… because of that school’s perceived inadequate response to the Hamas atrocities, you know how this blog — which for years has condemned anyone giving anything to an institution currently hoarding close to fifty four billion dollars — feels. Same goes for other obscenely overendowed Ivies. If this event helps narcissistic hedgies discover legitimate uses for their charity, tant mieux.

Pablo Eisenberg, a hero of this blog (UD has forever shrieked at super-icky moneybags who give their hundreds of millions to Harvard), has died.

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(By the way — Harvard’s current endowment woes – it has only just reached 53.2 billion dollars – have energized its alumni network to organize a massive, unprecedented, Save Our School campaign, with outreach via Go Fund Me pages in addition to traditional methods. “Our rainy day fund is down to 10.5 billion,” warns Sam Bankman-Fried, an MIT grad who nonetheless accepted a position as head of Harvard fund-raising because “Harvard is the lifeblood of Cambridge; when it goes, the city itself is imperiled.”)

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And as to how to convince people who give their money to Ivy League schools, rather than to the sort of places Eisenberg lists in my headline, to redirect their money… Well, you need to understand the cohort you’re talking about, first of all.

Let’s consider, for example, billionaire investor Marc Wolpow, who gives money to fat cat Wharton. What do we know about Marc?

Here’s our most recent information.

The wealthy head of [a] multi-billion dollar private equity firm is under investigation by Nantucket Police and the state Environmental Police for purposefully untying a 32-foot boat from a slip at Old North Wharf, allowing it to drift out of the Easy Street Basin and into the ferry lane. 

The suspect is Marc Wolpow, the co-CEO and co-founder of the The Audax Group, who allegedly found an unknown boat in the slip he uses on Old North Wharf on the morning of Sunday, Oct. 16…

After Wolpow untied it, the boat drifted dangerously past Steamboat Wharf, got pushed northward in the wash of the car ferry the M/V Woods Hole, then collided with the $5 million, 70-foot Viking sportfishing boat “El Jefe” causing damage to that vessel. It eventually ran aground near 22 Easton Street. 

Reached by phone this week, Wolpow declined to comment. 

********************

Here’s what’s shocking about this story:

1 Just anyone reached Wolpow by phone.

2 Wolpow declined to comment.

Why allow just anyone to get past your protection squad and reach you by phone? That’s nuts.

Even more bizarre is Wolpow’s refusal to say the obvious about his behavior.

Heard of property rights, asshole? [“Asshole” here refers to the person who got through to Wolpow’s phone.] It’s my fucking slip, I own it, and I don’t have to look at some cheap shitty boat some person decided to put in it. Do you think I want Nantucket boat owners to think I have a cheap shitty boat? It’s my right to do whatever I like to cheap shitty boats and I think the fucker who put it in my slip will think twice before he does it again. Oh, and fuck you for calling me.

Getting a person of this sort (Marc Kasowitz, Howard Marks, Vinod Khosla, Noam Gottesman, the Heliport Guys, stop me when you’ve had enough) to give money to what he inevitably is going to consider cheap shitty recipients will be very difficult indeed.

Scathing Online Schoolmarm reads the Mark Dreier letter.

Sentenced to twenty years in prison for theft of hundreds of millions of dollars from investors, Dreier “used money obtained from the scheme to support a lavish lifestyle, including purchasing two beach-front homes in the Hamptons valued at about $12.5 million, a $10.4 million Manhattan apartment, a $18.3 million yacht, a 2007 Aston Martin DB9 Volante, [and] more than $30 million in art work … ‘He abused his clients for seven solid years in every way imaginable,’ said Assistant U.S. Attorney Jonathan Streeter at the hearing.”

But he could write. And he wrote a long letter to the judge before sentencing. Let’s take a look at some of it.

And let’s think about what he wants this letter to do. Clearly, he wants a lighter sentence as a result of sharing with the judge his humanity, his motives, his anguish and guilt.

He says at the beginning, “I am writing to give some context to what I did… to try to explain how a person with my background and advantages came to do the unconscionable. Perhaps in learning how I made these terrible decisions which have ruined my life, others may avoid such mistakes. [This is] a warning to others not to follow in my path.”

Dreier indeed had every advantage, growing up in a loving, affluent home and attending the excellent schools in this post’s title. So one is curious to know how a person to whom so much had been given was able to take so much away.

