Monday, November 29, 2004

Beware of Donors

Virtually every university (and law school) needs to engage in serious fundraising these days.  A problem arises when a donor gets in hot water over personal improprieties or, even worse, is charged (and convicted) of a crime.  The University of Missouri has been in the center of a controversy over the removal of the name of the daughter of the donors, who gave $25 million, from a new basketball arena that just opened.  The daughter, Paige Laurie, is the granddaughter of one of the founders of Wal-Mart, and a former freshman roommate at the University of Southern California accused Paige of paying her $20,000 over 3 1/2 years to write term papers.  An article on ESPN.Com (where else do you get news on Thanksgiving weekend?) mentions that the University also will likely return a $1.1 million gift from Ken Lay, the ex-CEO of Enron, to endow a chair in the economics department, if Lay is convicted next year in a trial related to the collapse of Enron.  The University has not filled the chair to this point.

There are a number of Arthur Andersen Professors of Accounting (e.g, Michigan,  Boston College, Southern California, Texas Tech), and the University of Michigan has the Taubman College of Architecture and Urban Planning, named for  A. Alfred Taubman, who spent a little less than a year in a federal correctional institution after his conviction for criminal antitrust.  University's cannot control the actions of their donors, and a criminal conviction does not mean the donation was wrongful or the recipient tainted.  It is not, however, helpful to the school when a prominent donor is convicted of a crime. (ph)

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