At Harvard, a Bombshell (Maybe)
One Harvard constituency which has been relatively quiet during the Summers presidency has been the university's alumni. For a group with an economic, social, civic and emotional interest in Harvard's excellence and ethics, Harvard alums have, on the whole, sat by quietly while their university has devolved into unrest and division since the fall of 2001, when Larry Summers was installed as president.
That may now be changing.
Rumor has it that a group of alumni has formed to commence a class action lawsuit against the Harvard Corporation—more specifically, those members of it who were present when key decisions about how to handle the Andrei Shleifer case were made. The list of potential defendants includes: Larry Summers, Hanna Gray, Jamie Houghton, Bob Rubin, former treasurer D. Ron Daniel, and Robert Reischauer.
The basis for the legal action: fiscal irresponsibility in the Shleifer matter. In other words, choosing to defend Shleifer in court when the university's lawyers allegedly advised the university to settle the matter right away. The argument: the members of the Corporation have a fiscal responsibility to spend Harvard's money wisely just as the members of a corporate board of directors do.
The lawsuit would seek to recover the difference between the amount Harvard ultimately paid in fines and legal fees and the amount for which Harvard could have originally settled the matter. That could be in the area of $20-$30 million.
To be recovered from individual members of the Corporation, the money would be donated to student financial aid.
I have no idea if this is a legally viable argument, and
I emphasize that the reality of this lawsuit is just a rumor. Obviously, I haven't been able to confirm it.
If it's true, you'll be hearing lots more about it soon enough. If it isn't, you won't.
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P.S. A poster raises the issue of how such a group would be able to claim standing to file such a lawsuit. Sounds like a good question. If anyone could shed light on that, I'd be curious to hear your thoughts.
