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Brian

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[Ray Brown]

A few corrections, clarifications, and additional items are warranted for yesterday's post. I got a few things wrong, and I missed a few other examples that help establish where Michigan finds itself in its efforts to not be at all like Michigan State.

Good news/bad news for FOIA. A couple of twitter folks pointed out that Michigan was successfully sued by the Mackinac Center over its worst-in-class FOIA department:

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So hooray that it can't be as bad, but again this is an FOIA department that had to be forced into even the vaguest approximation of compliance by a lawsuit. Michigan must have an FOIA department that wants to be open, not one that is occasionally forced to be.

The Iowa perspective. Patrick Vint performs an Iowa self-examination:

here's the biggest distinction between Iowa and Michigan State: While Iowa is certainly committed to secrecy, Gary Barta and his staff are equally terrible at secrecy.  Going all the way back to Barta's first scandal, the Everson/Satterfield matter (which will figure prominently here), Iowa has shown a total inability to keep a secret, no matter how hard it collectively tries.  Peter Gray got out eventually.  So did the Griesbaum firing and Meyer transfer, the rhabdo epidemic, the DRUGS? non-scandal in late 2010, and the McCaffery extension.  There are simply too many good reporters around the program with nothing better to do than FOIA the hell out of them a few times a year, and Iowa's FOIA office, to its undying credit, truly appears to adhere to the letter and spirit of the law in almost all circumstances (which is why Iowa stopped putting anything in writing, essentially).

There is the old adage that a government can never keep a secret for long because there are too many people who know how to talk.  That's Iowa; they might well want to keep secrets from everyone, but they're incapable of actually doing that.  That's a good thing.

Also, Kirk Ferentz swung hard towards law and order after some disturbing incidents about a decade ago—remember the point in time when Michigan had hired Rodriguez and it looked like Ferentz was running a cowboy program?—and the Iowa regents cover all three public Iowa universities (UNI and ISU are the other two), with representation about equally spread between the three schools.

On that local prosecutor's office. User Monocole Smile brought up Josh Furman's case, which was a kerfuffle in which two Michigan cheerleaders "restrained" Furman from going after a guy:

The trial began Monday when the two women who were involved in the incident testified they did not feel threatened by Furman during the incident. The women both testified were attempting to hold Furman back from potentially fighting another man who was in the apartment. Mason said that man had been sending Furman explicit text messages regarding his ex-girlfriend.

According to the ex-girlfriend’s testimony, she initiated the physical contact with Furman by grabbing his arm and hair. Mason said that it was clear that if Furman wanted to get past the women into the apartment, he could have.

“If this guy is strong enough to get past OSU’s (Ohio State University) line, he could’ve got past these two cheerleaders,” Mason said. “But, he didn’t do it.”

The prosecutor's reasoning for bringing potentially career-ending domestic violence, assault and battery, and illegal entry charges:

Reiser said regardless of the terms used by the women and their roommate, who also testified on Monday, to describe how Furman tried to enter the apartment — a 911 call played in court Thursday indicated he “forced” his way in, while one woman said Monday he “brushed” by her — he should have been guilty of illegal entry.

“The fact that he used forced at all shows the illegal nature of his entry,” she said. “He was not invited in.”

This is a football player brought up on charges for yelling at a guy and almost getting in a fight. That seems to be a fairly definitive "no" in the "subverted local prosecutor" category. Maybe "jerk-ish local prosecutor," though.

The exact Gibbons timeline. I was not entirely clear that Brendan Gibbons's incident happened under Rich Rodriguez's watch, as did the Lewan threat. It is Rodriguez who should have booted Gibbons. While I am a zealot about how "I didn't know" is not at all a defense for an authority figure, even I am willing to give a new coach a pass for incidents in the past when he takes a team over.

Brady Hoke was still a neanderthal in his reaction to Gibbons's upcoming expulsion. He lied for him, and when confronted about this by the media his attitude towards what had happened was either dismissive or uncomprehending. Take your pick.

Also: it was Hoke who immediately dismissed C'sonte York.

In "are you sure you want to run this NOW?" investigative reporting. Pity the poor Freep reporters who had to drop a long story about Michigan's endowment and how it's run during the midst of the MSU scandal, but they did. The crux opens the story:

Executives at some of the nation's top investment firms donated hundreds of millions of dollars to the University of Michigan while the university invested as much as $4 billion in those companies' funds, a Detroit Free Press investigation found.

