Key Takeaways
- • University of Michigan regent Andrea Fischer Newman pledged to return thousands of dollars in campaign contributions from three wealthy businessmen with direct influence over the university's $11 billion endowment, signaling institutional acknowledgment of potential conflicts of interest.
- • A Detroit Free Press review of state records identified nearly $30,000 in campaign donations to two Board of Regents members from donors associated with funds receiving U-M investments, plus an additional $29,000 from a family guiding the university's investment strategy to the board's longest-serving member.
- • New York developer Stephen Ross contributed $2,000 to Newman's 2010 re-election campaign; 16 months later, Newman seconded the motion approving a $35 million university investment in a real estate development fund sponsored by Ross' firm—a sequence that Georgetown University law professor Brian Galle characterized as having "the stink" of potential backscratching.
- • A University of Michigan spokeswoman categorically rejected suggestions of wrongdoing in how the institution manages donor relationships or investment decisions, positioning the donations as separate from fiduciary governance.
Summary
A governance conflict-of-interest issue has surfaced at the University of Michigan involving campaign donations from wealthy donors who simultaneously influence or benefit from the institution's investment decisions. The Detroit Free Press investigation revealed that Board of Regents members accepted substantial campaign contributions from businessmen with direct connections to university-controlled investment funds.
Andrea Fischer Newman, a regent, responded to the Free Press's findings by committing to return donations from three wealthy donors who hold sway over millions in university investments. The most notable case involves New York developer Stephen Ross, who contributed $2,000 to Newman's 2010 re-election campaign. Approximately 16 months after that contribution, Newman seconded the motion that led to the university's approval of a $35 million investment in a real estate development fund sponsored by Ross' firm. This sequencing raised immediate concerns among governance analysts about potential quid pro quo arrangements.
State records reviewed by the Free Press documented broader patterns: two Board of Regents members collectively accepted nearly $30,000 in campaign contributions from donors associated with funds receiving U-M investments. Additionally, a family involved in guiding the university's investment strategy contributed more than $29,000 to the board's longest-serving member. Brian Galle, a Georgetown University law professor, commented on the arrangement: "Something doesn't have to be obviously illegal for it to be the kind of thing a flagship state university should be 100 miles away from. There is a stink to this arrangement, not to say that it's illegal. It looks like, you know, backscratching at a minimum."
The university has maintained its position that no wrongdoing occurred. A spokeswoman stated the institution rejected "any suggestion that there has been any wrongdoing on the part of the university or members of our Board of Regents in how we interact with our donors or manage the university's investments." Newman's decision to return the donations represents a de facto acknowledgment of at least the appearance of impropriety, even if legality remains unquestioned.
Andrea Fischer Newman, a regent, responded to the Free Press's findings by committing to return donations from three wealthy donors who hold sway over millions in university investments. The most notable case involves New York developer Stephen Ross, who contributed $2,000 to Newman's 2010 re-election campaign. Approximately 16 months after that contribution, Newman seconded the motion that led to the university's approval of a $35 million investment in a real estate development fund sponsored by Ross' firm. This sequencing raised immediate concerns among governance analysts about potential quid pro quo arrangements.
State records reviewed by the Free Press documented broader patterns: two Board of Regents members collectively accepted nearly $30,000 in campaign contributions from donors associated with funds receiving U-M investments. Additionally, a family involved in guiding the university's investment strategy contributed more than $29,000 to the board's longest-serving member. Brian Galle, a Georgetown University law professor, commented on the arrangement: "Something doesn't have to be obviously illegal for it to be the kind of thing a flagship state university should be 100 miles away from. There is a stink to this arrangement, not to say that it's illegal. It looks like, you know, backscratching at a minimum."
The university has maintained its position that no wrongdoing occurred. A spokeswoman stated the institution rejected "any suggestion that there has been any wrongdoing on the part of the university or members of our Board of Regents in how we interact with our donors or manage the university's investments." Newman's decision to return the donations represents a de facto acknowledgment of at least the appearance of impropriety, even if legality remains unquestioned.
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