Summers and The Shleifer Scandal
Posted on February 17th, 2006 in Uncategorized | 13 Comments »
Harvard Vice President and General Counsel Robert W. Iuliano has written Institutional Investor magazine to stress something he feels David McClintick’s article on the Shleifer scandal did not make clear: that Larry Summers recused himself from Harvard’s handling of the scandal “from the outset of his presidency at Harvard.”
According to the Crimson, “the letter also says Summers did not participate in ‘judgements regarding whether, when or how Harvard should review the conduct of employees involved in the HIID project.'”
Without having read the letter, which the Crimson only excerpts, I don’t want to say that Iuliano is wrong. And of course he’s a very sharp and ethical guy, so I’m sure that what he’s saying is legally accurate.
But from what I hear, Iuliano is being misleading at best. My sources say that Larry Summers was constantly talking with Andrei Shleifer, discussing Shleifer’s legal problems, from at least the time that Summers became known as a candidate for the presidency of Harvard. Shleiferâone of Summers’ biggest advocates for the presidencyâwas apparently confident that, as president, Summers could and would make Harvard adopt a legal strategy supportive of Shleifer. Those conversations did not stop after Summers was named president.
Note, of course, that Iuliano writes that Summers recused himself “from the outset of his presidency at Harvard.” That is interesting language. What exactly does “outset” mean? Does it mean when he was first named president, in March of that year? Or when he was legally named president, in July? Or when he was sworn in, in October 2001? Or just some time roughly around when Larry Summers started his presidency. Who knows?
“Outset” is a useful term because it sounds specific on first reading, and on closer consideration it reveals itself to be so vague as to be virtually meaningless…and in my dealings with lawyers, it’s my impression that vagueness is not unintentional.
Here’s an interesting question that Iuliano doesn’t raise: What connection did Larry Summers’ friendship with Andrei Shleifer have to do with the ouster of Harvard general counsel Ann Taylor (Iuliano’s predecessor) in June 2002?
Did Andrei Shleifer ever urge Larry Summers to fire Taylor as a precursor to changing Harvard’s legal strategy? Did Summers ever discuss with Shleifer the best way to force Taylor out? And wouldn’t firing the architect of Harvard’s legal strategy be considered involving oneself with the legal disposition of the Shleifer scandal?
(And if so, should not Iuliano recuse himself from any involvement in or comment upon the Shleifer scandal, given that Taylor’s departure resulted in his promotion?)
If the alumni class action lawsuit ever gets the chance to happen, these would be interesting questions to ask Larry Summers while he is under oath.
Because ostensibly that would keep him from lying.
The Shleifer scandal is ugly business…but sooner or later, the truth will come out. And Harvard will be be better off for it.
Veritas. Right?
13 Responses
2/18/2006 7:43 pm
Are you away?? (awake??) Gosh, I expected to see something here about the Wall Street Journal’s article on the Harvard Corporation…apparently President Summers is away on a ski trip…Are you, too?
2/18/2006 8:31 pm
Yeah, I thought all you did was sit in your appartment and blog about university gossip. This is prime stuff, where are you?
2/18/2006 11:25 pm
What about the NYT article? Any thoughts?
2/19/2006 1:35 am
Why bother waiting for our host? I got some thoughts: Summers is toast. Sure, the Corporation will be worried about setting a precedent by doing anything obvious to force him out, but this guy’s been a disaster from start to finish. He’s on his way out, and it’s only a matter of time at this point. He’s a lamer duck than George Bush himself, especially with people like Keohane and Reichhauer semi-openly undercutting him. I think we’re all better served by moving directly to speculating irresponsibly about possible replacements.
2/19/2006 11:35 am
Not so fast. Let’s speculate about the Corporation vote. Summers can’t vote on this one (gosh, doesn’t he already have experience recusing himself??) The Conrad Harper replacement doesn’t go on the Board until May…The treasurer is still firmly in Summers’ pocket…Is a simple majority needed?
2/19/2006 12:10 pm
Will Summers actually leave us? Or could he decide to stay in the ec department (He is a tenured member of the faculty, and he should know better than anyone that there isn’t a lot of work involved…)As for his replacement-Columbia and Princeton both have very successful presidents…and Jeff Sachs has done a great job at the Earth Institute, although there might not be a lot of enthusiasm for another economist for a while…Interestingly, one question a Corporation member has asked is what the Faculty response would be to having Andrei Shleifer leave and Larry stay…
2/19/2006 1:36 pm
Well, add the Boston Globe, Reuters, and Bloomberg to the list of those carrying rumors of Larry’s impending demise…
2/19/2006 5:31 pm
I don’t imagine that the Corporation would actually *vote* per se, although I’d imagine that some majorities would be able to overcome the dissent of one or even two members if things lined up right.
Given that, I imagine Keohane, Reischauer, and Houghton leaning against Summers, with presumably Rubin and perhaps Rothenberg remaining in his favor and King, who knows.
That’s a situation that could go either way. But Summers’ total absence from the Allston announcement the other day leads me to believe that he’s probably done for, since this is a major project he himself wants to be publicly associated with.
Also, there’s a new Crimson article up (http://www.thecrimson.com/article.aspx?ref=511418) and, in other news, this is funny: http://www.harvardcorp.com/
2/20/2006 11:14 am
Hi folks. I’m glad you didn’t wait for me; I was out of town this weekend, at a place that, believe it or not, lacked Internet access.
Thus proving that it is not true that all I do is sit in my apartment and blog about university gossip.
The real question on that front is, How come no one who’s actually at Harvard does this? I’m always struck by the fact that, of the 700 strong members of the Harvard FAS, I don’t know of one who blogs. (Reportedly Alan Dershowitz has a blog, but of course he’s not FAS.)
Even if one were disinclined to cover what I cover, wouldn’t a blog be a natural outlet for a professor?
2/20/2006 1:12 pm
Think about it Richard: why host a blog when one can similarly, if not more effectively, influence opinion through the self-protecting cloak of anonymity?
2/20/2006 4:24 pm
Wow—that’s cynical. I hope it’s not right.
2/20/2006 6:47 pm
It may seem cynical, but then, the nature of the current conflict could certainly be decribed as such.
2/20/2006 6:52 pm
I certainly hope that’s not true, or at least not entirely true. Despite the ugliness of all this bad business, I continue to think that there are important issues underlying it about the nature and direction of American universities. And I try not to be cynical because, for all its flaws, Harvard is important.