Although he got the wondrous jobs you’d assume, “I was achieving less satisfaction and recognition than I expected. Colleagues of mine and certainly clients of mine were doing much better financially and seemingly enjoying more status. By my mid-forties I felt crushed by a sense of underachievement.”

Well, he’s honest. And he does write well. He tells us quite clearly that although filthy rich and located at the pinnacle of success in New York City, it wasn’t enough. As long as one other person seemed to have more money or status (That ‘seemingly’ is interesting, isn’t it? It acknowledges the pesky, abstract nature of status. By definition, you can never really know, can you, whether other people are enjoying more?), he was crushed.

Again, you have to admire the honesty. But how sympathetic can you be to someone who honestly tells you that his greed is cosmic, infinite, transtellar, surpassing the imaginings of humankind and deity? Sympathy implies the ability to perceive and feel at least a little of the reality of someone else’s emotions, experiences… What he has done is so extreme, so grotesquely bad, that the idea of his mea culpa serving to stop others from the same behavior doesn’t really get off the ground.

“[I felt] overwhelmed by debt, by a disappointing career, by a failed marriage… And so, incomprehensibly, I started stealing.” But it’s not incomprehensible, even if it is impossible to sympathize with it. If we assume a totally amoral, grasping human being, eaten up inside at the thought of any person with more money or status, the crime is perfectly comprehensible. If your bottomless greed sends you into debt despite your earning an enormous salary; if you don’t care about destroying people; and if you care cosmically about being rich and showing off your goods, then you will certainly steal.

“I lost my perspective and my moral grounding; and really, in a sense, I just lost my mind.” We have no indication of any moral grounding ever in this man’s life – he provides none in the letter – so we cannot go with him here. Bernard Madoff’s parents were both crooks; he understood morality, but never cared for it, and probably didn’t know many people who did. It might be the same situation here. Everything points to an amoral, grasping person from the ground up.

And Dreier certainly never lost his mind. He carried out his crimes with brilliant forethought for seven years, and stopped only when the police hauled him in. There’s nothing crazy about stealing from people if you want their money and don’t care about the law, morality, or the destruction of other human beings. “I just wasn’t in control of myself.” But he was. He may have lost control of his scheme as it became more and more complex. But he himself was always – as was Bernard Madoff – under control. Still is. Writes one hell of a letter.

“In some sense, being caught was a relief.” Now we’re starting to have problems with honesty. Not only that, but as the letter winds down the self-dramatization everyone who knows him describes as part of his spectacular narcissism emerges in a damaging way. His final paragraphs are self-pitying, though meant to be poignant. “I have lost all my friends. I have lost my law license, my law firm, and all that I ever owned. I have seen my family suffer the unimaginable.”  Like ‘incomprehensibly’ earlier, this just doesn’t work. Smart guy like this – he certainly imagined this outcome. He  didn’t care. He doesn’t care about people. He cares about money and status.

This is from the letter’s final paragraph: “I don’t know what gives some men the strength of character to lead virtuous lives for all of their lives, and what causes others, such as myself, to lose their way.”

The rhetoric is bracing but unreal. No one leads an entirely virtuous life; it doesn’t really take that much effort to lead the sort of pretty much moral life most of us manage to lead. It takes effort – unless you’re a career criminal – to spend seven years consciously destroying hundreds of lives.  

SOS suspects that this man did not lose his way, because his way was always degeneracy and covetousness — to get biblical about it. SOS indeed suspects that he took some pleasure at the thought of his evil, of what he was getting away with, of how he was making fools of people.

This letter, well-written as it is, would have been better had Dreier admitted that he is by nature and upbringing a thief, that he rather enjoyed his long run, and that the best he can offer at this point is to say that he’ll maybe spend some time in his cell giving thought to that.

With Fran Lebowitz’s words in mind (UD, you recall, interviewed Lebowitz not long ago), let us once again, very gingerly, sidle up to the Sketchy Benefactor problem — the problem with your university taking hundreds of millions of dollars from people who… eh… meh… bleh…

Take Michael Milken. Start with him because he’s local – I mean, local to ol’ UD, because he bought her university a very beautiful building which houses a very fine school of public health, which he also bought for us.

