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Brandeis University's Community Newspaper — Waltham, Mass.

University contracts with board members’ companies

Published: September 17, 2010
Section: Front Page

Every week, The Hoot will publish an article related to the financial organization of the university as part of our series Financial Exposure. Each article will be based on copies of the university’s tax exemption forms obtained by The Hoot.

Brandeis has conducted business with two companies whose owners are closely related to the university’s board of trustees, something not prohibited by its conflict of interest policy, according to a copy of the university’s tax exemption forms for Fiscal Year 2009 obtained by The Hoot.

Last year, the university paid more than $10 million to Aramark, the university’s dining services provider. Aramark’s co-owner, Joseph Neubauer, is married to Jeanette Lerman, who is on the Brandeis board.

The university also has invested more than $7.4 million to the investment firm Highfields Capital LTD, which was co-founded by vice chairman of the board Jonathon Jacobson.

According to the board’s bylaws, “a trustee may be a party to, or may be financially or otherwise interested in, a matter affecting the university … provided that such interest shall have been disclosed and approved” by the Personnel Compensation and Ethics Committee, which oversees the disclosure forms.

According to the tax exemption form, trustees have “an obligation to act in the best interest of the university and must not permit outside financial or personal interests to interfere with that obligation.”

The disclosure forms are also overseen by university general counsel Judith Sizer.

Article VII of the board’s bylaws requires trustees to recuse themselves from matters in which they have a conflict, stating that the conflicted trustee can not vote on the matter, nor should they “use his or her personal influence in any manner with respect to such matter.”

Though they recuse themselves, Jacobson sits on the board’s committee on investment, which makes decisions directly related to his company. Lerman sits on the Students and Enrollment committee of the board, which deals with dining services, along with the Budget and Finance and Physical Facilities committees, Brandeis Senior Vice President of Communications Andrew Gully wrote in an e-mail to The Hoot.

Neither Lerman nor Jacobson received any form of compensation from Brandeis directly resulting from these transactions or otherwise.

Gully wrote that the university has had a contract with Aramark since 1998, while Lerman joined the board in 1995. However, he noted that the tax exemption forms attest that the university renewed its contract with Aramark in FY2009 as part of “a competitive bid process and the normal procurement process.”

The university’s investment with Highfields Capital was “entered into at arms length in the ordinary course of business,” according to the tax exemption form.

Gully would not disclose how long the university has been invested in Highfields Investment, writing “as a matter of practice, the university does not share information regarding its investments.” According to the tax exemption form, the university’s investment in Highfields Capital predates Jacobson’s 2006 appointment to the board of trustees.

Gully said the $7.4 million noted on the form indicates the amount of money the university has invested with Highfields since the beginning of their business relationship. He would not comment as to whether any portion of that figure was invested after Jacobson was appointed to the board.