… reveals the key to a successful business career: Spend your entire life in courtrooms. You’ll loot your businesses, of course; that’s how you make big money. And individuals, workers, the government, what have you, will sue you. They will sue you again and again.
And they will win, because after all you do seem to loot or defraud or whatever your businesses. And you’ll have to pay out hundreds of millions of dollars in fines and compensation.
But do not worry, because
1. you’ve got plenty of money left over after you pay out the judgements; and
2. you don’t give a shit about bad publicity.
That’s it, kiddies! The business philosophy of your benefactor. Inspirational.
Another day, another lawsuit.
Background here.
… Richard Joel steps down as president, leaving this junk bond status entity to … Well, what does University Diaries live for but to watch universities implode? Let’s see whether Zygi Wilf, for instance, transfers his attentions from running the Vikings to running Yeshiva, where he is already a trustee.
… just after one of its trustees, Bernard Madoff, hit the headlines. It’s from the University of New Hampshire.
The top of the page announces a Bias-Free Language Guide, while the rest of the page is blank. Eloquently, poignantly, totally blank. As blank as all the YU Madoff pages suddenly became.
Where’s the Guide?
What story lies behind this latest weird visual outcome?
No, don’t try clicking on Bias-Free Language Guide. Won’t take you anywhere. It’s been scrubbed.
Wha’ happened?
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We don’t know enough yet to figure out exactly how the thing got written – I mean, we need to know precisely what group of people (students? faculty?) wrote it – but it takes the Orwellian business of replacing short clear simple descriptive words with long pretentious empty euphemisms to new heights.
One section warns against the terms “older people, elders, seniors, senior citizens.” It suggests “people of advanced age” as preferable, though it notes that some have “reclaimed” the term “old people.” Other preferred terms include “person of material wealth” instead of rich, “person who lacks advantages that others have” instead of poor and “people of size” to replace the word overweight.
I think they fell down on that last one. It doesn’t have enough words. People of larger size than other people, no?
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When David Ortiz called Jacoby Ellsbury a rich bitch, he managed to squeeze out only two words. Person of material wealth bitch is so much… richer.
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Instant Update: Wow. In the few minutes during which I’ve been writing this post, UNH disappeared Bias-Free Language Guide and replaced it with Page Not Found. Quick work!
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And again.
Morris Talansky: Yet another glorious chapter in the history of the board of trustees whose members include Bernard Madoff, Ezra Merkin, and Zygi Wilf (Wilf remains a board member).
Embarrassing. But at least Yeshiva’s finances are in order.
It’s pretty much the same process at any university that loses accreditation (both of these universities are distinctly heading that way), loses its financial base (both are Moody’s basket cases), loses alumni donations (SCSU never had much of that, but Yeshiva did, and it’s losing it), and loses students (enrollment is tanking at both schools). If you want to know how to drive your school into the dirt, you can learn the procedure at almost any failing or failed university. A few schools (Sweet Briar) shut down because of market or demographic forces they really can’t control (very few women want to go to single-sex schools), but the overwhelming number of institutional collapses of the sort Yeshiva and SCSU are undergoing display the same mix of factors. Let’s review them, using as our focus this account of the latest developments at Yeshiva.
UD used to think that boards of trustees were pretty pointless – rich businesspeople overseeing, in a vague way, the activities of a university, but, basically, above all, and ever and ever, being called upon to transfer huge chunks of their personal fortune over to the place. Indeed this non-interventionism might be more or less the way things are at high-functioning schools… Maybe you’ll find one or two trustees who actually do understand universities, and who actually have a meaningful relationship with the school’s president… At happy roly-poly little sports factories like Auburn you’ll find one or two trustees (they played for the team back when) actually setting admissions policies and sticking their noses in recruitment, but this form of corruption doesn’t push the school in the direction of collapse. You can’t collapse a school that’s already, like Auburn, an intellectual joke. And it can in fact be perfectly serviceable to have a BOT made up of clueless sheep herded by a brilliant Babe.
Most BOT’s, in other words, don’t amount to much in the smoothly running institutional scheme of things; they’re like US ambassadors to Malta. How badly can they fuck up? You don’t want the person you appoint ambassador to Malta to be ambassador to Afghanistan; for Afghanistan, you need someone who knows how to be an ambassador. For Malta, a rich donor to the current President’s campaign will do. For trustee, a rich donor to the university will do.
But it turns out that a truly depraved board of trustees can bring down a school. Truly stupid, self-serving, self-righteous, risk-taking cronies of the sort Yeshiva and SCSU boast can take an already vulnerable campus and pound it into the dirt.
The key is greed and secrecy.
