#6038
#6
Boston Globe
January 15, 2002
In the courts
By Alex Beam (beam@globe.com)
There's a bit of sticky wicket looming for Harvard president Lawrence Summers down at the federal courthouse. The $120 million ''false claims'' case US v. Harvard et al. is lurching forward, and Summers, in his role as an ex-Treasury Department official, is getting caught up in it.
The suit is informally known as the Shleifer-Hay case; it was filed in the fall of 2000, before Harvard chose Summers as president. The government is accusing Harvard economics professor Andrei Shleifer and former Harvard employee Jonathan Hay, and their wives, of improperly enriching themselves in Moscow. At the same time, it's alleged, they were controlling tens of millions of taxpayers' dollars flowing to Russia through Harvard's now-defunct Institute for International Development. In addition to the four individuals, the university is also a named defendant.
It's LawyerFest 2002 down there, with government attorneys facing down mouthpieces from Harvard; Goodwin, Procter; Skadden Arps; Nutter, McClennen & Fish; and several other firms. An attempt at mediation by retired judge David Mazzone failed, and the defendants are now completing their bids for summary judgment. Assuming they fail - dangerous to assume! - the case will go to trial. Government lawyers have introduced ''the status of Lawrence Summers, Harvard's president, as an issue of concern'' in the case. Summers is not only the titular head of Harvard, but his name also appears on the individual defendants' witness list. He was a close personal friend of Shleifer's (he was the professor's thesis adviser at MIT) and a vocal proponent of the privatization work that landed Shleifer & Co. in the soup.
Janine Wedel, author of the expose ''Collision and Collusion: The Strange Case of Western Aid to Eastern Europe'' (how very unsurprising that this book is sold out in Harvard Square), notes that, while at the Treasury, Summers actively supported $40.4 million worth of no-bid government grants for Harvard's IID programs in Russia.
''Approving such a large sum of money as a noncompetitive amendment to a much smaller award was highly unusual,'' Wedel told me.
In court papers, the university revealed that ''President Summers has retained separate representation from Harvard and is currently in communication with both counsel for the government and counsel for defendants.'' Summers's new lawyer is Thomas Kiley, most recently noted for defending state Representative Kevin Fitzgerald in the bizarre ''bag lady'' case. In that suit, Kiley's client agreed to return a portion of a small fortune left to him by a mentally ill street person. Kiley says that Harvard will be paying his legal fees.
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