facade of respectability that [NU trustee Lester Crown]
surrounded himself all
his life was shattered... Yes,
it would be nice if he were on trial." -- Assistant U.S.
Dan Webb to the jury in the 1976 corruption trial whose outcome was
disqualify Crown from contining as a NU trustee. And yet
shamelessly continues to dictate Brand NU (B-NU) policy in league with
arms merchants who work out of the B-NU Rebecca Crown Center bunker,
of the real ChiRaq.
Office of General Counsel (OGC), run by Philip Harris, reports to the
Halliburton, General Dynamics (GD), Boeing, and Caterpillar,
have been in hot water with the federal
government for fraud
These people, including trustees J.B.
(see this piece on the ill-gained family wealth/tax fraud in Counterpunch
) and Lester Crown, called out for his "disgusting lack of integrity" by
an Assistant U.S. Attorney,
made their fortunes from flouting
, especially tax and fraud law.
The watchdog Project on Government Oversight reports that since 1996,
General Dynamics has paid $279.2 million in penalties to
the federal government.
Boeing, headquartered in
Chicago, has paid
, and Halliburton, whose lead "independent"
is the currrent
Chair of B-NU's Board of Trustees
, paid $3.339
billion in federal government fines alone
, including a 2009
$559 million settlement after the Security and Exchange Commission and Department of Justice produced evidence of
bribery associated with landing a contract to build a natural
gas factory in Nigeria.
Caterpillar, based in Peoria, Illinois, had its offices
last spring by the feds
part of an investigation by several
agencies of tax
fraud and other possible crimes. These are not cases in which
underlings screw up, but rather B-NU trustees who, as CEOs, directors,
and officers, instigate bribery, cover-ups, and the punishment of whistle
blowers (at their other workplaces
, and not just folks at B-NU).
Retirement Fund Debacle
In light of what these folks are doing in their firms, even
with stockholders and the SEC looking over their shoulders, it
should come as no surprise that B-NU has attracted a class
action lawsuit for mismanaging our retirement funds
from their non-profit lair that allows little sunlight. The
news of the class action lawsuit on our behalf has been withheld since
August of 2016, and the details of the
underlying mismanagement for much longer.
Somehow, amid all the self-promotional blather
B-NU distributes via our Inboxes, no one bothered to report
news about the savings of 35,000 B-NU current and past employees.
I myself only learned about it last week. I was poking around
trying to figure out why the firm that had been suing Yale, MIT, and
NYU wasn't also suing B-NU, which had similar sorts of plans. Lo
and behold, they were!
Yet no one, including the President of the Faculty Senate, had
any inkling of this. I sent President Morton Schapiro an email
suggesting that he, not only as the President but also an economist,
must have known about this. Why hadn't he made sure the faculty and
staff knew of this important litigation? He replied only:
"Forwarding this to our general counsel."
There's been no report on the lawsuit in the Chicago
, either, at least none I could find when
I searched its website using the terms "Northwestern University" "class
action" and "retirement." The Daily Northwestern
posted a brief announcement
on August 22, 2016, shortly after the lawsuit was filed and when no one
was reading the newspaper. Other than statements from the
lawsuit, the article's only "reporting" is a quotation from B-NU
spokesman's prepared statement. No interviews with the lead
plaintiffs listed in the lawsuit, the attorneys, nor any reporting on
the response from the Faculty Senate leadership, which included
the current NU Faculty Senate President, Robert Hariman, who said he
had no idea about this. Also missing was any reference to the
enormous success of this law firm in previous litigation, to cast doubt
on B-NU's claim that the complaint was "baseless." And no follow
up. That's odd because the stakes are
huge, the financial
press covered the filing against
, and similar lawsuits by the same firm against
University, NYU, and MIT the same month attracted coverage by the New
, including reporting on the plaintiff attorney great sucesses, suggesting that
such litigation is indeed newsworthy.
Could the absence of local reporting be because the same
people who run B-NU also are on
the Board of Directors that runs the Tribune
? And alas, the Daily Northwestern
is run by students who are eager to do great reporting but are trained in a toothless, unaccredited journalism school that has
sold out to Qatar -- whose contracts are the real reason my research suggests B-NU backed out of
for Medill. What kind of message does it
send to our students when Medill faculty cheerfully accept "Al Thani" named professorships and hence give their
imprimatur to a dictatorship that imprisons critics and even
, and turns
eye to Qataris who enslave foreign women?