The key is assembling a group of male buddies (if you want total destruction, the more men the better), many of whom are in each others’ pockets financially, none of whom knows or cares anything about universities as such, and all of whom think they’re doing the lord’s work – for race, for religion, for class. Schools that implode tend to be fantastically parochial. Their trustees are fantastically parochial people, ignorant of much beyond their particular political or spiritual orthodoxy. These trustees routinely bring on board characters like Jonathan Pinson and Bernard Madoff and let them run the show because hey Jonathan! Bernie! My man!
So now your trustees are hard at work stealing the school’s endowment while, one by one, being very publicly carted off to prison or court – a carting off that really does very little for your school’s reputation and its alumni loyalty. For president at this point you have one of two types: The twelfth deer in the headlights you’ve hired in twelve days (the board merrily ignores this person) or just the opposite – a loyal long-serving crony-servant.
The process of destruction is now so bad at Yeshiva and SCSU that the faculty is routinely voting no confidence left and right… But another problem with BOTs of this sort is that they do not know that the faculty exists. What does a faculty do? Students they get – students go to concerts and games and students provide the money the BOT misappropriates. Students, yes. Faculty? So this sort of BOT/university president essentially does not communicate with faculty. Their relationship to faculty is restricted to firing most of it when the BOT’s years of malfeasance destroy the school’s credit rating and they can’t borrow any more money.
“It’s the time of year when we put the schedule together, and we realized we were paralyzed because we didn’t know which faculty would be around,” said [Gillian] Steinberg, an associate professor of English and director of writing at YC. “The administration won’t tell us who will get a contract renewal.”
She can’t take it anymore; she’s leaving Yeshiva.
Then there are the students. You can see Yeshiva cultivating a good longterm relationship with them as well.
According Yadin Teitz, a junior at Yeshiva College who has been leading student efforts to get information from the administration, the “administration operates without consulting the faculty.”
“There’s no connection between what’s going on at the top and at the bottom,” Teitz, an editor at The Commentator student newspaper, told The Jewish Week. Teitz’s March 3 article was the first time students, and many faculty members, found out about cuts being made to the core curriculum.
“There’s no transparency,” said Teitz, who said it was “crazy” that faculty members had to find out about cuts to their own programs through a student newspaper.
Exactly the same at SCSU. You’ve basically got a semi-criminalized sect sequestered in a building somewhere on campus, working feverishly to continue bleeding what money they can out of the institution before it utterly bleeds out.
… Meltdown.”
That being the case, this letter from the trustees to that school’s students is the very definition of chutzpah.
Having royally fucked the now junk-rated school through greed and irresponsibility, its trustees turn around and lecture its students.
Sometimes change can create concern. But the fact is that change needs to be embraced, and change provides an opportunity to make improvements in our structure, and in the way we support the needs and aspirations of our exceptional students.
Don’t be scared, boys and girls! We were nervous before we invested all that money with Bernard Madoff and Ezra Merkin, but we had the courage to do it! And that was only one of the practically criminal financial risks we took with your money! Make us – epitomized by the most high-profile among us, Zygi Wilf – your model of personal behavior!
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Let UD just say this for the record: If she were a Yeshiva University student, professor, or graduate, she would have serious anger issues.
It’s official: We can add Rennert’s name to fabled YU benefactors like Bernard Madoff, Ezra Merkin, and Zygi Wilf. Today the man who endowed YU’s Entrepreneurial Institute (it’s named after him), has been found guilty of looting one of his companies. But he did it in a good cause!
[The jury agreed that] Rennert [was] a willfully negligent tycoon who looted MagCorp to subsidize [his] sprawling Hamptons estate while turning a blind eye to pollution [the EPA’s suing him for the pollution; this trial verdict was just for the looting]. [The] Brooklyn-born billionaire’s Italianate home boasts a 164-seat theater, 100-car garage and 39 bathrooms, and is valued at $500 million.
What an inspiring entrepreneurial example for the eager young business students at the Rennert Entrepreneurial Institute! A junk bond campus whose business philosophy comes straight from Ira Rennert! And don’t forget – Yeshiva is a religious institution.
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There’s Rennert Hall at Columbia University and the Rennert chair in finance and entrepreneurship at New York University. There’s also the Rennert Entrepreneurial Institute at Yeshiva University and the Rennert Mikvah, a ritual bath, at the Fifth Avenue Synagogue, where he’s an honorary chairman.
Hm. Those ritual baths have been awfully pesky lately… If they’re not being overseen by someone filming naked women, they’re being named for looters…
No less a person than Jonathan Sacks, who calls himself a “moral voice for our time,” is the Rennert Professor of Judaic Thought at NYU.