If there is a poster boy for the redemptive powers of philanthropy, it’s Michael Milken. In 1993 the former junk bond king of Drexel Burnham Lambert emerged from a minimum security federal prison after serving 22 months of a 10-year sentence for securities fraud. He seemed a new man — partly because he had abandoned his toupee — and this revised Milken took advantage of his freedom by dedicating himself to giving back. (His finances quickly recovered after he paid the $600 million in fines and restitution; his current net worth is estimated at more than $2 billion.) In the decades since, he has donated consistently and significantly: more than $60 million to teachers and $50 million to George Washington University’s school of public health. His Prostate Cancer Foundation has raised $210 million. There is plenty of evidence that these good works are sincere. Is it also useful? Well, when news of a new SEC investigation into whether Milken’s involvement with Guggenheim Partners had violated his lifetime ban from the securities industry, Milken’s official denial in Fortune magazine read like a recap of his past 20 years of giving.

So no problem with Milken’s name being all over the GW landscape because he paid his debt to society and though in a perfect world we might prefer not to be associated with someone who had to do that in the first place, okay. But what if, while no longer flagrantly stealing, he’s still a sketchy person who when cornered on alleged continued sketchiness points directly at my university and what he gave it in order to exonerate himself?

Yes, GW’s had to deal with sketchy performers and sketchy honorary degree recipients lately; but this is small-time one-off stuff compared to (switching universities here) putting Steven Cohen or Bernard Madoff on your board of trustees or plastering sketchy names all over your most prominent buildings.

I mean… Seton Hall!

Or, staying with Catholic schools here, there’s the lawsuit against Georgetown University for failing to put a donor’s name on a building he bought just because the donor was convicted of insider trading. A long lawsuit between the guy and the university ensued, and if you go to the campus today you can take in the Scott K. Ginsburg Sport & Fitness Center — although, curiously, when you click on the Google link to an article in a university publication titled GEORGETOWN LAW CELEBRATES THE SCOTT K. GINSBURG SPORT & FITNESS CENTER, the connection times out. UD‘s gonna guess they caved, they settled with the guy, they put his name on the building and grimaced through its christening, and then they removed from sight all online references to having celebrated any of this…

Anyway, it’s an old story. Lure of lucre. Lure of respectability. UD only brings it up because of the very strange ongoing latest Caspersen story. The sketchy Caspersen family has a long and important donor relationship with Harvard, and as the alleged actions of the father and now the son tarnish the name more and more, there’s the question of how much tarnishing-by-association Harvard will tolerate. It’s not merely that the Caspersen name is prominent on campus; it’s that in virtually every news article about Andrew Caspersen’s court dates and bail amounts Harvard prominently appears.

You might say Harvard’s too rich and prestigious to care. You might be right. But remember that Harvard is under constant pressure from the government and the media and even from within to account in some way for its immense accumulated wealth. Fighting an ongoing battle against releasing a nickel of its money (this cartoon is out of date; the endowment’s now worth way more than 35 billion) is not made easier by one story after another about sketchy rich people who have helped put Harvard way over the top. In the case of Caspersen’s father, for instance, if it turns out that he did in fact evade taxes on a large scale (this has not been proved; he was under investigation by the IRS at the time of his death), Americans might actually stop and ask themselves why they are both giving huge tax breaks to Harvard University and tolerating donors who are tax evaders. Is zat how Harvard got so rich that the fact of its richness has now become a national controversy? Through ripping us off via tax breaks and then ripping us off again via tax evasions?

University Diaries has long
chronicled the efforts of dozens of
thoughtful people who feel called
to do something about this:

All sorts of people have stepped up
with good ideas about how to stop
one school from hoarding billions
and billions of dollars. Hoarding
them. Not using many of them, for
educational or charitable or whatever
uses. Just sitting on them. Or handing
out huge gobs of them to their
fund managers.

How did the money grow so fast and
get so big? A combination of
tax benefits – “Harvard’s income
from capital gains, interest, and
dividends is all tax free,
and the donations it receives
are tax deductible.”–
and the inexhaustible ego of
hedgies who can’t think of anything
better to do with hundreds of millions
of charitable dollars than throw
them at one of the world’s richest
institutions. That way, they get
their name associated with Harvard.

All sorts of proposals have come
forward, most having to do
with messing up those exemptions,
although a few appeal directly to
Harvard alumni to divert their
contributions to actually worthy causes.

