Читать книгу Behind the Hedges - Rich Whitt - Страница 7

Little noticed outside the realm of higher education, a sea change has occurred over the past few decades in how America supports its great public institutions of higher learning. As enrollments and programs have steadily increased, so too have budgets, endowments, tuition, and fees. These shifting tides have buffeted the major universities and created stress fractures in the financial underpinnings of some traditional bases of support for higher education. Nowhere are these cracks more apparent than in Athens, Georgia, home of the state’s flagship university.

This book examines the circumstances and aftermath of a highly public family squabble that erupted in 2003 within the usually collegial University of Georgia community. The clash involved a controversial new president, a powerful and eccentric wealthy businessman, a revered and iconic football coach, spineless politicians, other wealthy businessmen, backroom deals, hanky-panky, and a compliant media that proved itself a toothless watchdog over the public interest.

There was also Big Money, Big Football, adultery, and more than a whiff of Big Daddy’s “odor of mendacity.”

What went on at Georgia—and is still unresolved—was unique and highly personal to many of its participants, but the conditions leading up to the events were symptomatic of the pressures facing most big public universities across the country.

Historically, private colleges and universities have depended heavily on student tuition and private support as their major source of revenue, while public institutions have been funded from a combination of state appropriations and student tuition. But in recent years, enrollment pressures and infrastructure costs have skyrocketed, while state funding has remained static or declined. “Even within the public sector with its government funding, revenues from tuition and fees increased 318 percent from 1980 to 1996 while revenues from government appropriations during that time only increased 125 percent. Little evidence exists that this trend will change between now and 2010,” the National Center for Education Statistics presciently observed in a summary on higher education accounting for the online Education Encyclopedia at StateUniversity.com. In fact, by 2008, most major public universities seemed to be receiving less than half of their annual budgets from their respective states’ taxes. The implications for the nation’s public universities are profound.

The University of Georgia, for example, now gets less than a third of its budget from state tax dollars, down from 45 percent just a decade ago. Other states have seen even more dramatic change. The Colorado legislature cut state support for its higher education institutions to less than 10 percent of their annual revenues and began issuing “vouchers” to students who attend both public and private universities. South Carolina’s governor suggested privatizing some of his state’s public universities. The University of Virginia, among others, has bargained decreased state funding in return for greater autonomy in dealing with private financial sources.

This dramatic shift in funding has given rise not only to huge tuition increases but also to increased reliance on private gifts to supplement public university budgets. In 2007, colleges and universities collected $29.75 billion in charitable contributions, according to the Council for Aid to Education. Many universities, both private and public, have built up huge endowments through capital campaigns tapping alumni, corporations, and charitable foundations for gifts. As of 2007, endowments to higher education institutions nationwide totaled a staggering $411 billion. Even the richest public school endowment is peanuts compared to Harvard’s $34.6 billion and Yale’s $22.5 billion, but the public institutions are working hard. However, the 2008 stock market crash has hammered all college endowments. Nearly every public university in America seems to have a major fundraising campaign underway or in the planning stage. Like their private sisters, public universities now rely on private donations to attract top academics, pay for construction projects, and often to keep the lights burning. Without private dollars and the volunteers who raise the money for them, America’s great public universities would cease to function or at least would be forced to operate on a greatly reduced scale.

Not surprisingly, this shift has enormously increased the prestige and power of the affiliated private foundations that have emerged to raise money for public schools. As we shall see, a large pot of privately controlled money earmarked for a public institution was at the heart of the trouble between the University of Georgia Foundation and the University System of Georgia Board of Regents from 2000 to 2003.

In Georgia—the southeast’s fastest growing state—demand for higher education has soared. The University System of thirty-five public colleges and universities expects to expand student capacity by 40 percent by 2020, with enrollment increasing from the current 260,000 to more than 360,000. The system is adding about 10,000 students every year. Ironically, an innovative step by state government to make college education more affordable to average students had the unintended consequence of exacerbating the conflict between the UGA Foundation and UGA President Michael Adams and his supporters among the Regents.

The University of Georgia is not just any school. Chartered in 1785 as the nation’s first state-supported university, it has grown from a place “where young men, primarily sons of the privileged, came to receive a classical education that included Greek and Latin” and a place that “turned out the future political leaders of the state—a tradition that continues to this day” into a major public research institution. It is an NCAA Division 1 athletic powerhouse, the home of generations of the nation’s most famous bulldog, an incubator for both science and rock music, a place known for partying and studying, and, not incidentally, was the employer of an institution named Vince Dooley.

For many years, generations of Georgia families had followed one another to Athens, creating not only a legacy of loyalty but a sense of entitlement. That began changing after the Georgia General Assembly passed the HOPE Scholarship program in 1993 and the voters approved a lottery to fund it. The HOPE Scholarship offers free college tuition to in-state students who maintain a “B” average in high school and college. Many of these high-achieving Georgia students decided they wanted to get their free educations at the University of Georgia. Applications increased, SAT averages rose correspondingly, and soon a school known more for tailgating parties and football was beginning to gain national attention for academics.