UD is going to guess that it’s not going to bother the moral voice that he’s bopping along on … uh… let’s be delicate and call it breach of fiduciary duty money…
With the help of a researcher at the National Center for Education Statistics, the [Jewish Daily] Forward identified six universities with characteristics similar to Y.U. — private, not-for-profit, four-year universities with high research activity and a student body size similar to Y.U.’s.
Among those schools, Princeton, Dartmouth, Brown and Brandeis universities more than doubled their endowments between 2003 and 2014. Rice University’s endowment grew by 88%.
One other school, Rensselaer Polytechnic Institute, which has struggled financially in recent years, saw its endowment grow by just 29%.
Since [Richard] Joel took over Y.U. in 2003, Y.U.’s endowment has grown by 20% overall.
Put yeshiva in my search engine to discover the myriad causes of this amazing outcome.
Although unfortunately in Yeshiva’s case, this means its appalling Moody’s rating – B3 – is affirmed as unchanged.
In the wake of expensive scandal after expensive scandal, some of it having to do with the fallout of the sort of conflict of interest you get when your virtually all-male, all-buddy board of trustees has its fingers in each others’ hedge funds (I’m looking at you, Bernie Madoff and Ezra Merkin), Yeshiva threatens to collapse as a viable financial entity, which Moody’s couldn’t help noticing.
Given the severity of deficits and limited liquidity, the university may exhaust liquidity before completing a restructuring of the organization.
On the up side, Yeshiva’s president, who so far has dealt with the Madoff scandal, the conflicted board of trustees scandal, and the financial collapse by literally trying to airbrush Madoff from Yeshiva history, ignoring alumni begging him to alter the board of trustees, and denying any financial difficulties at the school, has finally decided to drop a hint or two of trouble.
In a recent interview with The Commentator, a Y.U. student newspaper, [Richard] Joel blamed the university’s deficits on a “lack of effective and adequate reporting and controls.”
… He added that some department heads lied about the financial health of their departments.
Well, when the head of your school can sometimes be less than forthcoming, you’re likely to conclude that you can … dance around a little bit too…
… faculty member, brings yet more notoriety to that notorious campus, home of Bernard Madoff, Ezra Merkin, Zygi Wilf, and a whole cast of other conflict-of-interest-mad characters. Yeshiva University has for some time been American academia’s highest-producer when it comes to both sexual and financial scandal, and now, with the ribald rabbi and his radio, the school is definitely maintaining its record.
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But then Modern Orthodoxy just seems to roll that way.
If the allegations against Freundel are true, they confirm the worst suspicions about the status of women in Orthodoxy: that the all-male rabbinical clubs support their own members in their efforts to control women’s bodies all the time. Freundel, after all, is suspected of using his authority to grab what he wanted from unsuspecting women.
… The award-winning film “A Tale of a Woman and a Robe,” by the Israeli filmmaker Nurit Jacobs Yinon, painfully demonstrates how the experiences of female converts in the mikvah violate their most basic dignity. Three male rabbis watch every woman dunk in the water, as she is naked except for a robe or sheet separating her skin from the rabbis’ eyes. Some rabbis interviewed in the film — including the Israeli modern Orthodox rabbis David Stav and Beni Lau — admit that this practice is humiliating for women, but describe their own helplessness in changing the practice.
… So did Orthodoxy make Freundel a sex offender? Not directly. But it enabled him. Orthodoxy creates an awfully comfortable place for men with sexist and misogynistic predilections and is built around a tight posse of men willing to support each other no matter what the crime.
Same tight posse of men works the Yeshiva University financial magic.
… you don’t want to look too closely at some of your biggest donors (Steve Cohen, Zygi Wilf).
UCLA‘s biggest donor is also kinda grody – but in a very Hollywood way [scroll down for Colbert Report segment]:
Best of all of these guys is California media mogul David Geffen… ‘These are designed to look like garage doors… But … they’re actually sealed shut.'”
All pretend! But law-abiding ordinary people, Geffen knows, assume they’re real. And therefore the dupes obey the… law…
But then, you also get to contemplate the glorious history of other Yeshiva trustees besides Zygi Wilf, like Bernard Madoff and Ezra Merkin, if you go to Yeshiva University.
Yes it’s a fine school, a religious school, and you know that “religious” means a finer moral compass…
But wait… What’s this headline?…
The Broken Moral Compass of Vikings Owners Mark and Zygi Wilf
This morning, after seeing which way the wind was blowing, the Wilfs released another statement, finding other principles that allowed them to cave in to the backlash against the Vikings. After “further reflection” and input they “appreciate and value” from the community – not to mention the loss of sponsors such as Radisson and Nike pulling AP jerseys off its shelves – they suddenly realized getting Adrian Peterson away from the team was actually what he wanted: “Adrian emphasized his desire to avoid further distraction to his teammates and coaches while focusing on his current situation; this resolution accomplishes these objectives as well.”