More than $400 million of that amount was sent into funds managed by three alumni who advise the university on its investments. Critics worry Michigan’s approach of investing with some of its top donors, who also help guide the university's nearly $11-billion endowment, creates a conflict.

Robert Jones, an MBA graduate from Michigan who helped lead Goldman Sachs Group's quantitative equity fund management unit before helping to found his own firm, is a member of U-M's Investment Advisory Committee, which advises the university's investment staff.

Jones said in an interview last year his firm does not receive U-M investments. And he said he would worry about the appearance of a conflict of interest if his alma mater chose his firm.

"Maybe it would look like I'm only on the committee to further my company, which is not the case," he said, adding, "it just never occurred to me to ask them" for an investment in his firm because he holds a position of influence.

This is another attribute of the university's governance that should be questioned and perhaps changed. I'm sure the folks managing the university's endowment look at it as a favor; Jones points out the obvious downside. At least there is a high-placed person on the advisory firm who's willing to offer no-bullshit quotes to a paper about this practice.

On the other hand, Michigan's tendency towards un-public secrecy again crops up:

The public university lobbied to change the state's open records law to favor the private funds managing U-M's billions. That was to protect information about the performance of funds, including those controlled by top donors to the university. ...

Thanks to Michigan's lobbying effort to change state law, it is a closely guarded secret how well the investment funds run by donors have performed. The university also shields the fees it is charged to manage its money as well as details about profit-sharing. A nonpartisan state agency warned before the law passed that the change could mean "little public accountability for poor or questionable investment decisions."

And that's the way most universities prefer it.

"The reality is nobody gives away their secrets," Lundberg said in an interview. To reveal the performance of individual investments and the fees paid by universities, he said, would hinder the ability to enter high-yield investment funds and "would come at a tremendous cost."

I don't pretend I have enough domain knowledge to say who's correct here.

Also in mendacity. Michigan State has been pretending that a lawyer they essentially hired as defense counsel has been running an independent investigation.

As sexual abuse reports against Dr. Lawrence G. Nassar flooded in a year ago, besieged officials at Michigan State University announced they had ordered an internal review. Overseeing it would be Patrick J. Fitzgerald, a former federal prosecutor whose reputation for investigations into mobsters, terrorists and corrupt politicians led admirers to deem him a modern-day Eliot Ness. ...

And they accused the university of failing to conduct a top-to-bottom, truly independent investigation, settling instead for a review by a legal team that was also trying to protect the school from any damage in the courts. Michigan State portrayed Mr. Fitzgerald as reviewing the Nassar cases even as he was hired to defend the university from lawsuits.

“Michigan State led the public to believe that there had been an independent investigation,” Tom Leonard, the Republican speaker of the Michigan House of Representatives, said on Friday in an interview. “And then as we continued to dig into this, we found out it was not an independent investigation. It was an internal investigation to shield them from liability.”

Mr. Fitzgerald said on Friday that his team had never been “engaged to produce a public report” on the Nassar case. He suggested that his team’s role had been misinterpreted by some. In fact, the initial contract between Michigan State and Mr. Fitzgerald’s firm makes no mention of carrying out an independent investigation or producing any report.

Even now they are stacking the deck in their favor by hiring an alum, John Engler, despite his clear disqualifying traits, like 1) being an alum, and 2) belittling sexual assault claims in Michigan prisons, a move that later cost the state nine figures. Rachel Denhollander:

"Engler is a deep political insider at MSU," she said in her Facebook post. "At a time the university desperately needs, and survivors pleaded for, outside accountability and leadership, the board chooses one of the most entrenched insiders."

She said that "despite the board's words about accountability, it is business as usual," and "I sincerely hope the board reconsiders."

Meanwhile, the lead investigator into MSU's culture of sexual assault is this guy:

MSU booster Peter Secchia, who has been under fire for his controversial remarks about the Larry Nassar sex abuse scandal, has donated more than $200,000 to the Kent County Republican Party and helped pay for the retirement party of former Kent County Prosecutor William Forsyth, who was named by state Attorney General Bill Schuette over the weekend to lead an investigation into MSU’s handling of the Nassar scandal.

An invitation obtained by the Free Press shows the Peter Secchia family, along with grocer Meijer, were the two major sponsors of Forsyth’s retirement party and roast at a Grand Rapids restaurant in December 2016.

Secchia, a wealthy Grand Rapids-area businessman and former U.S. ambassador to Italy, is also a major donor to MSU and to Schuette.

All of these moves are obviously unacceptable and not really warning signs, but rather MSU retrenchment. The only question is whether MSU can definitively pass Baylor and PSU or whether there will be some question remaining when this is all over.

