By Pranav Joneja (ME ’18)
On September 2, 2015, the Office of the Attorney General (OAG) filed papers at the Supreme Court of the State of New York announcing that the Board of Trustees (BoT) and the Committee to Save Cooper Union (CSCU) have reached a legal settlement. The litigation, originally levied in May 2014 by five petitioners “sought an injunction against charging tuition.”
The five petitioners are: Adrian Jovanovic, an alumnus of the engineering school; Mike Essl, a faculty member of the school of art; Toby Cumberbatch, a faculty member of the school of engineering; Claire Kleinman, a current student in the art school; and Isabella Pezzulo, an accepted student who “had to decline her spot because of the decision to charge tuition.”
The respondents include Cooper Union’s Board of Trustees at the time. Among them are Jamshed Bharucha, former President of The Cooper Union, and five other Trustees who resigned from their roles before the lawsuit was: Mark Epstein, former Chairman of the BoT; Francois de Menil; Catharine Hill; Monica Vachher and Daniel Libeskind.
Documents published by the Attorney General’s office provide a comprehensive investigation of financial mismanagement, a detailed account of inadequate oversight, and a categorical record of failures to do contingency planning.
The Pioneer has summarized the Attorney General’s findings:
1. In 1998, Cooper Union negotiated a deal to lease the land under the Chrysler Building to Tishman Speyer. The deal includes a provision to “reset the rent in 2018 based on an [updated] valuation of the property;
2. President Campbell’s administration took the decision to take on a $175 million loan in 2006, secured by a mortgage on the Chrysler property. The loan was intended to finance the construction of the New Academic Building, provide liquidity to Cooper Union’s investment pool, and other immediate expenses. While making the decision, there is no evidence that the Board took into account conflicts of interest, the real feasibility of implementing cost-cutting measures, or the significant disadvantages of the loan deal offered by MetLife. These include budgetary constraints of spending one-fifth of Cooper’s annual budget for the annual debt service payments of $10-15 million.
3. President Campbell and Mark Epstein “misinformed the community, [despite having] sufficient information to know the truth of the school’s increasingly dire [financial] situation.”
4. Though the financial crisis was acknowledged upon President Bharucha’s arrival, the problems persisted. The root causes were his administration’s reliance “on unsupported assumptions” for budgeting, “over-centralization of management and the failure to communicate with non-administrative constituencies.” Moreover, in conjunction with the BoT, he announced the decision to charge tuition in 2013.
5. In response, “students began an occupation of President Bharucha’s office to protest the decision to impose tuition.” “The occupation ended when President Bharucha and the Board agreed to the formation of a ‘Working Group’ that would be charged with exploring alternatives to tuition.” “The Working Group was deprived of the time and resources to offer comprehensive, responsible alternatives tuition.” Moreover, Former Engineering Dean Teresa Dahlberg led in the publication of a “minority report in response to the Working Group”, which “served to alienate the wider community from the administration.” Ironically, “while deeming the Working Group’s [proposals] to be unreliable, the Board failed to subject President Bharucha’s proposals, including the Financial Stability Plan, to rigorous analysis.”
Following the investigative findings, the attorney general made use of his right to intervene pursuant to the laws of the State of New York to ensure the proper administration of “Peter Cooper’s irreplaceable gift to the people of New York.” In fulfilling his duty as parens patriae (legal protector of citizens unable to protect themselves), the attorney general prescribed a Consent Decree, a document outlining changes to be made to the bylaws and operations of The Cooper Union’s administration.
The provisions in the Consent Decree were summarized by the Committee to Save Cooper Union.
1. Cooper Union’s Board of Trustees, together with the community, will work to return Cooper Union to a high-quality, sustainable, tuition-free model as soon as practical. A special committee of the Board will be dedicated to development of a strategic plan to return the school to its traditional tuition-free policy;
2. Alignment of the trust and charter of the school, through the cy pres petition, to reflect the evolution of the institution into its modern form and provide for judicial oversight of the effort to return to a full tuition scholarship model;
3. Expansion of the Board to include student trustees (2), additional alumni trustees (2), and faculty and staff representatives (6);
4. Establishment of the Council of the Associates of Cooper Union—comprised of the alumni, student, and faculty trustees—with the charge to develop a full plan and proposal for The Associates of Cooper Union;
5. Appointment of an independent financial monitor who will be responsible for evaluating and reporting on the financial management of Cooper Union, including compliance with the Consent Decree;
6. Transparent disclosure of Board materials, budget documents, and investment results;
7. Formation of a board committee to further reform the school’s governance; and
8. An inclusive search committee to identify the next full-term president.