Meanwhile, some children and grandchildren of UGA graduates whose families had attended the school for generations found themselves turned away because of the rising standards. Their resentment naturally found its symbolic target in the UGA president’s office, which by 1997 was occupied by one Michael Adams, whose rather interesting personality, leadership style, and behavior we will explore further in this book.

President Adams was one flash point of the 2003 explosion. The University of Georgia Foundation was another.

Publicly funded institutions like the University of Georgia and Georgia Tech are relative Johnnies-come-lately in the business of private educational fundraising. Nevertheless, the Georgia Tech Foundation has amassed more than $1 billion in endowments and the UGA Foundation has just more than $500 million.

A private arm of the university, the UGA Foundation had for years acted as a club whose mission was simply to raise money for the university. The Foundation members—mainly wealthy, conservative business leaders who are passionately committed to the university—met annually at Sea Island to choose officers, play golf, and talk about the glory that was “Old Georgia.” But the growing reliance on private fundraising meant that the Foundation was increasingly important and powerful. The UGA Foundation had not been a big player in fundraising efforts, but now it was embarking on the largest capital campaign in the university’s history. And in addition to its fundraising role, the Foundation had begun paying nearly half of Adams’s annual salary as well as a stipend to his wife. Many on the Foundation had opposed and deeply resented putting Mrs. Adams on the payroll. There was a sense among Foundation members that it ought to have some say in who was spending their money.

University foundations are private corporations and are registered by the IRS as public charities. They receive tax-deductible gifts and pledges, manage investments of assets, and distribute endowment gifts for scholarships and other purposes. They exist to support their schools and have no role in the hiring and firing of university personnel. Yet because of the importance of private financial support, foundations hold enormous sway with university governing bodies. Sometimes that leads to conflict and at Georgia, the stage was set for a clash.

Tremendous growth coupled with cutbacks in state funding had put the university on shaky financial footing. Programs were being cut back, tuition increased, and professors’ wages frozen while Adams’s own income was increasing substantially. Meanwhile, UGA had fallen well behind comparable institutions in raising private cash to supplement dwindling state support. School officials had identified $1 billion of critical needs but were jittery about a fundraising effort that large. The Foundation ultimately undertook a more modest $500 million campaign, with plans to launch a second fundraising campaign once they met the first goal. Foundation leaders were predictably anxious that spending construed as unnecessary could turn off potential contributors. Reports that Adams was spending lavishly on various pet projects did not endear him to the Foundation officers.

Nothing is more harmful to private fundraising efforts than the appearance of abuse by a college president. In his handbook on university foundations, Joseph F. Phelan, founding president of the University of New Hampshire Foundation, warns against presidents using foundation discretionary accounts for questionable purposes. Specifically, Phelan cautioned against using foundation funding to augment a president’s salary or to underwrite exclusive club memberships or social or political activities.

As we shall see, Adams was violating most of these cardinal sins. He got Foundation money to pay for expensive meals, trips, and a salary supplement. No other UGA president had ever tried to get his wife onto the Foundation payroll. Tensions escalated when some members of the Foundation’s governing board repeatedly called his hand on questionable spending.

However, in the aftermath of 2003, many observers felt that the Foundation had overstepped its bounds in the clashes with Adams. The Phelan handbook also cautioned that foundations sometimes take their independence too seriously and attempt to exert undue influence on their university, “including the president’s length of service.”

In the end, of course, the UGA Foundation failed in its effort to get Adams fired. The conflict over the Adams affair split the Bulldog nation into warring camps, but by the time the story disappeared from the front pages of the newspapers it was still not clear exactly what had been contested, why, or who won. This book, based on a thorough review of documents and on interviews with as many of the principals as were willing to speak, explores those questions.

At the time, Adams’s decision to retire the popular athletic director and former football coach Vince Dooley was widely proffered by the media as the cause of the conflagration. But the seeds of strife were sown years earlier. Dramatic political and institutional shifts within the state of Georgia and its flagship university had created new fault lines that set the stage for upheaval.

Adams had been an unpopular choice with the UGA faculty when he was named president in 1997 because of what the academics saw as his lightweight credentials. He did little after his arrival to win over the hearts and minds of the faculty, which saw him as arrogant, aloof, and dismissive of their concerns. And even though he wanted its money, Adams’s relationship with the University of Georgia Foundation was no better.

As it would turn out, Adams had support where it counted.

In Atlanta, the once dormant Republican Party had captured both the governor’s office and the state senate. In January 2003 George Ervin “Sonny” Perdue III was sworn in as Georgia’s first Republican governor since Reconstruction. Perdue’s surprising victory over Democrat Roy Barnes set in motion a realignment of alliances that played out dramatically behind the scenes as Georgia’s elite wrestled for power and control. Traditional power centers were shifting and long-time political alliances fell apart. Several conservative Democrats in the legislature switched parties.

