A Classic Example of a Closed Fiefdom
<a href="http://www.scribd.com/doc/57039333/Hogan-Report-on-RF" target="”_blank”">A
report on the relationship between New York's state university system
(SUNY) and the SUNY Research Foundation (RF)</a> was published
yesterday. What makes it of interest to this blog is the way the report
emphasizes the personal nature of the management of the foundation,
which distributes nearly a billion dollars a year in research grants
almost exclusively to SUNY's many colleges and universities; the way it appears to have been turned into a fiefdom that turns its back on those it is responsible to; and how little was done to stop this from happening.<br>
<br>
The
report's executive summary states, "It is shocking that the governance
of the RF has been widely perceived to have become so personalized.
When people talk of the RF’s mission or goals, they never ask or say
what the Board believes — it is all 'John wants x,' or 'John believes
y.' It is as if the Board of a $1 billion nonprofit corporation does
not even exist. In 30 years of advising dozens and dozens of large
nonprofit organization boards, I have never seen such a phenomenon. ...
There is widespread acknowledgement that the CEO is able, but also
concern over his having 'his own agenda,' 'being dedicated primarily to
survival,' and being 'the guy who taught Machiavelli.'”<br>
<br>
This personal approach to managing a huge government
agency has many consequences. The report notes that compliance is very weak
in the foundation. It also notes that the foundation's legal staff acts
much like the CEO, "difficult," "combative," and "remarkably
disparaging toward SUNY — their only client." The report concludes that
"RF
appears to have tolerated for some time a culture in which the lead
counsel has been openly hostile
and provocative to its customers."
But "tolerated" is probably not the right word. This culture,
recognizable in many local governments, comes from above. It is accepted and it is justified.<br>
<br>
As the report notes, although the foundation's sole mission is to
support SUNY and its goals, the foundation's "leadership
does not even pay lip service to that concept."<br>
<br>
<b>The Justifications</b><br>
There are always justifications for this sort of attitude, whether it
is to one's client or, in the case of local governments, to the public.
In this instance, the foundation feels "besieged" by the outside, by
inquiries, investigations, and publicity. So it sees itself as
"hunkering down," resisting intrusions, and stressing its separation
from SUNY so that it can retain confidentiality. From SUNY's point of
view, the foundation is “secretive,” “uncommunicative,” a “black-hole,”
and “resistant even when it doesn’t need to be.”<br>
<br>
The report states that the
foundation uses all this "as an excuse." SUNY's
information requests are generally not intrusive in the ways the
foundation argues they are, and yet they deny them anyway. The report
notes that the foundation "cites legal criteria
that are not usually the
determinative ones. So
they have created a remedy — secretiveness — that
is far too broad for the supposed disease. The result is corrosive
distrust."<br>
<br>
This is a classic case of over-justification in order to create within the agency or government the emotional support for a
fiefdom that is not responsive to those the agency or government is
responsible to. Far more than what is necessary is done in secret,
often without even the governing body aware of what is happening. The
fewer "outsiders" who know, the better.<br>
<br>
<b>The Consequences</b><br>
So it comes as little surprise that "several
of the RF’s own board
members said flatly that the Board process is 'a joke,' that they
receive little information, are not asked for views, and that RF
management likes “keeping us in the dark.” They said, 'We don’t
function
as a real Board.'”<br>
<br>
It also comes as no surprise that there are things to hide. Not much is
known yet, because investigations by the state comptroller and
inspector general are just commencing. But according to <a href="http://www.timesunion.com/local/article/Top-SUNY-leader-out-after-scath…; target="”_blank”">an
article
in yesterday's Albany <i>Times-Union</i></a>, the state's public
integrity commission has charged the foundation CEO with hiring the
daughter of the state senate majority leader for a no-show job. This is
likely only the beginning.<br>
<br>
<b>Dealing with a Poor Ethics Environment</b><br>
People seem very unskilled in sniffing out a poor ethics environment
and doing something about it. People are too quick to take No for an
answer to their questions, especially when it is backed up by legal
opinions. Legal opinions are easily manipulated. A decent lawyer can
argue anything. That doesn't make it a good argument, and it certainly
doesn't make it an appropriate or an ethical argument.<br>
<br>
Board members are also too willing to accept secrecy and powerlessness.
If they are not asked to meet, they are happy. It's less of a bother.
If they are not given memos, or if they are not asked to discuss
arguments and conclusions in memos they are given, it means less work.
It's much easier to depend on one's staff.<br>
<br>
But staff is not always dependable, and you can often tell by their
attitudes. The more they say No, and the more they throw legal
arguments at issues that are raised, the more likely they are to be
pushing their own agendas, and acting for themselves.<br>
<br>
Although the legal responsibility lies with the board, the actual
responsiblity, I feel, lies with the lawyers who make or allow bogus arguments
to be made, who are aware that the secrecy is unnecessary, who join in or accept the combative, protective
attitude, and who either do nothing to stop the situation, or aid
and abet it.<br>
<br>
In local government situations, as here, one or two lawyers who know
what is going on can stop it. But they rarely do. They either let the
fiefdoms become more and more closed and corrupt, without saying a word, or they
actively help the officials close themselves off from and lose the trust of
those they are supposed to be working for.<br>
<br>
It appears that lawyers are the easiest people of all to manipulate, because they wrongly see themselves as representing individuals, rather than the public, and they also see themselves as more manipulator than manipulated.<br>
<br>
By the way, the SUNY board accepted the foundation CEO's "voluntary" resignation yesterday, the day the report was published.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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