Meanwhile, back in New Jersey, the Wilfs continue to stall, delaying payments to the two partners who sued them in 1992. Apparently, 22 years is not quite enough “due process” for the Wilfs, who were already upbraided by the judge in uncommonly harsh language, when she found against them and said they acted with “bad faith and evil motive.” Nevertheless, the Wilfs have engineered yet another delay in paying the nearly $100 million ($84.1 million in damages plus $15.1 million in attorneys’ fees) for what the Star-Ledger describes as having “cheated their partners … for more than 20 years.”
Yeshiva University: Its main accomplishment in the last few years has been avoiding legal responsibility for what everyone agrees was decades of sexual abuse of their high school students. Now there’s something to be proud of! Meanwhile, there’s the likes of Zygi Wilf on their board of trustees; there’s the school’s abysmal Moody’s rating…
By Yaacov M. Gross.
[President Richard Joel] offered a small statistical comparison between the performance of YU’s long term investment pool since 2002 versus that of all other university endowments over this period. The comparison purports to show that the compound annual growth rate over the period was 6.3% for YU’s pool vs. 5.3% for the other university endowments, meaning that YU’s investment strategy produced superior results. But a close reading of the comparison raises disturbing questions. For example, why was 2002 chosen as the starting point for the measurement as opposed to fiscal year 2005 (the year in which, according to the article, YU’s current leadership assumed control of the portfolio and sold off more than half of the endowment’s conservative investments)? Why was the comparison made to the endowments of all other universities rather than to peer university endowments with over a billion dollars? Finally, and most troubling, the comparison is based on YU’s “long term investment pool”, which in President Joel’s words, “includes the endowment”, but apparently includes other things as well. What are they? And why didn’t President Joel just offer a simple apples-to-apples comparison between YU’s endowment and other peer endowments? The answer, not surprisingly, is because that simpler and more honest comparison would have told a very negative story: according to the NACUBO Endowment Study used by President Joel, in 2005-2013, YU’s peer endowments grew by a compound annual growth rate of 5.6% while YU’s endowment grew by only 0.37%. That’s less than the inflation rate over this period.
President Joel’s attempt to reframe the discussion as a comparison of returns is also fundamentally mistaken because the proper benchmark for a portfolio’s performance is not its nominal return but rather its “risk-adjusted” return. Riskier portfolios often produce higher results to compensate for their higher risk profile — but does that mean that YU should invest its entire nest egg in a high-risk portfolio? Ultimately, that’s the question — not a comparison of nominal returns – that needs to be addressed when examining whether YU’s leadership was reckless with its endowment money. And President Joel’s response speaks to only one small aspect of YU’s financial performance discussed in the article; he does not address, for example, YU’s massive operating deficits which, according to Moody’s, may cause YU to run out of cash next year.
We have indeed fallen very far when the President of YU responds to an article claimed to contain “half truths and inaccuracies” with his own half truths and inaccuracies. But it did not have to be this way. President Joel could instead have offered a full accounting to the community of the decisions that were made and why … He could have openly acknowledged such mistakes as were made, the lessons learned, the corrective steps being undertaken. He could have laid out a roadmap for YU’s recovery. Like the [initial] article, he could have offered facts and figures. And he could have said, “I recognize that I will have to ask our staff, students and supporters to make painful sacrifices, in part due to decisions that I helped make. Therefore, I am tearing up my employment contract, which under the current circumstances is inappropriate, and will continue to serve as President only for as long as the board wants me and with compensation that is determined by the board to be commensurate with my efforts and accomplishments.”
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A comment on the Failed Messiah blog:
[D]oes he take us for fools? If there’s no problem, why has Moody’s steadily downgraded their debt and issued warnings? Why is YU frantically selling off many apartment buildings? Why no mention of the approx. $400M in deficits over the last 5 years?
… announces that he “will not engage with the media further in …regard” to the school’s famously terrible financial situation. Everybody’s talking about it.
Further is strange. He has never engaged with the media. And he never will. Yet another winning strategy from an institution full of winning strategies.
He will, however, whisper, just in the ear of Yeshiva insiders, just for their sake, that Yeshiva is great, fine, rolling in dough, very very fiscally prudent. Couldn’t be better.
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CBS: “A university spokesman declined CBS 2’s interview requests, but issued a statement claiming inaccuracies in Weiss’ report. It wasn’t specific.”
There goes President Richard Joel earning his salary again.
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Though he clearly wasn’t hired for his math skills.