Despite IT layoffs, UCal academics will stay on HCL boards

University of California contract with IT services vendors raises systemwide questions

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The dean of engineering at the University of California, Berkeley, S. Shankar Sastry, also serves on the board of HCL Technologies. This is a company that delivers IT services, and whose subsidiary, HCL America, was hired by the University of California at San Francisco (UCSF).

Sastry has been on the HCL board since 2012, and reports his compensation to the university. The relationship is clearly in the open, but there is a complication.

The decision to hire HCL to manage infrastructure at UCSF is bad news for about 50 of its IT employees and another 30 contractors. They will lose their jobs to the outsourcing company by the end of February after replacement training is completed.

The contract that UCSF reached with HCL, valued at $50 million over five years, can be leveraged throughout the university system. This means it can be used at the university's campuses in Los Angeles, San Diego, Berkeley and many other places. The university reports $28.5 billion in operating revenues. It's an amount that is larger than the budgets of about 25 states.

Sastry is paid $75,000 for serving on the HCL board, according to the university's most recent disclosure report. In an email, Sastry was asked by Computerworld: Does this systemwide contract with HCL pose a conflict for you?

Janet Gilmore, a university spokeswoman, responding in an email, said that in regard to a conflict of interest, "there is none."

Sastry "has been on the board of HCL Technologies since 2012. His board membership is regularly disclosed as an outside professional activity to the UC Berkeley administration," Gilmore wrote.

Until Computerworld's email earlier this week, Gilmore said, Sastry "was unaware of either negotiations between UCSF and HCL Technologies or the signing of a contract for IT services between HCL Technologies and UCSF. He has not been involved in any discussions or negotiations about the contract on either the UC side or HCL side."

Moreover, Gilmore wrote that Sastry "does not know nor is a party to the details of the UCSF contract with HCL Technologies and so is unable to comment on the nature of the services being provided."

Ron Hira, an associate professor of public policy at Howard University, who has testified numerous times in Congress on H-1B visa use, said that Sastry's HCL board membership "is troubling in a number of ways."

"First, the firm's profit model is based upon destroying U.S. IT and engineering jobs," said Hira said. The firm is also a major user of the temporary visa program, the H-1B and L-1 visas, he noted.

Hira said there is a clear conflict of interest for Sastry with his role on the HCL board and the university's systemwide contract. "Whether or not Dean Sastry was directly involved in identifying the client or the contracting negotiations is immaterial," he said. "There is a glaring appearance of a conflict of interest."

Hira said that Sastry should resign immediately from the HCL Technologies board "and donate the compensation he's received from the firm to a fund to help the U.S. workers displaced by HCL."

It has been previously reported that Pradeep K. Khosla, chancellor of the University of California, San Diego (UCSD), is on the board of HCL Infosystems, a firm that provides distribution and IT services for companies in India, Asia and the Middle East.

Khosla, who has been on the HCL Infosystems board since 2011, receives $12,000 for his board service.

UCSD spokeswoman Judy Piercey said last week that, "the contract was negotiated between UCSF and HCL; it did not involve Chancellor Pradeep Khosla in any way, nor was it discussed at any HCL meeting that Chancellor Khosla attended."

A follow-up statement sent this week from Piercey also pointed out that "HCL Technologies is a separate legal entity with a distinct board of directors for the company. UC San Diego Chancellor Pradeep Khosla has no association with HCL Technologies, its board of directors, or its development of service contracts with any industry or health care system."

"Both HCL Technologies and HCL Infosystems Ltd. are companies created by Shiv Nadar, founder of HCL. Each is a separate legal entity with distinct boards of directors," Piercey said.

In response to a question about the board memberships and what constitutes a conflict of interest, University of California President Janet Napolitano's office responded this week in a brief email with a link to the university's recently revised conflict of interest rules.

Among the new things the university plans to ask for in its revised policy is that faculty who engage in outside activities provide a “justification letter" that includes “a paragraph or statement describing benefits that accrue to the University for the service being requested.”