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Saturday, March 25, 2006
Players UD's old friend Janine Wedel was arguably the first to expose the profound corruption of Harvard's Andrei Shleifer, and UD has been waiting for Janine to weigh in on the story as it develops. She's now done so, in today's Boston Globe, in a beautifully written, devastating opinion piece. Repeatedly and correctly calling Shleifer a "player," a "peripatetic" character who was able to take advantage of "relationships between governments and contractors that are too tenuous, flexible, and ambiguous to be genuinely monitored," she captures more powerfully than anyone else so far has the sordid nature of his role: Shleifer [...] played sometimes indistinct and overlapping roles as he lobbied in favor of his projects and advised both the United States and Russia while making investments for his own personal gain, all the while presenting himself as independent analyst and author. The endowment funds of both Harvard and Yale gained access to valuable investments through networks inhabited by Shleifer and/or his currency-trading wife. His investments in Russia, which he does not deny, included securities, equities, oil and aluminum companies, real estate, and mutual funds -- many of the same areas in which he was being paid to provide impartial advice. The opening paragraphs of Wedel's Globe piece are the most devastating of all. They place Shleifer's Russian games in a broader, much more destructive, context: [T]he strange saga of Harvard's involvement in US aid to Russia in the 1990s is more than a scandal about Summers and Harvard. The case illustrates the overall failure of the US accountability system.... [It illustrates] the web of interconnections that enabled Harvard economist Andrei Shleifer, a friend of then Treasury official Lawrence Summers, and a close-knit group of Russians and Americans to largely shape US economic aid policy and Russian economic "reforms" while managing virtually the entire nearly $400 million US flagship economic aid project. Summers helped Shleifer and Harvard gain noncompetitive government awards through arrangements that were highly unusual in foreign aid contracting at the time, according to US officials. Wedel concludes: "While Shleifer must pay a settlement and legal fees, it is too late for the Russian people, who, instead of wise guidance, got corruption and a system wide open to looting." Notice that Harvard's gigantic endowment fund made out like a bandit because of Shleifer's corruption. It's bad enough that a university just sits there with $26 billion and growing. It's far worse that it gained significant elements of it through self-serving that makes Czar Nicholas look benign by comparison. |