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Are Universities Above the Law?

The great unscrutinized institutions of our time.

May 20, 2013, Vol. 18, No. 34 • By PETER BERKOWITZ
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The avoidance of transparency and the disdain for accountability can be seen, for example, in Robertson v. Princeton. In December 2008, Princeton University settled a lawsuit brought in 2002 by Robertson Foundation trustee William Robertson. The lawsuit alleged that Princeton diverted hundreds of millions of dollars that were restricted by the terms of the Robertson Foundation’s agreement with Princeton. William Robertson contended that instead of using the money to support students planning to enter government service, particularly in the field of international relations, as called for in the agreement, Princeton put the funds to a wide variety of other uses that had nothing to do with the foundation’s stated purpose.

In its conduct surrounding Association of Alumni of Dartmouth College v. Trustees of Dartmouth College, Dartmouth similarly showed itself averse to transparency and accountability. In 2007, led by reform-minded members, the Association of Alumni of Dartmouth College filed a lawsuit to prevent President James Wright from packing the board of trustees with handpicked members friendly to the administration. After the complaint survived Dartmouth’s motion to dismiss but before the case went to trial, the Dartmouth administration exploited its tightly held information about college alumni to successfully champion a new slate of candidates to the alumni association. Upon winning election, the reconstituted alumni board promptly withdrew the lawsuit.

And disregard for transparency and accountability was on prominent display in 2006 after three Duke University lacrosse players were falsely accused of raping an African-American woman. University professors were quick to publicly vilify the accused student athletes, and high administration officials, including Duke University president Richard Brodhead, seemed to presume their guilt. Eventually, Duke reached an out-of-court settlement with the indicted lacrosse players while disgraced district attorney Mike Nifong was disbarred for grossly unprofessional conduct.

In each of these cases extraordinary measures were necessary to compel universities to honor elementary considerations of good governance and fair process. There is no reason to suppose that the conduct in question is exceptional; indeed, given the opacity of university decision-making and universities’ insulation from accountability, it is likely that these cases represent the tip of the iceberg.

Courts are legitimately wary about adjudicating university controversies, out of concern for academic freedom and a reluctance to substitute judges’ judgment about essentially academic issues for the judgment of professors and administrators. The Princeton, Dartmouth, and Duke cases, however, do not revolve around academic freedom or essentially academic issues. Rather, they deal with the ordinary business of courts, which is determining whether parties have abided by their agreements, guidelines, and promises. The same is true of Sylvia Nasar’s lawsuit against Columbia.

One of the central legal questions raised by Nasar’s lawsuit concerns the effect of a curious 2011 agreement between the Knight Foundation and Columbia. For some reason, despite the findings of the KPMG audit, the Knight Foundation decided to forgive 10 years and perhaps millions of dollars of documented misappropriations by Columbia; it also chose to alter the terms of the endowment to substantially reduce support for the Knight chair. Nasar argues that while the 2011 agreement legitimately changes Columbia’s obligations going forward, it cannot retroactively alter Columbia’s obligations in earlier years. She contends that she is entitled as holder of the Knight chair since 2001 to substantial damages as a specific beneficiary and as a third-party beneficiary of the original endowment grant agreement contract between Columbia and Knight that was in effect until 2011.

Regardless of whether the courts find a legally cognizable injury in the case of Nasar v. Columbia, the educational question demands the closest examination: Can a university, which operates as a public trust, be trusted to prepare its journalism students to shoulder the responsibilities of the press in a free society if it cannot be trusted to deal honorably with, and respect its formal obligations to, its faculty? So too does the question of university governance to which the Nasar case gives rise require careful consideration: What steps can universities, many with endowments in the billions and even tens of billions of dollars, take to ensure​—​and to assure members of the university community and the public​—​that they are using gifts consistent with donors’ intent?

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