The Stevens Institute of Technology's Howe Center towers on the banks of the Hudson River like a fortress that has been under siege for months, and now is shrouded in silence.
In September 2009, the New Jersey Attorney General filed a civil lawsuit against Stevens' president, Hal Raveche, and others. The suit alleges gross mismanagement of finances and breaches of fiduciary trust. According to the complaint, Raveche and the Stevens administration's "financial management has been grossly negligent."
Specific allegations include: exorbitant and unjustified compensation paid to Raveche; the use of as many as three sets of financial account books, and secret operations by a small sub-group of the board of trustees who kept vital financial information from the rest of the board.
Of central importance to the lawsuit is Raveche's salary and bonuses, which skyrocketed during the last decade. By 2005, he had become the eighth highest paid college president in America. His salary last year was reportedly $1.1 million — more than received by presidents of Harvard, MIT and Cal Tech. These are much larger institutions whose endowments dwarf that of Stevens.
As a Stevens faculty member during the period of the allegations, I was not privy to any of the multiple accounting books, but there was a perception that a culture of insiders, subject to a separate and highly rewarding set of rules, had developed over the years. Although not mentioned in the Attorney General's complaint or in the press reports, there were similar hefty and rapid increase in salaries for key deans and administrators. For years, the in-crowd played a blackjack player's dream game: Every hand was jacks and aces for them, while the rest of the school got deuces and treys - raises of 2 percent to 3 percent.
It was the secretaries and other "out-crowd" operatives who shouldered the burden of fiduciary responsibility, harried by Orwellian mantras to "save" and "conserve," as pens, paper, and file folders became the currency of fiscal salvation. All the while, top officials traveled the world first class pursuing whimsical schemes, like a failed effort to set up a new Stevens campus in Saudi Arabia in 2001.
Should the general public care about this symphony of shenanigans at a private school? You bet. For one thing, all New Jerseyans are stakeholders in all of our chartered nonprofits and we expect the highest ethical standards of conduct from the stewards of our charitable funds. Stevens receives direct aid from the state of New Jersey in a number of ways, including program grants and research funding from various state agencies and tuition aid for many of its students, money which is then credited to Stevens.
Another reason for citizen concern is that Stevens itself is an important component of the science/technology infrastructure of New Jersey. Thousands of its highly trained grads help power New Jersey's high-tech economy. Stevens is nationally recognized for its research and development programs — and, to be fair, Raveche deserves credit for strengthening Stevens in his first 10 years.
The whiff of scandal and malfeasance has begun to have its deleterious effects, as anecdotal evidence from faculty members suggests that at national conferences, more questions are asked of them about Stevens' current deteriorating situation than about material they present in papers. Fiscal mismanagement may beget smaller donations, a shrinking endowment, fewer scholarship dollars for students, higher tuitions. Credibility of Stevens in the public and private sector can decline; research opportunities are missed and grant opportunities are lost.
For over three months, the administration and board have done little publicly to address and ameliorate legitimate concerns. "Not allowed to comment," say spokespersons. The siege mentality prevails and silence reigns.
Enough silence. We need a meaningful, swift progress toward resolving the matter because citizens of New Jersey and tens of thousands of alumni of Stevens deserve it. We need a change in command of the fortress. President Raveche should voluntarily step aside pending the conclusion of the case.
Silvio Laccetti is a social science professor at Stevens Institute of Technology.