How ‘Money Men’ Hijacked a Famous College

dartmouth.jpgCrossing the snow-covered Dartmouth green one night, I stopped, looked around, and asked, “Who owns this place, and by what right?” More than half a century later, I have still not resolved a complete answer to that question. But I can give you my short-form response: A small group of willful people, mostly money men disdainful of undergraduate education, have stacked the board of trustees, made an unannounced decision to convert a liberal arts college into a major research university, and “earned” themselves huge commissions on sales of their own securities to the college’s endowment while keeping details of the transactions secret.

A note on the history: Most of America’s early colleges were founded
by church denominations, whose control gradually weakened as costs and
instructional quality rose. The pivotal stage in this history occurred
in the decades following the Civil War, when alumni, having assumed the
major burden of support, began asserting claims for seats on the board
of trustees. Dartmouth alumni battled longest and won the most
significant concessions in 1891. Responsibility for the college was to
be vested in each and every alumnus; excepting the ex officio members
(the state’s governor and the college president), half the trustees
would thereafter be elected directly by the alumni body, and the other
half by the entire board.

The system worked very well at Dartmouth, but in the wake of the Vietnam War, the administration and faculty turned sharply left, and so did the political class of alumni officers. A large number of dissenting alumni grew restive, and elected an independent candidate though a petition process. An attempt to deny the victor his seat failed, but the establishment rejiggered the rules to make repetition of this “dangerous precedent” less likely.

In response, the alumni movement focused on electing trustees through the petition process, taking aim at campus speech codes, the bloated administration, overcrowding and hostility toward a core curriculum. By May of 2007, an unbroken string of four petition candidates filled half the eight alumni board trusteeships. At a gloomy meeting of the Alumni Council (by now wholly a creature of the administration), the head of the nominations committee rose to express futility and to state that there was no point in naming candidates only to have them humiliated in an election. But the next speaker, outgoing Chairman of the Board William Neukom, could not resist leaking an intimation that the cavalry had mounted: “Don’t despair,” he announced. “Rescue is on its way.” And indeed, alas, it was.

Meanwhile, a second approach by reformers pressed for democratization of the Alumni Association by enabling all alumni to vote in its elections without having to be physically present in Hanover. After years of meeting dogged resistance, this reform succeeded, and in the very first election in which many thousands could cast ballots, insurgents captured a majority of the Association’s Executive Committee. No election since 1891 would prove as consequential.

Neukom’s “rescue” was simple: he and his allies packed the board with eight additional trustees, creating a supermajority that rendered the four elected trustees utterly impotent. In court, a New Hampshire judge rejected Dartmouth’s motion to dismiss our suit, but then we faced a greater hurdle: a new election. Aware of what was at stake, the college threw its resources behind an opposition slate which freely misrepresented, smeared, and lied its way to victory. Eight minutes into its first meeting, without discussion, the lawsuit was not only withdrawn but withdrawn with prejudice — meaning it can never be revived. The 1891 accord was dead.

Only a few years later, what was afoot in this nasty game played by the board has become apparent. Responsible to no one, a small group consisting almost exclusively of money manipulators has hijacked a college. Unchecked, they have sold their own securities to the college’s endowment while keeping details of the transactions secret and failing to comply with state laws regarding conflict of interest. In gratitude for their predatory access, they have crowded the campus with ugly or just dull buildings serving their vanities. Far worse, they have rapidly advanced the transformation of a liberal arts college into a research university without ever opening the question to a careful analysis of the disadvantages as well as the presumed advantages of that metamorphosis.

Their previous choice for president, Jim Yong Kim, was a thoroughly materialistic utilitarian who consistently displayed ignorance of the shaping forces of Western Civilization. To him, the value of the arts lay in stimulating the brain to breakthroughs in other fields; somehow linked with the liberal arts, they constituted the “special sauce” of Dartmouth’s undergraduate education. But the Big Mac on which he and the board cast a lickerish eye was a Dartmouth University with a health care nexus. And now that miraculous transport on Obama’s angelic wings has raised Kim to the World Bank, nothing is to change. Both the composition of the presidential search committee for a successor and public statements by its heads and the board chairman who appointed them loudly proclaim, the next president must, above all, promote the interwoven interests of the medical school, doctoral studies in the life sciences, and the new emphasis on the public health program.