Where is Rick Snyder in all this? He's a lame duck with no political future. The one thing he could do to maybe rehab his image in the eyes of a state that sees only Flint water when they look at him is to go on the warpath. CMU, EMU, WMU, Tech, Ferris, Mercy, NMU, LSSU, and Michigan grads surely outnumber this cabal of Spartans seeking only to preserve their precious wins over Michigan no matter how many lives get wrecked in the process.

Snyder's "mulling action." Dude. Go down swinging. You may be the only adult-type substance in the room.

Comments

yossarians tree

February 1st, 2018 at 3:09 PM ^

The last sentence about Snyder being the only adult in the room is what makes this so goddamn frustrating. I'm pretty sure he will do nothing because he is a lame duck and more than likely can't wait to get the hell out of that job and back to his private life (his term will always be stained by the Flint crisis, but mostly he was a good governor and what he did for Detroit in navigating the city through bankruptcy was the single most courageous political act I've seen in my entire life living in this state).

Still, here he will do nothing. So the old boys club at MSU can just continue to stroke each other off in plain sight and nobody can or will do a thing about it. This is nothing new. All politicians basically enact rules and laws that exempt themselves from all the rules and laws they impose on everyone else.

ST3

February 1st, 2018 at 3:34 PM ^

Brian asked, "The only question is whether MSU can definitively pass Baylor and PSU..."

I take this to mean collectively, because MSU has already passed Baylor and MSU has already passed PSU.

 

Section 1.8

February 1st, 2018 at 4:00 PM ^

A sentence Brian ought to reconsider:

"Even now they are stacking the deck in their favor by hiring an alum, John Engler, despite his clear disqualifying traits, like 1) being an alum, and 2) belittling sexual assault claims in Michigan prisons, a move that later cost the state nine figures."

First, Brian's writing makes it sound as if the lawsuit settlement was due to an Engler policy, or Engler malfeasance, or -- worst of all-- a letter, that constituted a "move that later cost the state nine figures."  That's not even close to the truth.  Brian embededed a hyperlink, to the Bridge Magazine story where they unearthed a letter from then-Gov. Engler declining to help the United Nations High Commissioner on Human Rights.  It wasn't a letter in the pending litigation; it wasn't a pleading or an exhibit or anything else.  It wasn't a response to any litigant.  It was a political response to a political p.r. stunt.  Now because I have to be so careful about stuff I write here; I am not diminishing or judging the merits of the litigation or the alleged wrongdoing.  The litigation went on for more than 14 years.  Up and down on appeal, two trials, etc., etc.  Lengthy, and complicated.  But no "move by Engler" cost the state nine figures.  The letter that Brian hyperlinked from Bridge Magazine was fundamentally irrelevant to the litigation or the settlement.

Second, that prison litigation was so complex and so long-drawn, I want to remind everybody that it extended through Jennifer Granholm's term as attorney general, and through much of her time as governor.  The litigation was never, ever, any sort of peculiar product of John Engler.  He had almost nothing to do with any of it.  When it was settled in 2009, we were about seven years into Granholm's two terms as governor.  Granholm didn't rush to resolve the case as AG; and she didn't rush to resolve it as governor.  What do people expect that Engler should have done?

Third, MSU can't possibly "stack the deck in its favor" on anything now.  Engler won't sit in judgment.  There will be a state AG investigation, an NCAA investigation, a federal investigation, several hundred civil plaintiffs, etc.  There is no more "stacking any decks."  You don't stack the deck in a Circuit Court or a U.S. District Court.

 

 

Erik_in_Dayton

February 1st, 2018 at 5:42 PM ^

If my facts are wrong, please say so - seriously.  But here are some facts as I understand it:

*Engler becomes governor in 1993.

*Also in 1993, the Michigan Women's Commission expresses concern over sexual abuse in female prisons.

*In 1994, a DOJ investigation regarding the possible abuse of Michigan's female prisoners begins.  Engler bars - or tries to bar - investigators from visiting Michigan's female prisons that year (I'm not sure if these were DOJ investigators or others).

*In 1996, Human Rights Watch issues a report of a pattern of rape and sexual assault of female prisoners by male guards in Michigan's prisons.

*In 1999, Michigan's legislature (presumably with Engler's sign-on) takes away inmates' right to sue under the Michigan Civil Rights Act.

*In 2000, Michigan's legislature (presumably with Engler's sign-on) prevents prisoners who have been sexually assaulted from bringing suit re: the assault unless they have suffered a physical injury.