B-NU's self-serving posturing about helping to usher change is another nauseating lie. Qatar has gone down substantially in world rankings
of free press since B-NU arrived
in 2008 and brought a program that emphasizes corporate communications
and works hand in glove with not only the Qatari thugs but also the
U.S. embassy in Doha. B-NU-Q is a tool of dictators and U.S.
foreign and military policy, not an independent school. I'm not
financial rewards go along with a named chair (and, yes, am unlikely to
find out), but I would pay not
to associate the "Al Thani" name with my career. (And yes, I probably already have.)
event, the fact that no one at a university with a supposedly premiere
journalism school has been covering the retirement fund lawsuit
and that the person breaking the story's context is the professor B-NU banned and
tried to fire, is its own damning evidence of Medill's emphasis on
networking and branding, and not the stuff of real journalism, that
is, speaking truth to power.
By way of contrast, the journalists in Hyde Park have been covering
a similar complaint against the University of Chicago filed in May, 2017. Their article includes a link to a Bloormberg report
from September, 2017 noting that of the numerous universties sued, only
one, University of Pennsylvania, has succeeded in its motion to
dismiss. The lawsuits against Vanderbilt, NYU, Duke, Emory, MIT,
and Princeton all were going forward. (B-NU and other
universities have not yet had orders on cases.)
I imagine only a handful of colleagues
will recall the odd "Special Retirement Meeting" of
June 7, 2016, about which no advance information was provided other
than that we should show up to learn about "important changes to the
Retirement Plan at Northwestern..." No specifics were
and the "Agenda"
also was bereft of information.
The 120 faculty who stayed after the Faculty Assembly, a small
fraction of the 35,000 whose funds the
suit alleges lost money
, learned that
several large retirement funds were
being discontinued and our funds were being shifted. B-NU's
Resources director Pamela Beemer refused requests of my colleagues,
especially insistent from those in Kellogg, that
she share the PowerPoint slides she was presenting or provide in
writing a specific account of the changes.
raised my hand and asked why these funds were being discontinued now.
The answer was that Congress changed the laws regulating pensions.
I Googled the law I thought she referenced and then raised my
and pointed out that the Pension
Protection Act was passed in
. I don't know that this is indeed the law at stake in
this litigation, but Beemer never addressed the question about
the timing of the changes, nor did any of
B-NU's attorneys who were present, including Philip Harris and
Stephanie Graham. (My email last week to B-NU's spokeperson
Cubbage asking for comments on the retirement fund and the June, 2016
meeting went answered.)
None of it made any sense until I read a New York Times
article on the class
action lawsuits against other universities
that had been sponsoring what seemed to be the same
with the same unlawful management fees that we were paying through
also points out that the lawyer who brought these lawsuits filed
retirement fund complaints against Caterpillar, General
Dynamics, and Boeing, all of which have officers or directors on B-NU's
Board. All of the lawsuits were filed in 2006.
No. 1 message (from the suits) is it's probably a good time to take a
close look at your investment fee allocations. Do it before the
plaintiff attorneys make you do it,' said Michael S. Melbinger, partner
and chair of employee benefits and executive compensation, Winston
& Strawn LLP, Chicago.
also an observation from 2006.
What did the same B-NU trustees who were the officers and directors
of the firms sued in 2006 do to change the retirement funds at B-NU?
According to the
lawsuit filed against B-NU in 2016
, nothing at all.
its lawsuit in 2009 for $16.5 million
settled in 2010 for $15.5 million
Boeing held out until 2015, when it agreed to pay $57
million to its employees
, and was hit with $19 million in Plaintiff
in a March, 2016 order by federal judge Nancy Rosenstengel
, just a couple months before B-NU advised us of the "important changes" to our plans. See Gary
Spano et al. v. the Boeing Co. et al., case
If Chicago analyst Michael Melbinger quoted above knew in 2006 it was
employee-benefits managers to revisit their retirement plans, why did
the great titans of industry who run B-NU
and who ran the firms that were sued in 2006 fail to change our plans
until the spring of 2016? Even if no one discovers kickbacks
at B-NU, as has been charged
in similar cases
NU's trustees failed in their fiduciary obligation to protect
their employees (us!) against excessive fees.