Why should we believe that is the road best taken? No prick of compunction moves the board to explain. Simply, it doesn’t have to. Indeed, if any trustee were to be so wayward as to disclose any portion of the board’s deliberations, he (or she) would be in violation of the Trustee Oath all must swear as a condition of installation — a sacred pledge befitting La Cosa Nostra more than stewardship of an academic institution.

It may well be that the alumni of a college, like the citizens of a republic, lack the knowledge and sophisticated judgment to best chart a course for the future, but recent history should alert us that trusting in the money changers is not necessarily the mark of superior wisdom.

Frank Gado

Frank Gado is secretary of The Hanover Institute, a Vermont-based organization concerned with alumni matters at Dartmouth.

10 thoughts on “How ‘Money Men’ Hijacked a Famous College

  1. More than two years have passed since the reader comments were published. At the time of publication, I had deadlines to meet, and then I was hospitalized for pulmonary emboli. This is my first reading of the replies. I’ll try to be brief.

    Fenster Moop’s objections as to the lacunae in the chain of argument are justified. My explanation is that the draft of my piece exceeded the permissible length, and cuts were necessary. As the suit was covered in the press, I presumed a general familiarity with the case.

    Succinctly: I was elected to the Alumni Association executive committee. At the first meeting, we were informed that a trustee committee was “studying” changing the proportion of elected to appointed trustees–which the1891 agreement between the Board and the Alumni Association had concluded. Dartmouth had recognized the agreement as a contract as a defense in previous litigation NOT involving the AoA. It was an inviolable contract (unless both parties agreed). The executive committee was denied tghe means to report to the alumni, its own constituency, what was afoot. (I cashed my personal cds and drew on other assets for the more than $30k to report what was going on. The college would not provide addresses for our membership, and even threatened to sue us for use of old lists we had obtained.) The majority of the executive committee believed (and I still believe) it was our duty to defend our rights under the very contract that had provided for the formation and continuing existence of the AoA. The court never found the 1891 agreement to be anything other than a contract; our defeat came through the election of a new executive committee in a campaign so replete with lies that would require far, far more space to detail and refute than is available. Let one suffice for the purpose: The state of New Hampshire had historically had the right of approval for any changes in Dartmouth’s governance rules in the charter. A few years before our election, the college had asked the state to remove that requirement, and the state passed the bill without discussion. After the Board chose to change the proportion of elected to appointed members, a Dartmouth alumnus in the legislature, named Hess, was outraged, especially as he had been a sponsor of the bill. He asked Maureen Mooney, a colleague in the legislature , to submit anither bill repealing the previous measure. We on the executive committee had absolutely nothing to do with the matter. When Dartmouth’s vice president, a member of th executive committee, asked us to issue a statement opposing the Mooney bill, we explicitly stated, and voted, to take no action. It was the view of the majority that the relationship between the state and Dartmouth was not within our purview. Nevertheless, in the ekection campaign, the trustee- and administration backed candidates, in conjunction withh the college itself stated that we in the majority had asked Rep Mooneyy to introducethe bill as a way of reversing the trustees’ action. In fact, not only had we done no such thing but the bill itself would not have reversed the trustees’ action. Surely ouir opponents knew that, but that did not stop them from claiming that we were seeking to impose state control over a private college, that we were seeking to undermine the SUpreme Court decision in the famous Dartmiouth College case.

    Fenster’s argument that the 1769 charter had been raised during the wrangling in 1891 but had been settled then to the explicit satisfaction iofall parties. Moreover, the validity of the 1891 agreement had NEVER been challenged (indeed, as Ii stated above, had been affirmed by the Board on several previous occasions.

    Scott’s slam at me– that I had used my simultaneous “officership” in the Hanover Institute and the the Alumni Assciation in serving as legal liaison in the Association’s suit — is nonsensical. There was no conflict of interest (that Darftmouth VP Spalding was on the executive committee certainly did present a conbflict of interest). Perhaps Scott has misunderstood the college’s charge that I had “hidden” my affiliation with the HI in my candidacy. But I had hidden nothing. I had been completely open about my role in the HI, and, in fact, my office in the HI had been cut from my candidate’s statement, not by me, expressly because

  2. I don’t know if this editorial passes the academic integrity smell test. Fabricating quotations? Slandering administrators? Inventing historical “facts”? Is the author bound by any academic rules?

  3. @Dean. The Fire post calls it “Dartmouth University,” which is not an endorsement of its credibility. By the way, Dartmouth is one of the few schools to hold a “Green Light” rating from Fire, a rating it received for censoring two apparently offensive letters (offensive to Fire, anyway) by pulling them from its website, at Fire’s request.

