by Napolitano. She never represented Napolitano. They have never had any discussion of legal issues. Period.”

Daughter-in-law promoted

Katehi’s daughter-in-law, Emily Prieto-Tseregounis, was hired as an executive analyst at UC Davis in 2013, earning $77,000. In less than three years, she was promoted to assistant vice chancellor, earning $130,000, according to Klein. In February, a UC attorney advised against promoting her again, Klein has previously said.

The investigation will also look into whether Katehi’s son, Erik Tseregounis, a paid researcher at Davis, was improperly placed under the supervision of his wife and whether student fee revenue was misused in the process. Katehi’s husband, Spyros Tseregounis, is a chemical engineering professor hired by faculty in 2009. His position is not in question, Klein has said.

In March, the Sacramento Bee newspaper reported that Katehi, without required UC approval, had joined the board of the for-profit DeVry Education Group in February, a position that paid $70,000. The Federal Trade Commission is suing DeVry, accusing it of falsely claiming that its graduates move into well-paid jobs within six months of graduating and that they earn more than graduates from other schools. Katehi resigned from the board and apologized.

State Sen. Marty Block, D-San Diego, then requested information about any other outside income and found that Katehi, an electrical engineer, had also served two years on the board of John Wiley & Sons, which publishes engineering, math and science textbooks. She earned $420,000 in salary and stock options on top of her $424,360 salary at Davis, an arrangement that raised questions about a potential conflict of interest.

In April, the Bee also reported that UC Davis had paid consultants $175,000 to remove negative Internet references to a 2011 incident in which protesting students were doused with pepper spray by a Davis police officer and to Katehi’s role in allowing it.

Napolitano has said it appeared that Katehi lied about her role in those social media contracts, in violation of UC’s ethics policy.

Guzman and Kamer disputed allegations that Katehi misused her position to benefit her son and his wife. They said she disclosed her ties to them and was not inappropriately involved in their opportunities at Davis.

As far as serving on boards, they said that Katehi’s actions were in keeping with university policy and that dozens of university employees also serve on boards of directors. “She has violated no university policies and certainly not the law,” said Guzman, adding that Katehi has filed a grievance with UC.

“It’s concerning to some of us that as a woman she seems to be singled out,” Kamer said.

‘Not targeting anyone’

Klein dismissed the notion that UC’s approach to Katehi had in any way involved her gender.

“The president of UC and the chair of the Board of Regents are both women. We are not targeting anyone, based on gender or anything else,” she said.

Because Katehi has tenure at UC Davis, she can be removed from her administrative job but can’t be fired without a hearing before Davis’ Academic Senate, according to André Knoesen, chairman of that body. Knoesen has previously said that option is not on the table.

A report on Haag’s investigation is expected to be submitted before the start of the 2016-17 academic year.

Cynthia Dizikes is a San Francisco Chronicle staff writer. Email: cdizikes@sfchronicle.com Twitter: cdizikes