*Engler maintains until the end of his time as governor in 2003 that Michigan's female prisoners are not being subjected to violations of their civil and constitutional rights.

*In 2005, the Michigan Dept. of Corrections stops using male guards in female prisoner living areas.

*Michigan ends up paying (or at least owing) more than $100 million to more than 500 female prisoners as a result of a settlement^*1 and two jury verdicts.  The settlement/verdicts arose after Engler left office, but a significant part of the abuse took place when he was governor. 

The above all looks a lot like what being president of MSU while Nassar was abusing women and girls looked like.

^*1 I'm well aware that a settlement is not an admission of guilt.  But things look pretty bad if you think it's best to agree to pay $100 million. 

 

 

Section 1.8

February 1st, 2018 at 6:00 PM ^

You are relitigating the women’s prison case. All that I was doing, was downplaying the rather silly United Nations kerfuffle. Which is one of the very few documents that anyone could find with Engler’s signature on it, for the significant reason that there wouldn’t be any other litigation documents with his name on it insofar as Engler had so little to do with any of it. I stand by my concern and criticism; that there was no “move” by Engler that “cost” the state a nine-figure settlement.

Erik_in_Dayton

February 1st, 2018 at 6:22 PM ^

You say Engler had almost nothing to do with the situation.  But that's just not true at all, as my previous post shows.   

You ask what Engler could have done.  He could have replaced the male guards in female prisons with female guards (or at least urged doing this - I'm not sure of his exact powers as governor with respect to this).  And he could have refused to sign on to taking away the rights of prisoners to bring claims when they were abused, something he did after numerous reports of rampant abuse in the prisons. 

The link Brian used mentions more than just turning away the UN. That's only a small part of the matter, though admittedly not a small part of the linked-to article (but the latter point is unimportant).  You can make a pretty good case that Engler's downplaying of the reports of abuse in women's prisons cost the state a lot of money. He could have acted in the mid-'90s and saved women from abuse and the state from having to cough up a ton of money.  But he failed to do that.

It's true that turning away the UN was mostly inconsequential in and of itself. But that's beside the point.

Indy Pete - Go Blue

February 1st, 2018 at 4:05 PM ^

Good leadership means admitting mistakes and having accountability.  Secrecy and manipulation have very serious consequences.  Thanks Brian for being a leader and shining some light on the flaws of our beloved university.  We as individuals and institutions have an opportunity to learn and grow from these tragedies.

TrueBlue2003

February 1st, 2018 at 4:38 PM ^

and have worked with a few hedge funds. The explanation given by Lundberg is total BS. The public doesn't need the level of information that could be reverse engineered to try to figure out strategies.

The reason this isn't disclosed and the universities don't want it disclosed is simple: A $10B endowment requires paying hundreds of millions of dollars per year to money managers just in fees (standard 2% management fee on the principal, that's not even the 20% on gains!).  And that gets paid even in down times when billions are lost (as happened in 2008 and will happen again). 

The general public wouldn't take very kindly to those kinds of fees being paid to multi-millionaires at a time when tuition hikes reach record highs.  That's the reason for the secrecy.  And I can't say I would support the disclosure of performance by fund because investments are hard.  You win some you lose some.  You'd hate for the general public to get out the torches and pitchforks every time your fund lost some money especially if it still beat the market.

What I would strongly endorse is the disclosure of at least the names of the firms that manage the endowment or any public fund (along with the officers of those firms).  This does nothing to reveal those firms secrets but it does go a long way into preventing conflicts of interest or the impression that those funds are buying favor (since their donations should also be disclosed).

There's already a lot of data that is required of institutional money managers to report. Per Investopedia a 13F "is a filing with the Securities and Exchange Commission (SEC) also known as the Information Required of Institutional Investment Managers Form. It is a quarterly filing required of institutional investment managers with over $100 million in qualifying assets."

These filings are remarkably detailed snapshots of a hedge fund/money managers holdings (and you or anyone can look them up at any time!).   Granted, it's widely known that these filings aren't necessarily accurate and there's no oversight but assuming they are filed accurately, anyone can see what a fund owns. It is entirely reasonable to think that a fund would invest in a company run or owned by a regent or university linked person who had influence over picking that fund and that would be a pretty clear conflict of interest (and almost certainly happens frequently).  Disclosing the names of funds (and maybe even an independent audit of 13Fs as a requirement to manage a public fund) would go some way towards preventing these kinds of conflicts.

CTSgoblue

February 1st, 2018 at 4:50 PM ^

I don't disagree with most of what you said, but to add some important detail...

