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Wednesday, June 30, 2004
This here's a big ol' Russki oil platform somewhere real cold. Harvard University has had lots to do lately with Russians and oil. For a couple of years Harvard's been involved in a complicated lawsuit filed against it and two of its employees by the US government, which wants millions of defrauded dollars back from the now-defunct Harvard Institute for Development. The Agency for International Development gave HID's Russia Project over thirty million dollars to advise Russians on privatization. And HID did advise them, to some extent. But two of its principals, a judge today ruled, also used their insider knowledge to make big money: "Hay and Shleifer were advising the country on restructuring its economy. At the same time, they and their families allegedly made several hundred thousand dollars in investments in [oil and other] companies Hay and Shleifer were helping the Russian government regulate." The personal investments were a conflict of interest because "the two men were designing laws and regulatory institutions for the Russian government at the same time they were investing money in certain businesses. That alleged violation of Harvard's contract tainted $350 million in US projects, hurt Russia's economic development, and damaged US-Russian relations, the government said." Harvard may have to pay up to 34 million dollars; the two men directly at fault will have to pay much less than that. A hearing on damages is scheduled for July 19. Meanwhile, the Harvard Corporation is suing one particular Russian oil company for money it says it owes Harvard. But that's just a business tussle; the HID ruling goes to the heart of Harvard's ability to police itself, and is much more important. |