Monday, March 19, 2007
Princeton Screws Up, May Have To Pay Hundreds of Millions
Glenn Reynolds of Instapundit (see blogroll at left) has described this situation as an academic Enron. In about as dry a response as you can get, Princeton responds. Let me know if you can stay awake through the whole thing and if, after reading both, the suit seems to you like it has merit.
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2 comments:
It sounds like the Robertson heirs got greedy.
The board was run informally and with no problems until a new generation of Robertson heirs took their place on the board.
Princeton did get a little "flexible" when using money to support departments that were related to the Woodrow Wilson school.
The charter of the foundation says:
"to establish or maintain and support at Princeton University, as part of the Woodrow Wilson School, a Graduate School, where men and women dedicated to public service may prepare themselves for careers in government service, with particular emphasis on the education of such persons for careers in those areas of the Federal Government that are concerned with international relations and affairs; [t]o establish and maintain scholarships or fellowships, which will provide full, or partial support to students admitted to such Graduate School; and [t]o provide collateral and auxiliary services, plans and programs in furtherance of the object and purpose above set forth"
Even if the Robertson family won control of the foundation, they would still be legally obligated to fund the Woodrow Wilson school.
The lawsuit all started when the board decided to hire profession managers to manage the fund since its value had significantly increased. The guy who brought the lawsuit, didnt want to give up investment control.
He gets pissed, seizes on the informal way the Fund had been ran, brings a lawsuit.
If he wins, he can manage the fund himself and pay himself for it.
If the stated function was to endow scholarships in the School of Foreign Affairs and was instead shifted to other programs, then the university is in default. It's a contract pure and simple and Princeton overstepped in order to supply funds to students that weren't in that division. Hey, it's their money,if the A&P heirs prefer that it be used as stated rather than applied willynilly, then that is their call. I know a number of schools that would gladly accept such funding and apply it as defined. It's time for universities not only to be transparent in their budgets, but to be accurate in their disperals. I am tired of hearing of deserving kids who work two and three jobs to fund their education and still get good grades when slackers get free rides based on factors that have nothing to do with education such as ethnicity, religion or athleticism. Princeton should be ashamed of using funds for purposes other than those set by the foundation.
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