Letter to the Editor of the Boston Globe, April 2002
Letters to the Editor
The Boston Globe
P.O. Box 2378
Boston, Massachusetts 02107-2378
By E-mail
Re: “Winokur to Leave Harvard Board”
by Beth Healy and Patrick Healy
Ladies and Gentlemen:
Anne Williamson has documented a pattern of institutional corruption by?Harvard University to use?its brilliant academic resources and reputation to promote bid rigging and?insider trading on Russian privatizations —- advantaging Harvard’s?endowment, it’s network of investors and government contract business. US?taxpayers and Russian citizens lost big. It seems Harvard’s?business —funded by US taxpayers through AID—was to help engineer?transfers of public assets at far below market value to a private syndicate?of insiders.
I have described a similar pattern of institutional corruption by Harvard?University at the Department of Housing and Urban Development (HUD.) US?taxpayers and communities lost while Harvard’s endowment, its network of?investors and Harvard government contracts and appointees benefit?significantly from their ability to influence policy and budgets. This?includes Harvard Kennedy School promotion of a housing program that builds?housing for $150,000-250,000 per unit in neighborhoods where single family?homes could be rehabbed and sold for $25-75000.
These events occurred on the watch of Harvard President Larry Summers and?honored Harvard graduate Robert Rubin at the U.S. Treasury. Your article?indicates that Mr. Rubin is under consideration for appointment to the?Harvard Corporation board. He is a former member of the Harvard Management?board.
We have reports during Mr. Rubin and President Summers watch at the National?Security Council and the U.S. Treasury of manipulation of the gold market?and gold prices that has been documented by the Gold Anti-Trust Action?Committee (GATA) and is envisioned by an earlier paper of President Summers.
We have reports as well of the inexplicable disappearance of over $3.3?trillion from HUD and DOD during fiscal years 1998-2000 and statements from appropriations staff?that HUD is being run as a criminal enterprise. This would necessitate the?US Treasury running it as a criminal enterprise as they run HUD with the?help of numerous companies also affiliated with Enron.
Greg Palast, BBC and Guardian Observer correspondent, has documented the use?of secret agreements by the World Bank to engineer transfer of essential?pubic resources in Argentina and other countries into multinational?corporations at below market values. This could only have happened with the?knowledge and support of President Summers and Mr. Rubin in their roles as?Secretary of the Treasury.
These U. S. Treasury policies continue into the new Administration. They are?not the sole responsibility of the leaders of the prior administration.?However, those who promote such policies are fully responsible and?accountable. Harvard is as well, if it chooses to promote them to the?leadership of the Harvard Corporation and University.
Now, Harvard Watch has documented a pattern of institutional corruption in?connection with Harvard’s Enron entanglements. This includes sufficient?questions to merit a serious investigation as to whether Harvard Management?personnel and/or one of the funds that manages money for Harvard, Highfields?Capital, engaged in insider trading or were complicit in a “pump and dump”?fraud scheme in connection with Enron securities and offshore partnerships.?Highfields was established by a Harvard Management employee and is reported?to have been paid approximately $30MM in annual compensation by Harvard?(See Harvard’s tax return). Enron’s former CEO, Jeff Skilling, is a former partner?of Ron Daniels, Harvard’s Treasurer who manages Harvard Management.
In addition, the use of Harvard’s academic talent at Harvard Business School?and Harvard’s Kennedy to justify federal and state energy “de-regulation?and privatization” policies was simply intellectual air cover for more?transfers of public assets and resources at below market prices to private?investors, which includes Harvard Endowment and its investment network.
The time has come to ask whether Harvard’s entire institutional scheme is?appropriate to qualify for a tax exempt status under US tax law. Why should?Harvard not have to pay taxes if its activities simply justify the theft of?taxpayers resources and increase the burden to honest taxpayers? Harvard’s?endowment increased from $4 billion to $18 billion between 1992 and 2000, in?part as a result of the “privatization” boom it helped promote in?combination with its tax-exempt status. Based on what we have seen in?Russia, at HUD, in the countries described by Mr. Palast’s work and now in?connection with Enron, we need to ask what the American and the global?community have paid in terms of shrinking the pie.
How much human, intellectual, environmental and financial capital has been?destroyed just so it could be transferred into the hands of a few?. Why?should honest hardworking people continue to help finance a tax scheme which?is harmful to us? A review of the evidence suggests that the rich are?becoming richer—not based on performance or a commitment to free?markets–but because they have learned how to lie, steal, bribe and cheat?successfully. The time has come to ask whether we should continue to help?finance Harvard’s promotion of such a leadership culture.
How many honest reporters, government officials and Harvard students will?have to sacrifice their time and careers before we address what is?happening? How long will we go without the rule of law applied to the?Harvard Endowment and their friends? Is Harvard’s intellectual brand to?become a joke? This cannot possibly be in the best interest of the wider?Harvard community. Harvard’s graduates and employees include thousands of?decent fine people who have added much to our world. As I drive throughout?America, reference to someone being a Harvard graduate or professional is?increasingly a term of derision — as if a Harvard diploma is a way that?”Tony Soprano” gets on the right corporate boards and into the right country?clubs.
In Congressional testimony, Herbert S. (“Pug”) Winokur, Chairman of the?Enron Finance Committee, indicated that he had hired and managed executives?and auditors that mislead him. Based on Winokur’s description of his?negligence as an Enron board member, questions were raised regarding his?appropriateness to serve as a board member of Harvard Corporation and?Harvard Management. He has had the discernment to resign.
I would hope that Mr. Winokur’s resignation would not divert attention from?the illumination and healing of a deeper institutional cancer within the?Harvard leadership, the management of Harvard’s endowment and Harvard’s?government policy and contracting community.
Sincerely Yours,
Catherine Austin Fitts?President?Solari, Inc.?Former Assistant Secretary of Housing, First Bush Administration?Former Managing Director, Dillon Read & Co. Inc.