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Brandeis University's Community Newspaper — Waltham, Mass.

Financial disclosure bill to impact university

Published: April 29, 2011
Section: Front Page

A Massachusetts state bill that would require Brandeis and all other universities and colleges to disclose federal and state taxes that would have been paid if they had not been tax exempt is currently with the Joint Committee on Revenue and the Joint Committee on the Judiciary.

The bill also requires universities and colleges to report a list of any holdings totaling more than $10 million and make public the salaries of any administrator making more than $250,000.

A hearing will likely be set in June or July, the committees’ offices said.

This bill was created after a report from the Center for Social Philanthropy at Boston-based Tellus Institute reported that tax-exempt higher education institutions were involved in transactions that were similar to the high-finance-style practices that contributed to the global financial crisis.

The report studied six schools: Boston College, Boston University, Brandeis University, Harvard University, Massachusetts Institute of Technology, and Dartmouth College in New Hampshire.

According to the report, the schools made high-risk endowment investment; were governed by a large number of individuals with close or direct ties to the corporate financial industry; granted large compensations and/or severance packages to financial administrators; and failed to report some potential conflicts of interest among those administrators and their governing boards.

University Spokesman and Senior Vice President for Communications Andrew Gully declined to comment for this story. President Fred Lawrence could not be reached for comment.

In an April 23 Boston Globe article, which focused on the issues surrounding this bill, state Senator Patricia D. Jehlen, a Somerville Democrat and the lead sponsor of the bill said, “They made foolish financial decisions and the question is now, have they changed or are they, like many people on Wall Street, doing the same thing they were before the financial crisis and making other people pay for their mistakes?”

In response, the article quoted Richard Doherty, president of the Association of Independent Colleges and Universities in Massachusetts, saying that his association opposes the legislation and plans to denounce it when it reaches the public hearing process. “It’s unclear to us what public policy problem the bill solves,” he said.

“We think there are any number of provisions in it that would cause harm,” to private higher education.

It is currently unclear how Brandeis will react to the bill.