California has begun a broad investigation into circumstances related to the controversy over a scheduled speech by Sarah Palin at California State University-Stanislaus, the attorney general's office announced late Tuesday afternoon. Hours earlier, two Cal State-Stanislaus students disclosed that they had found pages from what appears to be Ms. Palin's closely held speaking contract in a campus trash bin, and delivered the documents to the attorney general's office in Sacramento.
Stanislaus officials hired Ms. Palin, the Republican nominee for vice president in 2008, to speak at a $500-a-plate fund-raising gala in June. The speech is part of a 50th-anniversary celebration for the campus, which is in Turlock, about 100 miles east of San Francisco in California's Central Valley. But the event has drawn the ire of public-interest groups and a state senator after the university declined public-records requests to release information relating to the speech, including Ms. Palin's contract and speaking fee.
University officials have said that a clause in Ms. Palin's contract prevents them from releasing her fee. They have argued that because the event will be held by the university's nonprofit foundation, rather than by the university itself, documents related to it are exempt from California's public-records requirements.
Ms. Palin's fee at other events has been as high as $100,000.
The attorney general, Edmund G. Brown Jr., said his investigation would seek to determine whether the foundation had violated the California Public Records Act and whether it was spending its money to benefit the university. "We are taking this action to make sure that the money raised goes toward the intended educational purposes and not a dollar is wasted or misspent," Mr. Brown said in a written statement.
"This is not about Sarah Palin," the attorney general, a Democrat who is seeking his party's nomination for governor, said. "... The issues are public disclosure and financial accountability in organizations embedded in state-run universities."
That announcement came hours after the students who found the documents appeared at a news conference with State Sen. Leland Y. Yee, who has been pressing the university for information about Ms. Palin's speech.
The students said they became suspicious after seeing employees carrying garbage bags of papers out of the campus's administration building on Friday, which was supposed to be a furlough day. Acting on an anonymous tip, they said, they searched the trash bin and found thousands of university documents, some shredded, and Pages 4 through 9 of what they said was Ms. Palin's speaking contract, intact.
The portion they found did not include her fee but did specify other details, including a first-class flight from Anchorage, three hotel rooms, and bendable straws at the lectern.
Senator Yee, a Democrat and frequent critic of California university administrators, called the Cal State-Stanislaus incident "our little Watergate" and accused the university of destroying records to avoid supplying information in response to public-records requests.
"This is in fact a dark day for the CSU, particularly the Stanislaus campus," Mr. Yee said, standing in front of mounds of shredded documents. "I never thought that I would have to relive Watergate again."
In a short statement released later Tuesday, Matt Swanson, president of the foundation's board, did not respond directly to Mr. Yee's accusations but said, "It's a dark day when an entity that's sole purpose is to raise money for student services and university programs is falsely accused of wrongdoing."
Mr. Swanson did not respond to the attorney general's announcement.
Stanislaus officials did not comment on Tuesday. Susana Gajic-Bruyea, vice president for university advancement, wrote in a letter to the campus last month that private donations were paying for Ms. Palin's speech, and that her star power would be critical to making the event a financial success.
"Not a cent of state funds will be used for this event," Ms. Gajic-Bruyea wrote. "However, the proceeds from the event will go toward supporting the university."
Californians Aware, an open-government group, said on Tuesday it would sue the Cal State system this week in order to establish that documents held by university foundations are subject to state public-records laws. "We believe that under the Public Records Act, the public has a right to look over the shoulder of public officials," said Terry Francke, the group's general counsel.