I really wonder how much this is political gamesmanship but you have to think this was a long time coming but the financial problems Stevens Institute of Technology has had in the past. It’s a little ironic this gets announced on the day that Stevens held a humanities forum on the corruption of Jersey politicians and politics.
Plenty of angry sentiments amongst the students from what I have gathered so far but I can’t say it’s all one sided. Some people definitely don’t like the timing of this announcement with an election coming up in about a month or so but we’ll see what kind of impact this really ends up having when all is said and done.
I wouldn’t expect this to be a speedy process but this certainly livens up Senior year as if Hoboken didn’t already have enough going on. Credit to Professor Wharton for linking the article – I’ve attached the entire piece but only partially available on the main page. Click the headline to read the entire article.
Stevens Institute of Technology makes pre-emptive move as attorney general prepares to sue the school
Attorney General Anne Milgram plans to file a lawsuit Thursday against Stevens Institute of Technology, charging the school with fiscal impropriety and seeking to remove its top two leaders, a spokesman for her office said tonight.
Spokesman David Wald said the state’s two-year investigation also discovered misappropriation of endowment funds and excessive compensation.
Seeking to pre-empt any damage to the Hoboken school’s reputation, Stevens filed its own lawsuit against Milgram today, according to court papers. The school’s suit asks for any case to be pursued through confidential arbitration.
The lawsuit also accuses the attorney general of overstepping her authority by threatening legal action against the private school if it did not alter its business practices.
Milgram met with Stevens’ board of trustees on Sept. 2 to outline her case. According to the school’s lawsuit, she said she was planning “devastating” legal action that would raise “accreditation and other issues,” as well as seek leadership changes and independent oversight.
At that point, according to Stevens’ lawsuit, Milgram said she would press her case unless the board agreed within two weeks to make “non-negotiable” changes.
“The board’s view is that the attorney general has wildly overstepped her authority by trying to substitute her judgment for that of a Board of Trustees that is composed of sophisticated men and women,” said Pete McDonough, spokesman for the board. He said the leadership Milgram questioned has turned Stevens into “an educational powerhouse.”
Stevens’ lawsuit, filed in Superior Court in Hudson County, argues the changes Milgram asked for would strip the board of trustees of its power to run the school, which specializes in engineering, computing and hard sciences.
The proposed changes “are designed to wrest control of management and oversight of Stevens from the lawfully constituted Board of Trustees and cede that authority to the Attorney General,” the lawsuit says.
Wald declined to discuss the state’s settlement offer, but he said Milgram has legal authority to oversee and file legal action against nonprofit corporations like Stevens. He said the state was seeking to remove school president Harold Raveche and board of trustees chairman Lawrence Babbio.
“We had hoped the board would act in the best interests of the university instead of filing this frivolous lawsuit,” Wald said.
Wald did not specify all of the state’s charges against Stevens but pointed to Raveche’s 2008 salary of more than $1 million as an example of excessive compensation.
According to the school’s lawsuit, Milgram’s allegations of misconduct are inaccurate, have already been corrected or are not illegal.
Questions have previously emerged about Raveche’s salary, which passed the $800,000 mark several years ago. The school also gave him almost $1.5 million in low-interest loans to buy and renovate a house on the Jersey Shore and a ski retreat in Vermont.
When Raveche arrived at Stevens in 1988, the chemist and former dean charted a course of steady expansion. He invested heavily in new buildings, emerging academic and research sectors and athletic fields. Since 1988, Stevens’ student body has more than doubled to 5,700 undergraduate, graduate and doctoral students, according to school officials.
But in 2004, after about a decade of aggressive growth, questions about Stevens’ finances started bubbling. A faculty committee asked veteran professor Donald Merino to look over the school’s books after Raveche proposed more hefty spending. Merino found several skeptical reports from the ratings agencies Moody’s and Standard and Poor’s, which questioned the school’s sizable debt and operating losses, including a deficit of $8.5 million in 2003.
Since then, the credit agencies have been more positive, noting strong demand from the niche of students Stevens serves. In 2007, Standard and Poor’s said improved financial oversight would likely translate into better performance.
McDonough said the Middle States Commission on Higher Education praised the institution’s improved oversight in a report several years ago. The commission accredited the school in 1927 and re-accredited it last year, according to its website.
School leaders fear a lawsuit could damage the school’s reputation, affecting grant applications, government contracts and student recruitment.
“A lawsuit by the Attorney General would be particularly devastating at this juncture because Stevens had planned to undertake a major capital campaign, by which Stevens is trying to build its endowment through major gifts and to develop and increase annual giving by alumni and friends,” the school’s lawsuit reads.