If the model of “the buck stops here” applies to this situation, then the buck stops not at the president’s office but at the board level. Yet I have not heard one board member state in effect, “I offer my resignation,” in order that Baylor might move forward from this with integrity and transparency. Instead, they tarnish the reputations and accomplishments of others and point the finger of blame in other directions while the truth lies buried beneath hidden agendas, cliques and power struggles. And they then cloak their language in theological piety, while their very actions suggest otherwise.

As it happens, he’s describing the board at Baylor.

In both cases, not only does no one resign. Everyone plays the theological piety bit to the absolute hilt. Only card they’ve got.

… set the pace here** – and as for bohemoth endowment losses based on interest-rate swaps, no one will ever outpace Harvard’s Larry Summers .

But Dartmouth is certainly doing its bit, with “the investment of $550 million in interest-rate swaps with now-defunct Lehman Brothers that [a faculty and alumni group] says are now worth $250 million.”

A lot of people at Dartmouth are unhappy about university trustees who are also money managers, and they’ve written a letter about it to the governor and attorney general of New Hampshire.

The letter calls for an investigation into money managers who have invested the Hanover, N.H.-based college’s assets while members of the investment committee… The letter accuses the money managers of “enriching themselves” through private equity, venture capital and hedge fund investments made by the endowment.

——————————————

**

In an official letter distributed to alumni, students, faculty, and administration, Yeshiva University President Richard Joel stated that Merkin, who was Chairman of the University Investment Committee, managing its endowment of almost $1.8 billion (as of about 2 years ago), had invested about $112 million in his own hedge fund, Ascot Partners, which was almost solely invested with the [Bernard] Madoff fund. In actuality, it was an initial investment of $14 million that became falsely inflated to $112 million over time. As such, Merkin collected an initial fee of one percent and later 1.5 percent, standard for all of Yeshiva’s money managers on whose Board of Trustees he sat. He collected over $2 million in fees, almost $1 million for Ascot alone. In fourteen years, the fund grew 9 percent a year, even after subtracting losses for Madoff and expenses. He made at least $10 million from Yeshiva over his tenure. Although Joel implicitly acknowledged that the university’s charter lacked a conflict of interest restriction on the management of school funds, Merkin resigned from all of his positions at Yeshiva that day.

… UD figures universities with a penchant for sketchy money guys (Yeshiva had Ezra Merkin too) have instituted Trustee Early Warning systems so they can dump the guys before the federal government moves in for the kill.

Brown University’s TEW system must be going

awhooogawhoooga

right now.

… group. There’s insider-trading-charges-evading-tho-no-one-knows-how-the-hell-he-pulled-THAT-off Steven Cohen; there’s all-round terrific guy Ron Perelman; most recently, there’s New York’s naughty Lieutenant Governor, just today arrested on big ol’ fraud charges.

It is UD‘s considered opinion that Brown is in some kind of obscure competition with Yeshiva University (Madoff, Merkin, and oh so many more) for grubbiest greediest grotesquest trustees.

… Ezra Merkin, no one can be surprised that the school is in a ratings free fall. This blog has spent years detailing the damage that this school, with its conflict-of-interest-riddled trustees (a group that boasts such stellar characters as Ira Rennert and Zygi Wilf), and its greedy, morally clueless president, did to itself over the last ten years. You don’t get to brutalize a university the way this pack of rascals did (and some of the rascals are still there, rascaling around) without paying a very high price.

The guy writes an opinion piece in the school’s newspaper wondering about this – in particular, he wonders about Yeshiva’s … curious …board of trustees, recent haunt of Bernard Madoff and Ezra Merkin… Current haunt of the notorious Wilfs… And all-’round, COI-infested, $500 million-losing risk-taker…

You really think these big-money boys wanna talk to a pipsqueak like you? Bugsy Siegel maybe they’d talk to. Only he’s dead. You they won’t talk to.

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

Update: The Forward takes note.

The American university that put Bernard Madoff on its board of trustees and made him (wait for it) treasurer has never – in the life of this blog, anyway – been out of the gutter news. Sex scandals, money scandals, an entire campus named after a convicted fraudster, a Moody’s rating so low as to be beyond belief…

I could go on. All of which means that this blog has never been able to lose sight of Yeshiva.

YU’s constant corruption is doubly interesting in the context of its pious self-image. It joins company with Baylor University and Liberty University as a national epicenter of religious hypocrisy.

Actually, YU is triply interesting — because of the pathos (it shares this with the other two schools I just mentioned) of there being many good and thoughtful and authentically spiritual people on campus. You can go to the campus newspaper and read their Job-like endless plaints.

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

Okay, so one of the school’s longest-serving leaders resigned in 2013, and here’s the most positive appraisal I can find of him.

Now the guy’s son, once a member of the university’s Board of Directors, has been arrested for voting fraud and bribery. Yeshiva once again gets prominent ugly mentions in the national press.

