More trouble for Stevens Institute?
12
March
3/12/2010 Update:
Possible misuse of Federal funds?
Oh boy – after apparently “settling” their case with the State of NJ – it seems that Stevens Institute of Technology is back in the “money news” again.
ABC News reported today that questions are being asked about possible misuse of Federal Department of Homeland Security funds received by Stevens Tech.
“Two state officials described the federal inquiries about the possible misuse of nearly $3 million in Homeland Security grant money distributed to the Hoboken-based technical college, which has spent months under fire over allegations that it mismanaged its books. The state officials discussed the conversations on the condition they not be identified.
The non-profit university had in recent years become a darling of New Jersey’s congressional delegation, which has directed millions of dollars in congressional earmarks and federal grants to the school. In 2008 alone, Stevens received $12.8 million in defense related earmarks requested by Sens. Robert Menendez (D), Frank Lautenberg (D) and other New Jersey lawmakers. Stevens also received $4.8 million in stimulus funds through grants from the National Science Foundation and the U.S. departments of transportation, health and human services, and education.”
1/15/2010 Update:
Case vs. NJ settled…
Raveche to resign, parties agree to new procedures
The State of NJ and Stevens Institute have reached a settlement agreement. Here are some documents to review:
- NJ Attorney General Statement
- Final Consent Judgment
- Message from Lawrence Babbio
- Statement from retired Judge Zazzali (board of trustees)
12/30/2009 Update:
Chairman Babbio says everything’s fine
Here we have an update from Lawrence T. Babbio Jr., Chairman of the Board of Trustees at Stevens Institute of Technology.
In regards to President Hal Raveché’s compensation, he says it’s “performance based” and in line with similar positions at other institutions. And in regards to the reduction of the endowment fund, he pointed at the fledgling economy as the culprit.
12/22/2009 Update:
Hal Raveché’s “fiscal impropriety” story makes the NY Times today.
Endowment shrinks by $40+ million
“You’ve got allegations involving excessive compensation, but also abuse of the endowment, keeping two sets of books, misleading the board and forgiveness of below-market-rate loans,” Mr. Siegel said. “The entire process of oversight looks tainted. You rarely see a case this extreme.”
“They were all beholden to him, and there were no controls on what he spent,” Mr. Cuff said. “He’d travel the world, keeping no receipts. He’d come to the West Coast, have limousines meet him, stay in five-star hotels, all under the guise of raising money. And it was very, very expensive.”
9/17/2009:
Seems that Hoboken is never more than a stone’s throw away from a crisis, investigation or lawsuit…
Fiscal Impropriety?
NJ State Attorney General Anne Milgram has her sights set on removing powerful Stevens Institute President Hal Raveche from his position at the Hoboken school. According to the Newark Star-Ledger, Milgram plans to file a lawsuit today charging the school with fiscal impropriety and seeking to remove its top two leaders.
See previous updates after the jump!
AG spokesman David Wald said the state’s two-year investigation also discovered misappropriation of endowment funds and excessive compensation.
Ahead of that suit, Stevens has filed it’s own suit seeking for any case to be pursued through confidential arbitration away from the eyes of the public. Raveche has been criticized for the millions of dollars in salary and loans he has received from the school. The staunch Republican was a favorite of former Mayor David Roberts.
The AG is also seeking to have Board of Trustees Chairman Lawrence Babbio (of Babbio Center fame) removed from Stevens. Under Raveche, Stevens has taken a heavy-handed approach in dealing with Hoboken community groups that have called the school’s ambitious development plans into question.
December 31st 2009 - 17:40:44 |
Looks like “industry wide” endowment performance is off too:
http://www.insidehighered.com/views/2009/04/09/wolfston
How does Steven’s endowment performance compare? Probably not far off from the norm given overall financial markets. Should be easy to verify and benchmark. What have the auditors said?
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December 31st 2009 - 19:54:44 |
Go NJ Atty General ! Get Him !
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January 1st 2010 - 09:40:01 |
Your article is over a year old and doesn’t refer to Steven’s explicitly.
Take a look at this article – it is about the case at Steven’s and came out on December 22, 2009.
nytimes.com/2009/12/22/education/22...agewanted=2&_r=1&sq=stevens tech&st=cse&scp=3
Here is a direct quote from the article:
“You’ve got allegations involving excessive compensation, but also abuse of the endowment, keeping two sets of books, misleading the board and forgiveness of below-market-rate loans,” Mr. Siegel said. “The entire process of oversight looks tainted. You rarely see a case this extreme.”
In response to awccpa who said:
http://www.nytimes.com/2008/11/17/education/17college.html
Of course, pay is relative to many other things as well.
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January 1st 2010 - 09:42:56 |
I overlooked that 411 had posted a link to the Dec 22 already. Just saw that now.
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January 1st 2010 - 11:42:31 |
They make claims like increasing enrollment, but all they really did was lower standards and invent new majors to cover their own debt.
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January 2nd 2010 - 13:02:55 |
can’t comment about the lower standards – I don’t know about that.
However, creating new majors to address changes in demand for marketplace skills is a logical evolution of higher education – business tech is hot and responds to a demand by the marketplace
The jobs that you and I have today may not exist in 30 years – the schools need to identify changing technologies and address the need for these new skills with corresponding credentials/degrees to meet those needs
In response to boatguy who said:
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January 2nd 2010 - 13:05:57 |
you are right the article was over a year old but still relevant – it did not mention Steven’s specifically but did talk about a real trend upward in administration salaries – esp the top spot at several institutions – pay packages of 1 to 2 million.
