Her resignation came as UC officials released the results of an investigation that largely cleared her of the most serious allegations but found she violated some university policies for filing travel expenses and serving on corporate boards. The investigation also found that Katehi had personally and repeatedly sought out ways to enhance her online reputation by hiring outside consultants, despite her claims to the contrary to UC President Janet Napolitano and to the media.
"The investigation is now concluded, and it found numerous instances where Chancellor Katehi was not candid, either with me, the press, or the public, that she exercised poor judgment, and violated multiple university policies," Napolitano said. "In these circumstances, Chancellor Katehi has now offered to resign, and I have accepted that resignation."
Katehi's resignation marked the end of a seven-year tenure running one of the nation's most prestigious universities. She is being allowed to remain at the school as a full-time faculty member, Napolitano said in a statement issued just before 1 p.m.
The stunning fall from power came two days before the UC Board of Regents was to hold a special meeting at UC San Diego to discuss a personnel matter involving the Davis campus -- apparently to decide Katehi's fate -- and after weeks of pushback by Katehi's lawyer and spokesman about the investigation and suggestions that a lawsuit may be in the works.
Katehi attorney Melinda Guzman said Tuesday that Katehi never intended to sue the university. She maintained that the investigation cleared Katehi of virtually all the allegations, including nepotism and misuse of student funds.
The main strike against Katehi, Guzman said, was a "miscommunication" with Napolitano over how much involvement Katehi had in the hiring of firms paid to clean up UC Davis' and Katehi's online images after the 2011 pepper-spraying of students by campus police.
"Let's be clear, the investigators did not reach a conclusion with regard to whether there was misleading or untruths," Guzman said. "They were very clear on that. The question was whether she may have minimized her role in the social media contracts."
Investigators hired by UC from the Orrick, Herrington & Sutcliffe law firm found Katehi's use of image-enhancing firms was much more extensive than previously revealed, with the university paying out more than $407,000 to three companies to improve her image and the university's in online posts. Documents previously released through Public Records Act requests tallied $175,000 paid to two firms for the endeavor.
The efforts included creating a LindaKatehi.com webpage, editing her Wikipedia page, creating a blog for her and seeking ways to counteract negative newspaper stories by offering up opinion pieces to Sacramento business magazine Comstock's that "will beat out negative Sacramento Bee articles," according to documents released Tuesday.
"The evidence gathered indicates that Chancellor Katehi minimized her knowledge of and role in certain social media and strategic communications contracts in her discussions with President Napolitano and the media," the investigators concluded in a 106-page report that was accompanied by 351 pages of exhibits.
"During these conversations, Chancellor Katehi conveyed the clear impression that she knew nothing of the contracts and that she was not involved in them," the report found. "The Chancellor's statements were misleading, at best, or untruthful, at worst."
Katehi, the report found, "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."
One former aide told investigators that "Chancellor Katehi's paramount concern seemed to be her own reputation, not the school's reputation," and that she repeatedly asked him, "Why can't you get me off the Google?"
Guzman said Katehi was not ready yet to speak publicly, but Katehi issued a letter to the campus in which she declared that she had been cleared by the probe.
"The investigation regarding these allegations has been completed, and the investigators have confirmed that as to material allegations concerning my service to this institution, I did not violate UC policies or laws," Katehi wrote.
Katehi also maintained that she never meant to mislead Napolitano when asked about the hiring of the social media firms. "I have never intended to mislead the President or anyone concerning my knowledge or role in these contracts," she wrote.
Katehi was cleared of any allegations of misusing student funds, and investigators found that while she was somewhat sloppy in following travel reimbursement policies, "it does not appear that Chancellor Katehi personally profited, or that UC Davis suffered a financial loss."
The report was critical of Katehi for not following through on her promise to set up a $200,000 scholarship fund for students after she was criticized for earning that much from stock proceeds she received while serving on the board of a textbook publisher. Katehi's spokesman said after she was suspended that she was withholding the money while the probe went on, and the report said that "could have an impact" on her credibility and leadership with the campus.
She also was criticized for a lack of "meaningful due diligence" before she accepted board seats from DeVry University, which was being investigated by the federal government at the time; and King Abdulaziz University in Saudi Arabia, which the report noted was allegedly trying to boost its reputation by "paying renowned academics to 'affiliate' " with KAU.
The report also found that when controversy erupted over the DeVry appointment, Katehi told Napolitano "that she had not yet begun her service on the DeVry board, which was untrue." Katehi had attended DeVry-related events in Chicago and Florida "just two weeks before her conversation with President Napolitano," the report found.