So far, B-NU
employees haven't seen a penny of the funds we appear to be owed,
though guess who is on track to make millions from this? The
Chicago law firm Jenner and Block, the same one to which attorney
reported as a partner until he took over B-NU's Office
General Counsel on January 1, 2016, the same Jenner and Block that is
closely tied to General Dynamics and that represents the Crown family,
and the same Jenner and Block that B-NU tapped for representation in
litigation. (My estimate of "millions" is based on the judge's
narrative of attorney hours and fees in the Boeing case; that class was
much larger so I divided it proportionately.) In response to a
query asking if he disagreed with my calculation that Jenner and Block
could earn more than $4 million, Harris wrote: "That information is
privileged and confidential and is not the type of information that my
office would disclose."
March 20, 2018, former Jenner and Block partner and B-NU's chief ethics
officer Philip Harris further responded to my inquiry by calling the
lawsuit "baseless." 10 days later, a federal judge rulling on a
similar case brought by the same attorneys against Yale, greenlighted
most of the lawsuit. To connect that order to the facts alleged
at B-NU, on April 3, the' attorney suing B-NU filed the March 30 order in the Yale case
with the Illinois Northern District Court.
The Jenner and
Block/Crown Family/General Dynamics Connection and the Problem with
Philip Harris Running B-NU's OGC
There are lots of creeps who run B-NU but the oldest and creepiest
is Lester Crown, the son of Henry
a.k.a. "The Colonel" or, at birth, Henry Krinsky. (Henry
Crown was notorious for war profiteering during World War Two and later
investigation for being an early adopter of money laundering and tax
evasion through nonprofits.)
The Colonel's son Lester took over his father's Material
and as its CEO was a co-conspirator in a
1970s bribery scandal
that produced convictions of several Illinois state legislators.
Lester avoided indictment only because of a deal cut for him
by Albert Jenner, the same Bert Jenner of
the Chicago law firm Jenner and Block that oversees
billions of dollars of GD contracts, offerings, e.g., this one
for $1 billion
Lester Crown is a
nonagenarian who in photos favors dark suits, slicked-back
hair, white-linened tables and a ready smirk. Reports
in the financial press observe that he
collects the majority of his wealth from General Dynamics and hobnobs
with the sheikhs and strongmen who buy GD missiles and other weaponry throughout the Middle
East, especially in Israel, of which he and B-NU are big
supporters. (Crown also is said to have played a major role behind the scenes in the firing of University of Illinois Champaign-Urbana political scientist
Steven Salaita, whose career he helped derail
If Crown, name and all, sounds like a loathsome villain in a James
Bond film, the hard truth is no less
chilling. I can say this without any fear of libel charges because
himself admitted his venality on the witness stand in an eight-week
trial of Illinois state legislators and aides and a lobbyist
convicted in a bribery scandal Crown himself helped orchestrate:
"Crown at first denied knowing that money
from his firm, Material Service Corp., was being used to bribe
legislators," the Tribune
reported. But under questioning by a federal
prosecutor, Crown, "close to tears, admitted he assumed almost
from the beginning that the money was part of a bribe scheme. He
said he turned over $8,000 to executives of his firm to use in
influencing legislators to vote for the bill that would have increased
weight limitations for concrete ready-mix trucks on the highways."
also reported that
investigators discovered that "several executives of the firm
cheating on their expense accounts so the firm could repay Crown for
the $8,000 in cash he took from his office safe" for the
industry's $50,000 bribery slush fund.
