All posts by Diane Whelton

Diane Whelton lives in New York.

NYU: $72 million in Odd Loans, No Confidence Vote from Faculty

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For
John Sexton, president of New York University, March came in a like a
lion.  In one aggravating week Sexton
found himself the subject of two biting stories in the press: a no-confidence
vote from faculty and focus on $72 million in unexplained  NYU loans to Jack Lew and many others.  The first was merely embarrassing.  The second could endanger Sexton’s powerhouse
position at NYU.

Ironically,
Sexton and his university may be victims of their own success.  For decades NYU has steadily enlarged its huge
footprint, and now plans to add two million more square feet to its campus in
historic (and crowded) Greenwich Village. 
NYU has elbowed aside community protests and even tore down a house
where Edgar Allen Poe once lived, despite loud objections from many of its own
faculty.

One of
the main complaints of last week’s faculty vote of no-confidence in Sexton is
that he places financial objectives ahead of academic pursuits, while limiting
faculty participation in shaping the university’s future.  Sexton,  who earns $1.5 million a year, with a $2.5
million bonus waiting in the wings, has been asked  by Senator Charles Grassley (R-Iowa) to hand
over documents concerning loans and other fringe benefits it paid out over the
last 10 years.  Grassley also wants information
on the university’s generous compensation packages and details on how they were
calculated.

NYU
showed up on Grassley’s radar last month during Senate confirmation hearings
for Jack Lew, a former NYU employee who is now serving as Secretary of the
Treasury.  Grassley zeroed in on why Lew received
a $1.4 million loan from NYU in addition to an $800,000 salary for his
executive job, which ended in 2006. In a letter to Sexton, Grassley wrote, “NYU
appears to have given Mr. Lew an unusual array of benefits in an unusually
opaque way.  So the actual value of his
total compensation package is difficult to ascertain precisely.” Also difficult
to ascertain is why New York University is apparently functioning as a de facto
hedge fund.  Recently, NYU executive
Martin Dorph confirmed that 168 people have received loans from the university
totaling $72 million.

Where
does this largesse come from?  As the
largest employer in New York City, the university has immense political
influence on the local, state and – thanks to our new Treasury Secretary Jack
Lew – national scenes.  NYU’s $3 billion annual
budget gives it economic impact, as well.  

NYU’s
clout buys it a place on the “A” list. 
Its students, however, have to struggle for their “A’s”.  Those who live on campus pay about $70,000
per annum for the privilege of attending NYU.  Many borrow heavily to pay for their
educations.  They will owe money for
years to come.  John Sexton, Jack Lew and
New York University owe them some answers. 
____________________________________________________________________ 

(Photo: NYU President John Sexton. Credit: NYU.)

The Beast That Ate The Village

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As the 2012-13 academic year gets under way, more than
40,000 students from all 50 states and 130 foreign countries are attending the
graduate and undergraduate schools of New York University.  Some of these young scholars will undoubtedly
ride to school in upscale cars or limos: a year at NYU with room and board
costs almost $70,000, a handsome sum that contributes handsomely to the
university’s $2.25 billion in annual revenue.  
Computer printouts in hand, some of the newcomers will follow NYU’s
online directions and drive down Fifth Avenue to the university’s lair in a formerly
scenic area of Greenwich Village, one of Manhattan’s oldest and most historic
neighborhoods. “Fifth Avenue ends at the Washington Square campus,” NYU’s
directions helpfully conclude.

A few students may note that Fifth Avenue does not, in
fact, terminate at the NYU campus, but at Washington Square, a public
park.  However, those who fail to notice
this minor detail can be forgiven for assuming that Washington Square belongs
to NYU.  After years of watching this
celebrated park and nearby blocks treated like Monopoly properties by a private
corporation cloaked in scholarly robes, more than a few residents of Greenwich
Village also mistakenly believe that Washington Square belongs to NYU.  And if the university’s land grab continues, some day it might.

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