The issue of “reasonable compensation” is not so easy to make and very subjective depending on marketplace needs and the needs of the institution. I don’t know what’s reasonable but I know its not so clear cut of an issue.
And making allegations are easy; proving them in court will be another story.
In response to oceanbloo who said:
Take a look at this article – it is about the case at Steven’s and came out on December 22, 2009.
nytimes.com/2009/12/22/education/22...agewanted=2&_r=1&sq=stevens tech&st=cse&scp=3
Here is a direct quote from the article:
“You’ve got allegations involving excessive compensation, but also abuse of the endowment, keeping two sets of books, misleading the board and forgiveness of below-market-rate loans,” Mr. Siegel said. “The entire process of oversight looks tainted. You rarely see a case this extreme.”
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January 2nd 2010 - 14:58:06 |
Yep! Harvey hospital and Harold stevens seem to go together like ‘hot dogs and mustard’.
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January 2nd 2010 - 15:37:04 |
Ok, so maybe people see a need for having biz techs, I won’t argue about that because it can go back and forth forever. What you can say though is that the administration has overcrowded the school. They’ve run out of dormitory space and have resorted to leasing apartments which they still make money on.
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January 2nd 2010 - 16:14:36 |
Housing at many schools is in short supply.
Rutgers for instance is facing real shortages and barely provides housing for upper classmen.
media.www.concordy.com/media/storag...00.Students.To.Hotels-3702523.shtml
Stevens has grown. Is that growth such a bad thing? There are lots of empty apartments in Hoboken now so maybe their shortage of dorm space and Hoboken’s over supply of 2 BR / 2 BT condos is a good thing for all concerned.
In the end it will all balance out. And what’s wrong with covering their costs?
In response to boatguy who said:
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January 3rd 2010 - 03:55:57 |
Undergraduate admissions has not lowered standards at all. In fact, while application rates have gone up in recent years, acceptance rates have gone down. This means that Stevens is accepting a higher-quality student in general. I know, personally, several very well-qualified high school students which have been either rejected or deferred. Admissions standards have not been lowered at all.
Regarding covering debt, Stevens is aiming (and is highly likely to be successful) in running a surplus for FY2009, after depreciation. I believe Stevens has already been running a surplus before depreciation for a year, if not two. There’s no need to just create majors or lower standards to “cover debt” (assuming you mean deficit–I don’t know of any Stevens debt). Stevens is currently in a sound fiscal position, previous (alleged) misjudgments and current GFC notwithstanding.
Regarding your (later) comments about B&Ts at Stevens, B&Ts make nearly $14,000 more coming out of Stevens than graduates of comparable programs at other universities. Even if you feel B&Ts are of a lower-caliber than the rest of Stevens undergraduates, Stevens’ B&Ts are still incredibly valued and further enhance the Institute’s reputation. I know you said you wouldn’t argue about it, but I feel it’s important to make the point anyway.
In response to boatguy who said:
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January 4th 2010 - 10:43:16 |
“Undergraduate admissions has not lowered standards at all. In fact, while application rates have gone up in recent years, acceptance rates have gone down. This means that Stevens is accepting a higher-quality student in general”
A lower acceptance rate does not necessarily mean higher-quality students are being accepted. Do you have any information regarding the average QUALITY of admitted students? Has the average SAT score remained constant or increased? Has the average class rank increased?
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January 15th 2010 - 13:31:46 |
Harold Raveche, president of Stevens, has already announced that he will not continue as
president after June 30, 2010.
Stevens Institute of Technology and the New Jersey
Attorney General’s office have agreed to a settlement of a lawsuit filed by the Attorney General against
Stevens last September, as well as a separate suit filed by Stevens against the Attorney General.
http://www.stevens.edu/pdf/Stevens_AG_Release.pdf
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January 15th 2010 - 14:20:38 |
the $40mm loss at stevens pales in comparison to the multibillion dollar destruction of the harvard endowment. now if they’d only charge the guy responsible… or instead make him Obama’s economic czar!?!?!? crazy world we live in
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January 15th 2010 - 16:35:34 |
“Stevens also agreed to setting term limits for trustees and board leaders, including a 15-year term limit for the chairman and vice chairman of the board.
Under that rule, Chairman Lawrence Babbio would be able to serve another three years on the board. Milgram had originally sought to have him removed from office.”
In addition to this, Raveche will get his base salary until 2011, and will get full compensation fornon-compete and consultancy arrangements until 2014.
Isn’t it a little ironic that Anne Milgram is out of her seat shortly and these guys get to stick around for a while?
I mean seriously, Raveche is getting paid as a consultant to help the transition for whoever is his replacement. To “show him the ropes” I guess.
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January 15th 2010 - 17:29:46 |
Mathematics indeed.
http://www.youtube.com/watch?v=ycJ5m5Mt9JE
In response to jazzeru who said:
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January 15th 2010 - 22:12:09 |
Aaahhh…does this mean I won’t see in Elysian dog run the “easter egg puppies”, as I called yellow lab sister/brother puppies, now yearlings? (“easter egg” because spring puppies with bright purple and pink collars). Scout and …what is the other’s name?
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March 12th 2010 - 16:13:44 |
hahaha this is such a good example of making news of nothing. We all know how this case ended a few months ago.
Now someone is like “wait… a school that does a lot of research got money for doing research… what if they misspent some of it????”
how is this news abc. how.
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March 12th 2010 - 16:16:45 |
I could make news out of what-if scenarios all day long if abc wants to put me on their payroll.
Breaking News: What if last months snowstorm (which has since melted and been forgotten about) dumped 12 inches of snow on us instead of 10??? Stay tuned for more on this developing story….
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