Back in the early 2000s (?), some guys in CA were starting to FOIA universities to obtain this information (that they'd otherwise have no right to), were building a database of it, and then attempting to sell off licenses to the data to people interested in comparing these funds.  The University was in some top-tier funds because they were early investors in PE & VC before all the other endowments woke up to it (many latecomers were never able to get in before these funds started closing off to new investors).  The best performing funds are also some of the most private about their data; so when universities started getting FOIA'd, they were told by these funds "if you can't keep our data private, you won't be invited into our next fund" (remember, these funds raise sequentially instead of having evergreen funds).  Essentially, (I presume) the University saw it as severely limiting their access to many of their best-performing investments, so (again, I presume) the state sided with them under the belief that protecting investment information was in the overall best interest of the public.

Lastly, each new investment partnership is approved by the regents and recorded in the minutes.

TrueBlue2003

February 1st, 2018 at 5:35 PM ^

which funds that we are invested in.  13F's are already available for anyone to look up what a firm is (supposedly) holding.  Again, I don't disagree that disclosure of performance on a fund-by-fund basis probably does more harm than good (which is probably what was being FOIA'd).

I don't know what the data was that these funds were trying to protect, but If there are funds that for whatever reason don't have to disclose certain investments in SEC filings and maintain steadfast secrecy, I don't think a University should even be allowed to invest public funds with that manager.

University endowments do not need to chase returns so aggressively that they expose themselves to potential conflicts of interest, undue investment risk (or worse, illegal or unethical investments which is a common cause of unreasonable secrecy).

If our demands for returns on endowment investments are so great that we're willing to give up any checks, then we're just as guilty of creating a ticking time bomb as MSU is. Any potential "cost" in lost returns is worth it, IMO.

OwenGoBlue

February 1st, 2018 at 5:25 PM ^

Michigan probably doesn't want to be held accountable for the behavior of a hedge fund given the likelihood a fund will act in a way counter to the University's stated mission and/or values.

Michigan might not be, say, supporting Puerto Rico debt profiteering like Harvard, Princeton and Yale, but the spectre of that headline deters transparency.

harmon98

February 1st, 2018 at 4:22 PM ^

I live about 1/2 mile from Peter Secchia and can corroborate his world-class douchiness. Pompous is an understatement.

I would imagine Michigan has some real douche donors/boosters but I'd hope they pale in comparison.

MSU continues to dig its heels in. They would be well served to listen to the faculty and students.

kevin holt

February 1st, 2018 at 4:34 PM ^

Usually FOIA is pronounced "foya"---as opposed to F-O-I-A---so it would be "a FOIA department..." instead of "an FOIA department..." (just FYI for any public statements you might make, Brian)

Glennsta

February 1st, 2018 at 4:34 PM ^

My first reaction was, "great, now that MSU is getting crucified, it's our turn, in the interest of 'balance'" As I read it, it becomes clear that this is an issue that should be fairly easy to resolve, provided there's openness. Alas. If these donors are steering endowment investments to their own firms and then collecting fees on those investments, those investments better be netting a return way in excess of the market.

MGoPDX88

February 1st, 2018 at 7:19 PM ^

At MSU embarrassed by this? This whole show they're putting on is a joke. They're no longer little brother, they've successfully shifted to creepy sex offender uncle, in the most disgusting way.

HermosaBlue

February 2nd, 2018 at 11:10 AM ^

Hedge funds typically tout returns of prior funds in marketing materials, but those materials are typically available only to qualified investors and not the general public, because the SEC's organizing focus is protecting the unsophisticated individual investor. A decade-plus ago, when private equity and hedge funds were proliferating and everyone wanted in, fund managers could get away with refusing to allow such disclosures for their public clients. If public institution endowments wanted in, they had to play by the funds' rules. It was a seller's market. Over the last 5+ years, the hedge fund industry in particular has seen contraction and capital has left the space (I haven't checked net flows recently, as I left banking a few years ago). As a result, it's been more of a buyer's market. While certain top-echelon funds can still dictate terms for prospective investors (think bouncer at the velvet rope-type discretion), other funds cannot be so aggressive and need to court 800 pound gorilla investors like University endowments. That means, to some extent, the power dynamic in the industry has changed. All of this is a very long way of saying that if public universities actually wanted to be transparent, they could collectively dictate terms to their prospective investment managers. They don't want that accountability, so they hide behind fund "requirements" that would disappear if they wanted them to. It's a nondisclosure requirement of convenience, not a real obligation.