Key Takeaways
- • University of Michigan Regent Andrea Fischer Newman pledged to return thousands in campaign contributions from three wealthy businessmen with direct influence over university investment decisions, following disclosure of potential conflicts of interest.
- • Stephen Ross, a New York real estate developer, contributed $2,000 to Newman's 2010 re-election campaign; 16 months later, Newman seconded the motion approving the university's $35-million investment in a real estate development fund sponsored by Ross' firm.
- • State records review revealed two Board of Regents members collectively accepted nearly $30,000 in campaign contributions from donors associated with funds receiving U-M investments, while a family guiding the university's investment strategy contributed more than $29,000 to the board's longest-serving member.
- • Georgetown University law professor Brian Galle characterized the donation pattern as "backscratching at a minimum," noting that while not necessarily illegal, such arrangements create appearance-of-impropriety concerns inappropriate for a flagship state university managing an $11-billion endowment.
- • University administration rejected allegations of wrongdoing in donor relations or investment management practices, maintaining that all activities comply with institutional standards.
Summary
The University of Michigan faces governance transparency questions after an investigation revealed campaign contributions flowing from wealthy investors to Board of Regents members who simultaneously oversee or influence the institution's investment decisions. The Detroit Free Press review of state records identified a pattern of donations that critics argue creates conflicts of interest at a public university managing an $11-billion endowment.
The most prominent case involves Regent Andrea Fischer Newman and New York developer Stephen Ross. Ross contributed $2,000 to Newman's re-election campaign in June 2010. Sixteen months later, Newman seconded the motion that approved the university's $35-million investment in a real estate development fund controlled by Ross' firm. Newman subsequently committed to returning the contribution and donations from two other wealthy businessmen following the Free Press investigation.
The scope of the issue extends beyond Newman's situation. State records show two Board of Regents members combined accepted nearly $30,000 in campaign contributions from donors associated with funds receiving university investments. Additionally, a family actively involved in guiding the university's investment strategy contributed more than $29,000 to the board's longest-serving member, further illustrating the interconnection between donation sources and investment decision-makers.
Brian Galle, a Georgetown University law professor, provided external perspective on the ethical dimensions: "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's administration rejected such characterizations, stating through a spokeswoman 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."
The most prominent case involves Regent Andrea Fischer Newman and New York developer Stephen Ross. Ross contributed $2,000 to Newman's re-election campaign in June 2010. Sixteen months later, Newman seconded the motion that approved the university's $35-million investment in a real estate development fund controlled by Ross' firm. Newman subsequently committed to returning the contribution and donations from two other wealthy businessmen following the Free Press investigation.
The scope of the issue extends beyond Newman's situation. State records show two Board of Regents members combined accepted nearly $30,000 in campaign contributions from donors associated with funds receiving university investments. Additionally, a family actively involved in guiding the university's investment strategy contributed more than $29,000 to the board's longest-serving member, further illustrating the interconnection between donation sources and investment decision-makers.
Brian Galle, a Georgetown University law professor, provided external perspective on the ethical dimensions: "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's administration rejected such characterizations, stating through a spokeswoman 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."
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