Roberston family calls Princeton ‘an Ivy League Enron.’
By: Jeff Milgram
Calling Princeton "an Ivy League Enron," the Robertson family on Thursday accused university officials of diverting more than $100 million from a special fund set up to train graduate students for government careers in foreign affairs.
Citing documents obtained during the discovery phase of a lawsuit they filed against the university and an internal report by a former employee of the university’s Office of Religious Life, the family claims that "the pattern and practice of diverting donations from their intended purpose" is not limited to the Robertson Foundation fund, but is "systemic" at Princeton.
"I see this as … the Ivy League Enron," William Robertson said Thursday during a press conference at the Marriott at Lafayette Yard in Trenton, referring to the Texas energy company whose collapse benefited high-ranked executives, but raised questions about its auditing standards.
"They have hurt our country. They have hurt my family," Mr. Robertson said. "These offenders have now been caught." On Tuesday, the Robertson family, the children of the late Charles and Marie Robinson, asked a New Jersey Superior Court judge for permission to amend their two-year-old lawsuit against Princeton University.
"My parents’ gift, $35 million in 1961, was one of the largest, if not the largest, gift for higher education in history," Mr. Robertson said. "Their gift was not to Princeton University, but to the Robertson Foundation, which was and is a separate legal entity with a specific mission." The foundation is now worth $600 million.
The money, Mr. Robertson said, was to be used to prepare graduate students at Princeton’s Woodrow Wilson School of Public and International Affairs for careers in the federal government.
In addition to control of the foundation, the Robertsons are asking for punitive damages. "Plaintiffs can sue for punitive damages," Mr. Robertson said, "and they could be sizable."
He said the punitive damages, if awarded, would be recycled back into the foundation and used to support graduate programs at other institutions.
Much of the "evidence" uncovered during discovery remains sealed because Princeton has claimed confidentiality, Mr. Robertson said.
"We are shocked and dismayed not only by the extent to which Princeton has raided the Robertson Foundation’s assets, but by the measures Princeton officials have taken to cover up their misdeeds," Mr. Robertson said. "Let this be a lesson to donors and philanthropists everywhere. If Princeton University is playing such donor shell games, it is probably happening elsewhere."
The new filing charges that Princeton engaged in "self-dealing" transactions with foundation assets and concocted a series of elaborate schemes to overcharge the foundation for alleged Woodrow Wilson School expenses.
The amended filing cites a 2003 study by Jessie Washington, a former employee in the university’s Office of Development, who said, "In dollar terms, approximately $1.2 million of money intended to support religious life is being directed toward general funds."
The complaint calls this evidence of a "donor shell game."
Mr. Robertson said the university used $22 million of foundation money on buildings and programs "without notifying the board, without getting a vote by the board." Of that, $13 million went to construct Wallace Hall, located behind the Wilson School.
"They knew what they were doing," Mr. Robertson said.
Since 1961, 200 graduate students have entered U.S. government service under the program funded by the foundation money, Mr. Robertson said. "Princeton’s record is this area has been mediocre at best," he said.
Mr. Robertson said the lawsuit has cost his family more than $1 million.
He said the family is not negotiating a settlement with the university. "I think most people in the United States would prefer to go through them (negotiations) without going to trial," Mr. Robertson said.
The university said the Robertsons were attempting to try the lawsuit in the press.
"After deciding not to address their concerns about the management of the Robertson Foundation through the foundation itself, despite the expressed willingness of the president of the university and the other university representatives on the board to work with them toward this end, the members of the Robertson family instead took their concerns to the courts," the university said in a prepared statement.
"Now, instead of allowing the case to work its way through the court, the family members seek to litigate their case in the press. They do this in part through unsubstantiated and misleading claims and in part through excerpts taken out of context from 140,000 plus pages of documents that have been provided under the normal judicial process.
"To cite one example of an item presented out of context, they allude to one allegation regarding funds in the Office of Religious Life without noting that the allegation was thoroughly investigated and determined to involve no wrongdoing. While the Robertson Foundation case is pending in court, the university remains unwilling to argue the case in the press," the statement said.
"In large measure, the materials released today by the Robertson family restate claims from their original filing that, as part of the judicial process, the university will demonstrate are without merit. The Robertson Foundation was established to support the graduate program of the Woodrow Wilson School, and its board was intentionally created to contain a majority of university appointed trustees. For more than 40 years these trustees have worked assiduously to safeguard and expand the assets of the foundation and to serve the purposes for which the foundation was established. They continue to do so," the statement said.
"The university takes very seriously its fiduciary responsibilities and the purposes for which funds are provided to it directly or, as in this case, to an organization established to support its programs. The university’s filings and other materials will demonstrate its unwavering commitment to these principles as this case continues to move toward trial over the coming months," the university said.
A hearing is scheduled for 9 a.m., July 9 on the request for the amended filing.
The lawsuit is scheduled to go to trial in the fall of 2005.