The investigators reported that "there is no evidence that Chancellor Katehi retaliated or threatened retaliation" against employees who cooperated with the investigation, which included interviews with 55 individuals, the compilation of 2,669,217 emails and documents and a review of more than 67,000 emails and other electronic documents.
Katehi had faced questions about her family members working at UC Davis, including her husband, son and daughter-in-law, but the investigators found that Katehi did not attempt to mislead Napolitano about their employment and that she "honored the letter and spirit of the near relative policies and agreements" at the university.
Guzman said Katehi's husband, son and daughter-in-law will remain in their positions at the university.
Katehi, a prominent engineer, will "resume her position as a member of the distinguished faculty and as chancellor emeritus," Guzman said.
The chancellor said in her letter that "a time comes when we aspire to go back to where our roots are."
"Being an academic who loves teaching, and seeks to always innovate, I am very happy to go back to what I always have aspired to be, a faculty member," she wrote. She added that she has "every intention of proceeding with a gift to the university to benefit students."
Katehi, who has been living in the chancellor's house on campus, has until Oct. 31 to vacate, said UC spokeswoman Dianne Klein. The campus currently is overseen by acting Chancellor Ralph Hexter. Napolitano said he will remain while a national search is conducted to replace Katehi.
"Today's news ends a period of uncertainty at UC Davis," Hexter said. "The resolution announced by President Napolitano permits us to focus all our efforts on moving the campus forward so that we can serve California, the nation and the world ever more effectively."
Her resignation ends an era during which UC Davis set new marks for fundraising and ambition, and during which the campus extended its influence into Sacramento with plans for facilities in the city.
But it also marks the end of a turbulent period that brought worldwide condemnation to the school after campus police pepper-sprayed student protesters and widespread ridicule after revelations that social media firms had been paid to, in essence, scrub the internet of negative postings about UC Davis and Katehi.
"With Chancellor Katehi's resignation, a sad chapter has come to an end," said Assemblyman Kevin McCarty, a Sacramento Democrat who called for her to step down last spring following revelations that she had accepted board seats with the for-profit DeVry Education Group and with textbook publisher John Wiley & Sons.
"UC Davis can now move forward and be known for what they're best at: rigorous academics, world class research, an innovative medical center in Sacramento, and an active student body."
Sacramento Mayor Kevin Johnson, who had asked a local crisis manager to help Katehi weather the controversy, Tuesday called her "a game changer for this region."
"Linda brings vision, energy and a bold agenda to UC Davis," Johnson said. "She is a crucial partner to the city and always steps up whenever called upon. Her leadership will be missed, but the impact and legacy she left remain."
Katehi had many supporters among faculty, as well as Sacramento's business and political leaders, but she lost support among students and others following the revelations about her stewardship.
At the campus Tuesday, the usual relaxed summer mood quickly changed as word of her resignation spread.
Matthew Vernon, assistant professor of English, said he was relieved, though surprised, to hear of the news. "It's good that there's clarity to the leadership," he said in his Voorhies Hall office.
Many faculty, staff members and students declined to talk about Katehi's resignation.
But at the John D. Kemper Hall of Engineering, professor Stephen Lewis expressed dismay at the turn of events. "It's a very big disappointment," said Lewis, a professor of electrical and computer engineering who has served the school for 25 years. "She raised a lot of money at a time when the state is not funding us."
Most importantly, Lewis said, he felt that the campus was headed in the right direction under Katehi's watch, noting that she made "tremendous choices for leadership positions below her" like deans and vice chancellors.
Lewis had been hoping Katehi would return, though he acknowledged those prospects seemed dim.
"We're disgusted by the whole episode," William Casey, a chemistry professor, wrote via email. "People send their kids to UC in order to be part of something noble, not to watch tantrums among executives. Those families have an average income of $76,000 a year. UC leaders should do better for them."
Katehi's troubles were magnified during the spring by a five-week sit-in by students outside her office. One leader of the effort said Tuesday that students had planned new protests if action wasn't taken to remove Katehi.
"I think it's unfortunate that she has taken so many resources away from the campus in order to get to this point," said Emily Breuninger, one of more than 30 student protesters who occupied Mrak Hall in April. "She basically turned UC Davis into her little money-making machine."
"She should have done the honorable thing and resigned when Janet Napolitano asked her."
Breuninger said the students had been considering additional protests because the promised 90-day administrative leave had expired and they had not heard from officials at the University of California. But they have no plans to disband.
"Moving forward we are going to push at having more of a say who the next chancellor is," she said. "I think the push is to keep the momentum going and trying to democratize the process. They have to take students and workers into account."
©2016 The Sacramento Bee (Sacramento, Calif.), distributed by Tribune Content Agency, LLC.