Crown's star role in
this illicit scheme was so obvious that on the first day of the
trial, a juror sent a note to the judge asking if they would ever
learn why Crown himself was not indicted.
answer, it turns out, was that
Crown was represented by Albert "Bert" Jenner, Jr. -- the attorney for
mega-rich, their corporations, and their trust funds. Jenner was the
consummate power-broker and one of the most controversial
appointments for the House Committee's investigation of the Kennedy
assassination. When Jenner reached out to the U.S. Attorney's
office, the former was a big shot with political clout who recently was
special counsel for the House minority committee during the Nixon
impeachment hearings. His was not a request that could be easily
no time did I believe an officer of Material Service was involved in
the case...I thought it would be a department head who would be
trying to improve his performance with the company," said
Attorney who went along with Jenner's demand for immunity in exchange for testimony from
reported, "Defense attorneys stressed the government's grant of
immunity not only to Crown but to eight of his executives, the
corporation, and its parent company, General Dynamics. 'The evidence
will paint a panoramic picture of the power the unindicted
coconspirators wielded,' James L. Coghlan, one of the defense
attorneys, told the jury. 'They are cunning men indeed -- elitists
who share exclusive neighborhoods and board rooms of giant
corporations and banks, the terraces of exclusive country clubs.'"
In closing arguments Assistant
U.S. Attorney Dan Webb agreed, noting a "disgusting lack of
integrity in the business community" and pointing out that the
"facade of respectability that [Crown] surrounded himself all
his life was shattered." Webb asked, "Should he [Crown] be
on trial? Yes. It would be nice if he were on trial."
The jury convicted a total of ten
defendants who had been charged in the bribery scheme, including five
Illinois state legislators who received prison time and fines.
the aftermath, a columnist questioned the propriety of Crown's 1976
re-election to a fifth four-year term as a Northwestern University
is a situation that is painful to a number of NU alumni
and supporters, who think the reelection of Crown, given the
circumstances of his involvement in the scandal, constitutes approval
of his behavior." The next sentence, of a new paragraph, states
simply, "The Crowns have a lot of money to give to universities
and other institutions and projects," and then writer Neil
Mehler moves on to Jimmy Carter's candidacy.
Bob Tamarkin, a Chicago business
reporter, emphasized the importance of the Crown family friend Bert
Jenner: "Whenever the kids got into trouble,
they never bothered the old man. They talked to me and I got them
out of trouble," Jenner told Tamarkin. Jenner was appointed as
a director of General Dynamics, the country's largest military
contractor at the time, thus initiating the mutually beneficial
partnerships, directors, officers who continue together to run Jenner
and Block, General
Dynamics, and Northwestern University.
Through today, B-NU's Board includes the CEO of General Dynamics, ex-CIA official Phebe
(who is married to a Boeing lobbyist
), as well
as Nicholas Chabraja, a former partner at Jenner and Block who went on
to run the Office of General Counsel at General Dynamics and
then became its CEO for 13 years, until 2009.
Chabraja continues to serve as one
of GD's 10 directors, alongside Lester's son, James C. Crown, and his
brother, A. Steven Crown, who also is a Brand NU trustee. A third GD
director/NU trustee is William Osborn, who stepped down from serving
as the Chair of Brand NU's Board this fall, a move announced a few
months after the FBI
raided the Illinois Caterpillar offices
it of tax and accounting fraud.
A professor who authored a report
commissioned by the federal government wrote: "Caterpillar did
not comply with either U.S. tax law or U.S. financial reporting rules.
belive that the company's noncompliance with these rules was
deliberate and primarily with the intention of maintaining a higher
share price. These actions were fraudulent rather than negligent,"
to the report's author
, Leslie Robinson, a professor at the
Dartmouth College Tuck School of Business.
Did Caterpillar and GD director Willliam Osborn step down as Chair of Brand
NU's Trustees because his time was up? Or was his time up because the
national press might pick up on the fact that the individual at the
of Brand NU's organizational chart
was the Chair
of the Audit
Committee of the firm the federal government was investigating
for financial crimes
A Brief Aside Re: J.B.