… gets curiouser and curiouser. One of America’s most amoral and at the same time most morally self-righteous institutions now turns to the task of replacing as president a man who raked in millions in compensation while presiding over its financial ruination at the hands of corrupt trustees and other powerful campus figures, starting with Bernard Madoff and Ezra Merkin. Prominent Yeshiva buildings and programs bear the names of figures like Ira Rennert and Zygi Wilf. Several of the, er, friends of Merkin and Madoff remain in prominent positions on Yeshiva’s notoriously conflict-of-interest-ridden board.

Financially, the school is struggling like few other universities of its size and age in the country. Moody’s continues to rank its bonds as junk and recently determined that the school has a negative outlook. In the past five years, the school has been warned twice (in 2012 and again in 2014) by the Middle States Commission on Higher Education about the possible loss of its accreditation.

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

Eight years into the university’s financial crisis, Y.U.’s financial problems give no sign of abating. Two years ago, the school lost $83 million. Last year it lost another $84 million. And six months ago Moody’s reported that it expects the school’s financial condition to continue to deteriorate.

Yeshiva leaders represent so much greed and mismanagement that according to Moody’s the school may have to fold. If it folds, this will be due not merely to gross irresponsibility, but – just as importantly – to the ick factor. The gulf between Yeshiva’s self-presentation as a pious institution and the squalid reality of its financial dealings and some of its backers has grown so wide, the school has so profoundly and insistently disgraced itself, that you just have to laugh. It has become a hopeless joke. A tragic joke if you happen to care about the survival of modern orthodoxy in America.

Given this background, UD understands why Yeshiva is thinking of appointing as president a managerially clueless but possibly actually religiously serious person.

Assuming it is trying to survive, Yeshiva is faced with two sort of impossible choices: It can appoint as president a powerful, brilliant, and maybe even honest money manager who might be able wrestle the corrupt board of trustees down and get the school on a roughly legitimate financial footing.

It seems to have chosen not to do this, which means the board continues on its merry institution-destroying way.

Yeshiva University has gone the other way – it has decided to work on its moral reputation. And, I mean, okay – it certainly needs to do this. But it will end up with a nice Queen Elizabeth on the throne and the same bad boys behind the throne.

There are no indications that [Ari] Berman has the experience or even the drive to radically alter how the school functions in order to move it out of the crisis it now finds itself in. While it might be nice in theory to have a president with a PhD in Jewish thought at the helm, the selection of an MBA might have actually guaranteed that the school would be able to matriculate future Jewish thinkers and leaders.

To make matters even nicer, the seemingly endemic corruption and parochialism of Yeshiva’s culture continues unabated with Berman.

Soon, the trustees now guiding the university, including Berman’s uncle, the influential communal leader Julius Berman, will vote on the nominating committee’s selection.

Julius Berman is Exhibit A for what UD is talking about in this post. Notoriously, Berman presided over a holocaust victim restitution fund that for sixteen years was massively embezzled.

[Isi] Leibler singled out Claims Conference Chairman Julius Berman and Executive Vice-President Greg Schneider for particular criticism in a recent Jerusalem Post opinion article. Leibler, a former World Jewish Congress official who lives in Israel, wrote that instead of launching an independent review following the fraud, the two men orchestrated a “Stalinist” board resolution that absolved the Claims Conference of all blame.

“Such contemptuous rejection of all managerial accountability in the wake of such a massive fraud would be inconceivable in any public company or government body where resignations or dismissals would have been mandatory,” Leibler argued.

See what I mean? You just have to laugh. Yeshiva University is irredeemable.

… 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?

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

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?

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

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.

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

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!

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

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!

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

Let UD just say this for the record: If she were a Yeshiva University student, professor, or graduate, she would have serious anger issues.

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…

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…

As international attention pivots to scandalous, junk-status Yeshiva University, UD wants to acknowledge those people – like Andrew Sole – whose concern for the institution as a university rather than a tit for hedgies on the board of trustees prompted them to act on behalf of YU. She wants to acknowledge the three faculty members who, in 2012, wrote an anonymous letter to the campus newspaper (anonymity being required in the corrupt setting of this rapidly dissolving university) voicing their despair at the baffling failure of the university’s endowment — baffling because the cronies on the board of trustees who were high-risk-betting all of the university’s money away were far too arrogant to tell anyone about it. Why weren’t there conflict rules? Why wasn’t someone supervising the trustees and the money managers? Does it bother anyone that, with the exception of storied Yeshiva trustees Bernard Madoff and Ezra Merkin, pretty much the same people whose staggering financial irresponsibility destroyed the school are still on the board?

There’s a pathos, two years later, to reading these faculty members trying to figure out what’s going on:

No one is speaking about what caused the terrible drain on the endowment and when it will stop. In short, there is no transparency… Yeshiva needs to figure out why the endowment is performing so much poorer than the endowment of every other comparable institution in the nation and fix that problem. We do not know what the problem is or how to fix it – but we see that no one else is discussing what really is the problem, in part because of the utter lack of transparency in YU’s finances.

Well, that’s over. Now the whole world is watching as the story of how a school destroys itself through greed, secrecy, and cronyism, plays out in the national and international press. As the Yeshiva University story escalates, this blog will continue to note the people who warned the school that it was killing itself.