Embattled UC Davis Chancellor Linda Katehi resigns

University of California, Davis chancellor Linda Katehi testifies in front of a Joint Informational Hearing on the UC Davis pepper spray incident at the State Capitol in Sacramento, CA, December 14, 2011. University of California, Davis chancellor Linda Katehi testifies in front of a Joint Informational Hearing on the UC Davis pepper spray incident at the State Capitol in Sacramento, CA, December 14, 2011. Photo: Max Whittaker, Special To The Chronicle Photo: Max Whittaker, Special To The Chronicle Image 1 of / 8 Caption Close Embattled UC Davis Chancellor Linda Katehi resigns 1 / 8 Back to Gallery

UC Davis Chancellor Linda Katehi, who was suspended in April after the University of California opened an inquiry into allegations of nepotism and misuse of student funds, gave up the fight for her job and resigned Tuesday.

Katehi, 62, resigned from her $420,000 position as UC President Janet Napolitano said in a statement that an investigation had found “numerous instances where Chancellor Katehi was not candid, either with me, the press, or the public (and) that she exercised poor judgment and violated multiple university policies.”

This year, she said, “has been an unhappy chapter in the life of UC Davis.”

By contrast, Katehi cast the investigation’s findings in a positive light in a five-page resignation letter she sent to UC Davis students and colleagues. She noted that the investigation by the former head of the U.S. attorney’s office in San Francisco, Melinda Haag, found that she “remained properly walled-off at all times” from decisions around the campus jobs of her son and his wife, whose pay rose by $50,000 while Katehi was chancellor.

“The report is clear: I did not exercise improper influence over or offer favorable treatment to my son or daughter-in-law,” said Katehi, who had retained a public relations consultant in an attempt to rally public support after being suspended.

Katehi, who has tenure, will remain at UC Davis as a full-time faculty member. She earned a doctorate in electrical engineering from UCLA and holds at least 16 U.S. patents.

Haag’s investigation, which Napolitano commissioned, also largely cleared Katehi of improperly authorizing student activity funds to be used for physical education purposes. Although the money was not supposed to be used for that purpose, investigators called the misuse “inadvertent,” and that new controls had been put in place to ensure it wouldn’t happen again.

However, the investigation found a long list of other problems, most of which came to light in a series of articles this year by the Sacramento Bee.

The probe determined that Katehi made statements to Napolitano and to the media that were “misleading at best, or untruthful at worst” about her role in hiring a social media consultant to suppress negative Internet references to the pepper-spraying by campus police of peaceful protesters at UC Davis in 2011.

In conversations with Napolitano and reporters, “Chancellor Katehi minimized her knowledge of and role” in hiring the consulting firm, the report found, noting that Katehi had said she had nothing to do with the contracts.

“In reality, Chancellor Katehi initiated UC Davis’ relationship” with the consultants by “unilaterally contracting an executive recruiter to find a social media consultant to help repair reputational damage” caused by the pepper-spray incident, Haag’s report said.

Katehi “advocated for or approved the hiring of each company, participated in meetings with each, and was aware of and reviewed their work product from time to time,” the probe found.

The investigation also concluded that Katehi had violated UC’s policies on moonlighting by failing to properly report and get approval for work on two boards. In so doing, she “failed to exercise diligence and judgment,” and she made statements to Napolitano that were “not candid,” the report said.

The improper work included joining the board of Saudi Arabia’s King Abdulaziz University in 2012, which she “knew at the time was allegedly working to improperly inflate its research statistics by paying renowned academics to ‘affiliate’ with the university,” Haag’s report said.

Also improper, the investigation found, was Katehi’s acceptance in February of a $170,000-a-year seat on the board of DeVry Education Group, a for-profit college that the federal government had sued for allegedly making deceptive claims about graduates’ job-placement rates and wages.

Katehi also violated UC’s travel policy when she and her staff “often submitted duplicative reimbursement claims” to the university and to outside organizations for travel, the report said. Haag also concluded that Katehi sometimes combined personal and business travel, making reimbursements unclear.

Finally, the investigation found that Katehi’s “leadership and credibility with the campus community and the public” was in jeopardy because she recently said she may renege on a public promise to establish a scholarship fund with $200,000 in stock proceeds she received from serving on the board of a textbook publisher.

Some state lawmakers had called for Katehi’s resignation. On Tuesday, the chairman of the Assembly Budget Subcommittee on Education Finance, Kevin McCarty, D-Sacramento, said in a statement that “with Chancellor Katehi’s resignation, a sad chapter has come to an end.”

Nanette Asimov is a San Francisco Chronicle staff writer. Email: nasimov@sfchronicle.com Twitter: @NanetteAsimov