"The 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. Attorney Dan Webb to the jury in the 1976 corruption trial whose outcome was predicted to disqualify Crown from contining as a NU trustee.  And yet Crown shamelessly continues to dictate Brand NU (B-NU) policy in league with the other arms merchants who work out of the B-NU Rebecca Crown Center bunker, ground zero of the real ChiRaq.

B-NU's Office of General Counsel (OGC), run by Philip Harris, reports to the folks running Halliburton, General Dynamics (GD), Boeing, and Caterpillar, corporations that have been in hot water with the federal government for fraud and tax evasion for decades.  These people, including trustees J.B. Totally-Offensive-White-Guy Pritzker (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 the law, 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 $1.456 billion, and Halliburton, whose lead "independent" director 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 raided 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 actual 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 Tribune, 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 B-NU, and similar lawsuits by the same firm against Columbia University, NYU, and MIT the same month attracted coverage by the New York Times, 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 accreditation 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 journalists, and turns a blind 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 sure what 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.)

In the 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.)

Behind the Retirement Fund Lawsuit
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 provided 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 Human 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.  

I 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 hand again and pointed out that the Pension Protection Act was passed in 2006. 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 Alan 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 funds with the same unlawful management fees that we were paying through B-NU.  

The article also points out that the lawyer who brought these lawsuits filed similar 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.

"'The 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."  That's 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.
 
Caterpillar settled its lawsuit in 2009 for $16.5 million.  

General Dynamics 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 attorney fees 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 number 3:06-cv-00743.

If Chicago analyst Michael Melbinger quoted above knew in 2006 it was time for 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 Philip Harris reported as a partner until he took over B-NU's Office of 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 this 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."

On 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 Crown, a.k.a. "The Colonel" or, at birth, Henry Krinsky. (Henry Crown was notorious for war profiteering during World War Two and later was under 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 Service Corporation 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, and litigation.  

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 still 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 Crown himself admitted his venality on the witness stand in an eight-week 1976 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."

The Tribune also reported that investigators discovered that "several executives of the firm were 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.

The answer, it turns out, was that Crown was represented by Albert "Bert" Jenner, Jr. -- the attorney for Chicago's 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 rebuffed.

"At 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 the U.S. Attorney who went along with Jenner's demand for immunity in exchange for testimony from unnamed witnesses.

The Tribune 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.

In the aftermath, a columnist questioned the propriety of Crown's 1976 re-election to a fifth four-year term as a Northwestern University Trustee. "That 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 Novakovic (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, accusing 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. I 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," according 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 top 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. Totally-Offensive-White-Man Pritzker? Perhaps, after failing to be elected to Congress in the 1990s and to be appointed Illinois State Treasurer in 2008 -- the topic of the Rod Blagojevich conversation the feds 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 of... Law?!  

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.  

A stroll 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 the obscene graffiti of that family's name.  

Moreover, given how Pritzker is using his money and name recognition to buy the 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 attracted outrage over the "political exploitation" of the University to promote his bid for governor.  

Alas, 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 Tribune, 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.  What 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 reporting on Chicago's real violent criminals, who live in Evanston and other Northside suburbs) hurts Pritzker's independent rivals, who lack his deep 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 Pritzker Foundation, which gave at least $2 million to "update digital operations," in exchange for self-promotional announcements and office plaques -- otherwise known as advertising for narcissists.  

If that's the best Chicago's nonprofit radio can do, it's no surprise PhDs in Evanston are clueless about most of the above.

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 a retired lieutenant general without a PhD.  The faculty and students stood up and Karl Eikenberry surrendered, 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.  
UPDATE: April 4, 2018 -- added statement from Harris in email sent March 20 and April 4 Plaintiff filing in litigation against B-NU..