Pritzker, Brand NU Trustee and Candidate for Governor of Illinois
And since it's election season, how about that J.B.
after failing to be elected to Congress in the 1990s and to be appointed
Treasurer in 2008 -- the topic of the Rod Blagojevich conversation the
recorded -- J.B.
in late 2015 realized that his run for governor in 2018 would not be
impeded if he spent $100 million of his unearned fortune (less whopping
tax deductions/thefts from
the citizens of Chicago, Illinois, and the United States) to put
his name in stone, say, on the Northwestern University Pritzker School
Considering how much of the family wealth accumulated in
offshore banks hiding money from the IRS
, and their use of LLCs to hide
control of their nonprofit and private corporations, the Pritzker
School of Law makes as much sense as the Chuck Norris School for
Creative Nonviolence, the Daryl Strawberry School of Accounting, or the
Benjamin Netanyahu School of Human Rights.
through Chicago leaves the impression of J.B. and his clan
streaming funds stolen from the
taxpayers and workers of Illinois to spray the "Pritzker" moniker on every
building, lobby, and park whose carekeepers will turn a blind eye to
obscene graffiti of that family's name.
Moreover, given how Pritzker is using his money and name recognition to
governorship of Illinois these tributes look more like branding
investments than bona fide charity. Before
attracting notoriety from body slamming a reporter, Montana Republican
Greg Gianforte's 2016 $8 million tax-deductible purchase of naming
rights for the University of Montana's computer center
over the "political exploitation" of the University to promote
bid for governor.
in Illinois, such a brazen scheme attracts as
much attention as snow in January. Perhaps that's because Gianforte
lacked the foresight to take over the newspapers that reported on his crass
efforts to buy a reputation, unlike J.B. Pritzker and his ilk.
There's a lot more that could be said about the people and agendas behind the Chicago
, the Sun-Times
and even WBEZ, where you can wait for your
interview in a room with a plaque indicating the station's control by
the "Pritzker Foundation"
adjacent the lobby with plaques boasting of the Pritzker (and Crown)
donations while listening to Pritzker Foundation announcements.
you won't hear? Any in-depth coverage of the race for
governor, much less hard-hitting pieces on Pritzker's involvement with a range of unscrupulous
if not fraudulent activities, including this one he helped start with B-NU students
. (Pritzker vouched for and funded the B-NU students
behind the start-up firm that wanted to put advertising in doctors'
offices, but then joined other funders in suing them for fraud that
Pritzker himself seems to have enabled.)
WBEZ's sitting out the race (not to mention its lack of investigative
Chicago's real violent criminals, who live in Evanston and other
Northside suburbs) hurts Pritzker's independent rivals, who lack his
pockets and could use the free air time from independent,
nonprofit media--if only Chicago had this. WBEZ
states on its website and in announcements that J.B. Pritzker is not
involved with the Pritzker
Foundation and does not fund it. But the station refuses to state who
among J.B.'s relatives has funded the Pritzker Foundation, in addition
to its named
officers. The Pritzker Foundation's public 990s list numerous
Pritzker LLCs and organizations registered in
Delaware to unlisted officers, though one elsewhere indicates Penny,
J.B.'s older sister
was an officer of an organization that gave millions to the Pritzker Foundation that then donated to WBEZ...
Nor will WBEZ provide records or sources for their
claims. And WBEZ refuses to release its contracts with the
Foundation, which gave at least $2 million to "update
," in exchange for self-promotional
announcements and office plaques -- otherwise known as advertising for
If that's the best Chicago's nonprofit radio can
do, it's no surprise PhDs in Evanston are clueless about most of the
The Good News?
There is some pretty terrific news. Just about two years ago,
the Buffett Institute for Global Studies was about to be taken over by
lieutenant general without a PhD
. The faculty
and Dan Linzer -- the Provost who threatened
students who opposed Eikenberry with defamation litigation -- resigned.
In January, 2018 the new Provost, Jonathan Holloway
announced a new search committee and new position. The search
is for someone who is tenurable in an academic department, which
Eikenberry would not have been. Also, the search committee,
which includes people who signed the public letter opposing the
Eikenberry appointment, is consulting broadly among the faculty and
students, again a huge difference from what happened in 2015.
Our success with the Buffett Institute shows faculty and students united can make a difference. Stay tuned for more!
Correction -- March 11, 2018: an earlier version stated that the Daily Northwestern appeared not to have published on this, "none I could find when I searched its website using the terms "Northwestern University" "class action" and "retirement."
This statement also was based on a statement from the current
Editor in Chief, Nora Shelly, who in an email wrote that she did not
believe the Daily had reported on this.
April 4, 2018 -- added statement from Harris in email sent March 20 and
April 4 Plaintiff filing in litigation against B-NU..