By 2003, Adams had been in Athens for five years. He had survived a major scandal in the men’s basketball program and questions about his spending habits and had engineered himself a hefty salary increase. But he had made some powerful enemies on and off the UGA Foundation. Some prominent Atlanta alumni had already begun discussions about whether Adams was up to the task of running a major research university. When the Dooley story broke, Adams’s critics figured the time was ripe to go after him. Thousands of Dooley supporters came out of the shadows to make their opinions known. What they could not know was that Adams had won the Dooley battle before it began. In conversations with Dooley and others, Adams had subtly let him know that he had the backing of “some people” who felt it was time for a change in athletic directors.

That brings us to Donald Leebern, the colorful and wealthy liquor distributor who is a University System Regent and one of the most interesting pieces in this complex story. Adams never identified to Dooley those “some people” but it now seems obvious that Adams had the backing of Governor Perdue and Leebern. Adams also told reporters that he had consulted with people “at every level” before making the Dooley decision.

The public uproar over the Dooley dispute was contrasted by the UGA faculty’s reaction to it. Not a single faculty member stepped forward to defend the beleaguered president. Fourteen academic deans issued a statement saying only that the university’s interests would be served by moving past the controversy. Adams simply shrugged it all off, perhaps knowing that his job was secure. As the weeks wore on, the UGA Foundation commissioned the auditing firm of Deloitte & Touche to conduct an investigation of Adams’s salary and expenses and other issues they felt Adams had mishandled. The report, released in October 2003, confirmed Adams’s misuse of Foundation funds but stopped short of accusing him of criminal acts.

Nevertheless, it was a broad indictment of Adams’s performance and Foundation members thought they had a smoking gun. Several members pushed for a vote of no confidence. But Griffin Bell, the Atlanta lawyer and former U.S. attorney general who was advising the Foundation at the time, and has since died, urged restraint. Bell felt the audit was damning enough but he understood that the Board of Regents, as Adams’s employer, might see it as meddling in their affairs. So Bell advised the Foundation to pass the audit on to the Regents for further action, hoping the Regents would ask Georgia Attorney General Thurbert Baker for an investigation.

That never happened, and instead the Regents and Governor Perdue quickly gave public statements of support to Adams. To the utter consternation of Foundation members, the Atlanta Journal-Constitution (where I worked at the time) picked up on a few paragraphs of the audit mildly criticizing the Foundation for inadequate oversight over Adams’s spending and ran this headline: “Audit targets UGA Foundation oversight, spending by Adams.”

The audit report thus had the opposite effect of that intended by the concerned Foundation members.

Attorney General Baker, meanwhile, took the matter under advisement. For almost three years a spokesman for the attorney general claimed the office was investigating the case. The “investigation” turned out to be merely a review of the audit and of letters written to the attorney general. After his reelection in November 2006, Baker wrote the Board of Regents, strongly condemning some of Adams’s transactions, calling some of them possibly unconstitutional. But the attorney general took no further action.

The Regents’ reaction to the Foundation’s audit report drove a wedge deeper between the two UGA powers centers. The Foundation threatened to quit paying Adams’s salary stipend. The Regents responded by ordering Adams to terminate the university’s association with its foundation. There followed a period of negotiations that lasted almost two years. At various times both sides indicated they had worked out an agreement, but in April, 2005, the Regents pulled the plug on the Foundation a second time and began organizing a new fundraising body. This ended a seventy-year relationship between the two entities.

Most Georgians have now moved past the extraordinary public squabble and few of the key players are eager to revisit the issues. But five years after the blowup, the fallout still haunts the university and hinders fundraising efforts. Although UGA met its $500 million capital campaign goal, it did so only by counting donations required for priority purchase of football tickets. Those monies were never supposed to be part of the capital campaign, according to Billy Espy, a leader of the campaign.

And the Foundation members who witnessed close up what they saw as Adams’s perfidy can’t forget.

“The issue to me is trust. And Dr. Adams violated our trust,” one trustee said shortly after the audit report was released. The critics feel the same way today.

The late Griffin Bell didn’t believe the controversy would die until Adams is gone from the university. “At some point,” he said, “we are going to have to deal with the problem.”

This book examines in some detail the “problem” Bell referred to. It reviews the history of the relationship between the university and the Foundation, profiles Michael Adams and looks at how he was selected as UGA president, examines his actions as president that caused conflict with Foundation officials, and puts in perspective the crisis which unfolded in 2003 and its implications for the university and the state today. Along the way we learn more about Michael Adams, Vince Dooley, and Donald Leebern, as well as a number of other people who are not as well known but who were and are involved in this controversy.

Like most big stories, this one involves money, power, and personalities. And to keep it moving, it also has football, sex, and fistfights.