What Happened to Shleifer?
The Crimson reports that interim FAS dean Jeremy Knowles has concluded the ethics inquiry into the misbehavior of economist Andrei Shleifer. It was Shleifer who, while on contract with the U.S. government to provide economic advice to Russia, abused the opportunity to engage in insider trading.
According to the Crimson,
Interim Dean of the Faculty Jeremy R. Knowles said yesterday that “appropriate action” had been taken in the investigation, brushing aside charges that he mismanaged the Shleifer case by acting without consulting the committees that had investigated the matter.The seven-member Committee on Professional Conduct (CPC), along with a three-member investigating subcommittee, scrutinized Shleifer’s purported role in conspiring to defraud the U.S. government by making private investments in the Russian economy while he helped advise a federally sponsored and Harvard-run aid program there. In recent weeks, however, Knowles’ silence on the matter has disturbed members of the CPC and the investigating subcommittee. Several committee members are upset with the dean’s management of the issue and some have questioned whether the case was handled fairly, according to two individuals who have spoken with professors on the committee.
Shleifer, who was in Amsterdam to deliver a lecture, declined to say whether he had been punished by Knowles. “I am delighted that this matter is fully behind me,” he wrote in an e-mail message sent from his BlackBerry. “I look forward to following [Knowles’] advice and focusing my energies fully on scholarship, teaching, and on service to economics and to [H]arvard.”
I don't understand this outcome at all. I'm sure Jeremy Knowles had his reasons for doing what he's done. But he should explain them.
The Shleifer scandal is a matter of profound importance and public relevance. It involves government fraud, Russia's transition to democracy, and the reputation of Harvard. The university itself paid some $30 million in fines and legal fees to settle the case with the federal government.
And now...it has been decided in secret, and the outcome is secret.
This is neither a healthy process nor a healthy outcome.
Like many of you, I read
David McClintick's Institutional Investor article on what happened. It boggles the mind that a tenured professor who acts as Shleifer did in McClintick's description can remain at Harvard.
Knowles is known a stalwart defender of the faculty, and I'm sure that in many cases such defenses are warranted.
But the Shleifer scandal is much larger than an internal FAS matter; it's larger than Harvard itself. No matter what Knowles intends here—and I have no doubt that his intentions were honorable—resolving the matter in this way feels like a cover-up. This is not how it should end, and I hope that this is not how it does.
