By Professor Doom
Last year, I looked at a school that was “forced” to go from free tuition, to charging $19,000 a year. It was obvious on the face of it that the school had been plundered by the administrative caste…you just can’t go from “free” (and tax free status) to having to charge that kind of money overnight. At the bare minimum, we have gross incompetence, since anyone with basic financial competence should see that kind of problem coming a long ways off (note: this school wasn’t reliant upon public funding, beyond tax free exemptions).
Welp, the ol’ finances have been looked into:
I really feel the need to point out that “shady financial dealings” is meat and drink in higher education, at least at the administrative level. Pretty much every financial transaction on campus, from tuition payments to purchasing candy bars in the vending machines has some shady components to it, so what we find here is just a laundry list of standard administrative practice:
Gee, administration on a madcap building spree? Administration on many campuses have edifice complexes. It’s an amazingly simple way to transfer money from the school coffers (or the taxpayer) to administrative pockets. It’s almost impossible to follow the money trail with this level of dollars being spent. Well, impossible unless people with deep pockets really want to spend the money on it. Across the country, campuses are choking on construction dust, even as more and more coursework is moving online. I bet there’s room for another question or two here, and not just on this campus.
"The Trustees compounded the impact of this mistake by squandering the endowment through investments in risky hedge funds, questionable real estate transactions, and improvident increase in debt,"
Cui bono?, who benefits?, needs to be asked very, very, loudly here. The school has an endowment, and gives free tuition. With no money coming in, going into debt is a colossally stupid idea. I would expect many kickbacks here, you know, like at other institutions.
“…While taking on debt, the suit points out, the college was also paying its president over $1 million in salary,…”
It’s easy to see why the scandal here hasn’t made the major news. C’mon, Poo-Bahs making ridiculous amounts of money are pretty common now, even when the most generous assessment of their capabilities is “wildly incompetent.” We all know the more you pay the Poo Bah, the worse student debt is. If higher education was really about helping students, why not just use the results of this research to identify which Poo Bahs to get rid of, first?
"Then-trustee William Sandholm's company directly benefited from the construction," the petition alleges, pointing out that Rose Associates, where Sandholm serves as COO, profited when Jonathan Rose of Rose Associates secured a $2-million contract to oversee the Mayne building's construction. Rose's mother also served on the school's board at the time, the petition points out.
It really is amazing that if I sell an outdated textbook to a dealer for $5, admin has a real problem with it, “selling university property,” even if the book still has the mailing label with my name on it…because the campus doesn’t even use the book. Similarly, there are restrictions on my working for other institutions, restrictions on using/recommending textbooks, restrictions on any way I can make money for myself. While legions of administrators work diligently to make sure I don’t make a nickel more than they think I’m worth, the Poo Bah and his Mom are making money hand over fist terminally plundering the institution.
I really want to point out how blatant this is. Does the gentle reader honestly believe that nobody on the school’s board realized “Hey, aren’t you his Mother?” Conflict of interest rules vary somewhat from state to state, but, yeah, this level of nepotism is explicitly forbidden in most systems. And nobody on the board spoke a single word. Of course not, they were all in on the plundering.
The only reason this scandal came out was because the greed and incompetence of the administration at this school was so excessive that they took a fiscally sound century-old school and rammed it into the ground in a few years. I do hope there’s investigation into the personal finances of the trustees and administrators at the school, I suspect quite a few found their checking accounts blossoming nicely…
There has been no shortage of finger-pointing and acrimony. The former chairman of the board, Mark Epstein, blamed alumni at various public meetings during his tenure, pointing out that they donate to the school at a rate of only one in five.
Wow, “you guys haven’t been donating enough” is a heck of a justification for increasing tuition from $0 to $19,000. I guess I can just add that to all the other lies that have been told to justify rising tuition. Why does anybody believe anything coming out of a Poo Bah’s mouth?
Alumni have pointed out in rebuttal that the school indicated no sense of urgency about its finances, even boasting to the press in 2009 that the school was in the black after the crash due to its wise investment policies.
So, were they lying then, or are they lying now? Across the country, institution after institution is being plundered like this, all you have to do is go to a campus, see a construction project, and follow up on the relationships between the contractors and the trustees…
Mercifully, it looks like there won’t be quite as many golden parachutes passed out as usual. Five trustees (sic) and the Poo Bah resigned before they were kicked out…it’s a safe best those trustees, at least, recognized the mother. As is so often the case, no matter how great the disgrace that forced them to leave, administrators end up in another plum job in short order: in this case, the former Poo Bah is now at Harvard, in the Graduate School of Education (have I mentioned before the incestuous relationship between admin and Education?).
At least Cooper Union can rejoice that the plunderers are gone…too bad it probably won’t survive their deeds.
The suit moreover alleges "improper self-dealing."