  4. From an outside (UK) perspective, it seems that if the alumni don’t like what is going on at Dartmouth, they should stop giving Dartmouth money?

  5. Mr. Gado has thrown so many geriatric gripes into the pot that it’s hard to tell what he thinks is important. Did he invent the quotes from William Neukom? Does he have any proof that trustees received commissions on investments Dartmouth placed with their firms? Why does he think the trustees would allow direct elections by alumni in spite of their charter and resolutions? Why doesn’t he mention his use of his simultaneous officerships in the Association and the Institute to promote the lawsuit against the board? What “lies” were needed to win an election where the only issue was the withdrawal of an unpopular lawsuit for which Mr. Gado never sought alumni approval in the first place? Not the most qualified advisor on nonprofit conflicts of interest, let’s put it that way.

  6. Reference to the charter shows that the trustees alone were authorized to elect their successors in 1769. They have been so authorized ever since, as that clause has never been amended or stricken by a court.
    While there are schools where alumni directly elect trustees, it is false to claim that Dartmouth is one of them.

  7. Interesting but confusing and poorly written. Gado starts with the charge about money men but moves immediately to his beef with the alumni role in governance. How that fight connects with the money men is not made clear, other than to say that “what was afoot” has “become apparent”. In the sixth paragraph, he suddenly discusses the dismissal of “our suit” without previously mentioning the suit (context, please?) or even what he means by “our”. The criticism of Kim and the movement in the direction of a research university is made without engaging in the substance of the ideas.
    There may be a good article in there somewhere. But if I were Gado’s professor I’d sent it back to him for a rewrite.

  8. Lots of problems afflict higher education; but the interests of reform are not served by wild and confused ad hominem posts, specifically:
    – Gado is implying corrupt financial benefits on the part of particular Dartmouth trustees. These are serious charges and he should detail them if he can. If his argument is large donors are using their financial support to drive an institutional agenda he dislikes and believes objectively bad for Dartmouth, he may be right on the merits ; but not necessarily on the imputation of wrong-doing in its implementation.
    I agree with Gado alumni have a legitimate interest in their almas mater; and should elect a meaningful portion of trustees; if only to limit the insularity of administrations and their hand-picked boards. Elite institutions which cavalierly blow off their alumni at a time when they will need generous alumni support to maintain the tremendously high cost and labor-intensive campus experience which is their distinctive offering won’t be able to sustain their elite status indefinitely. We can try to push these institutions into a different balance (and truly greater intellectual and cultural diversity in the faculty on campus); but these battles won’t all be won , and when we lose them, it is time to move on and support different and more meritorious institutions.

  9. I note that the original charter of Dartmouth College (http://www.dartmouth.edu/~trustees/docs/charter-2010.pdf) contains the following articles:
    “[10] KNOW YE THEREFORE, that We considering the Premises and being willing to encourage the laudable & charitable design of spreading Christian Knowledge among the Savages of our American Wilderness and also that the best means of Education be established in our Province of New Hampshire for the benefit of said Province, DO of our special grace certain knowledge and mere motion by and with the advice of our Council for said Location of School, by these Presents WILL, ordain, grant & constitute that there be a College erected in our said Province of New Hampshire by the name of DARTMOUTH COLLEGE
    “[11]for the education & instruction of Youth of the Indian tribes in this Land in reading, writing & all parts of Learning which shall appear necessary and expedient for civilizing & christianizing Children of Pagans as well as in all liberal Arts and Sciences; and also of English Youth and any others,”
    Of course, the Dartmouth webpage now omits the phrases concerning God and Christianity in its quotation, “That charter created a college ‘for the education and instruction of Youth of the Indian Tribes in this Land … and also of English Youth and any others'” and the link to the original charter is dead (http://www.dartmouth.edu/home/about/history.html)
    You refer to the corruption of the moneychangers, whom Jesus expelled from the Temple. You should also, however, notice what Jesus said later in those same temple courts: “Give to Caesar what is Caesar’s, and to God what is God’s.”
    Remember also that Jesus said in his Sermon on the Mount, “You cannot serve God and Money.” By long, long ago abandoning all pretense of serving and obeying God, the whole community of Dartmouth College firmly latched onto the only other master there is: materialism, and began its worship of Mammon/Money/The Economy. The recent actions of the Trustees only made this allegiance official.
    Dartmouth College made its bed, and now it is going to sleep in it.

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