About ten years ago, when people realized
that this non-profit was paying several
of its money managers 35 million a
year, there was an upsurge in outrage
and in proposals for change.
You can type harvard endowment into
UD‘s search engine if you want to track
years and years of reform proposals from
many different people.

As my post’s headline suggests,
none of this reformist activity
has had the slightest effect.
Harvard keeps hoarding what it
has and supplementing it with
hedgie vanity thingies.

*******************

If you’re aware of this history,
you tend to respond to the like-clockwork,
beginning of the academic year,
New York Times op-ed about this
with a certain wryness. You begin to
recognize the ritual by which
Harvard acknowledges the fact of
complaint and bats it down with
the familiar bullshit (Everyone needs
a rainy day fund!) and then the
whole thing goes away for another year.

But anyway. (Deep mournful breath.)
Here’s the latest gesture, this one from
a professor who’s a tax attorney.

“We’ve lost sight of the idea that
students, not fund managers, should
be the primary beneficiaries of a
university’s endowment. The private-equity
folks get cash; students take out loans.”

So (world-weary sigh) here’s the latest
go-nowhere proposal:

“Congress should require universities with
endowments in excess of $100 million to spend
at least 8 percent of the endowment each year.
Universities could avoid this rule by shrinking
assets to $99 million, but only by spending the
endowment on educational purposes, which is
exactly the goal.”

Yes, yes, hear, hear, good fellow.
Jolly good fellow.

***********************

UPDATE:

Some good snark from Malcolm Gladwell.

Yale’s endowment spent $480 million paying its hedge fund managers last year and $170 million on its students.

—————

I was going to donate money to Yale. But maybe it makes more sense to mail a check directly to the hedge fund of my choice.

—————

Why doesn’t Yale spin off its university division and concentrate on its core money management business?

—————

It came down to helping the poor or giving the world’s richest university $400 mil it doesn’t need. Wise choice John!

[John Paulson Gives $400 Million to Harvard for Engineering School

The gift from Mr. Paulson, a billionaire hedge fund manager, is the largest in the university’s history.]

—————-

If billionaires don’t step up, Harvard will soon be down to its last $30 billion.

… in trying to get a grip on the London School of Economics/ Benjamin Barber/ Other Academic Friends of Libya controversy, scandal, whatever you want to call it. Start with a university story that has nothing to do with Libya.

Frank Rich recently wrote, in the New York Times:

[Lawrence] Summers [did] consulting work for [a] hedge fund, Taconic Capital Advisors, from 2004 to 2006, while still president of Harvard.

That the highly paid leader of arguably America’s most esteemed educational institution … would simultaneously freelance as a hedge-fund guy might stand as a symbol for the values of our time. [Summers was] moonlighting in the money racket while running the entire university.

And he was making millions and millions of dollars. At a one day a week job.

He was paid, what, $800,000 or so to be Harvard’s president.

Put aside whether, as Ben Stein suggests, such a beneficiary of Wall Street money could ever, in his government capacity, “crack the whip” against it (“Wall Street knows how to get its hooks into government. This is how the world works. Money talks.”) and ask rather, from the point of view of the university, whether his raking it in while president is seemly.

It’s not unseemly if you regard a university as an institution like any other in a capitalist economy, primarily geared toward generating profits (in its athletic program, in its entrepreneurial scientific work) and generating personal wealth (for consultants to money funds, like Summers, for consultants to wealthy dictatorships and other countries, like Barber, and for university presidents like Shirley Ann Jackson, who sit on corporate boards and earn millions to attend board meetings).

As Barber says, in his defense, “Everyone gets paid.” It’s exactly the same way university presidents defend giving four million dollars a year to football coaches: There’s a market for everything, and everyone gets paid the going rates.

Absolutely none of this is unseemly (I’m not talking, by the way, about the astounding salaries made by presidents of for-profit colleges. These guys are for profit, baby, and you better believe it.) if a university is a corporation with classrooms, run and staffed by people seriously distracted by big money elsewhere. But a lot of people have a nagging feeling that universities are something more. Indeed these people note that our government seems to feel they are something more, since they receive remarkable tax benefits. Some of them are even public institutions (Barber taught at two of these, Rutgers and the University of Maryland), direct recipients of taxpayer dollars. What happens to Americans’ support for non-profit universities when so much that goes on at those places is outrageously profit and personal wealth driven?

The Libya dust-up is only the latest lesson in a gradual education taking place among the American public as to what really goes on in higher ed.