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(Rate Your Students)
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and Soltan isn't. For the life of me, I can't figure out her
politics, but she's pretty fabulous, so who gives a damn?"
(Tenured Radical)

Tuesday, December 07, 2004

QUESTION:


How Many Harvard Money Managers
Does it Take
To Pay Off 35 Million Dollars
In Breach of Contract Damages
Against Harvard?



ANSWER: One.


Readers may recall the ongoing very expensive scandal at Harvard involving a now-defunct group of professors who advised the Russian government on privatization a few years ago (see UD post titled "This Here's a Big Ol' Russki Oil Platform," 6/30/04), even as some of them were making a killing on investments in that country that seem to have been directly linked to the knowledge they were gaining from said advisory role.

The federal government, which had given this group of professors major sums of money, got wind of the conflict of interest and is now suing the hell out of Harvard and assorted advisory group members for return of the money.

This is a slow-moving, intricate tale involving many people and institutions and trials and motions and settlements over many years. The Harvard Crimson yesterday updated one chapter:



"In June, [a Harvard professor and a Harvard employee] were found liable for fraud arising out of personal investments made in Russia while they advised the privatization program.

Under the second charge of fraud, [the professor] could also be found liable for violating the conflict-of-interest provision in USAID’s contracts with the Harvard Institute for International Development (HIID).

[Both men] could .. face triple damages of up to $104 million arising from their liability under the False Claims Act, although the damages — to be assessed at a later trial — will likely be a fraction of that amount.

The University was cleared of fraud charges in June but still faces breach-of-contract damages of up to $34.8 million, the amount paid out under the two USAID contracts after the improper investments began in 1994."



UD has done the math and has a suggestion to make to Harvard should it indeed become liable for the $34.8 million (the faculty member and employee are asking Harvard to pay any penalties they get as well, by the way). In another earlier post (UD, 10/17/04, "Wag the Dog"), UD noted the ongoing public relations disaster at non-profit Harvard concerning revelations that its money managers are routinely paid up to 40 million dollars a year ...

See where I'm going with this? It's a bold suggestion ... unorthodox, to be sure ... but what if Harvard very tentatively approached each of its money managers about taking a wee cut in compensation?

"Boys - it's getting to be an embarrassment ... The university's president earns the equivalent of two lunches per year for each of you ... Could you see your way clear to coughing up, say, a million apiece?"

Another way to go would be for Harvard to seek out one samaritan among the group - someone willing to make a one-time donation of thirty out of his forty million yearly compensation toward the resolution of the problem. This would be a huge sacrifice, and whoever was willing to submit to it would have the satisfaction of being regarded by all Americans as a Christlike figure ...