By Peter Galuszka
Although momentum grows to reinstate Teresa Sullivan, the embattled president of the University of Virginia, there are still some strange threads left hanging. One of the most curious involves the role of two Wahoo grads that are big deal hedge fund managers and live in tony Greenwich, Ct., the Gatsby town for the incredibly rich.
The two hedge fund managers are graduates of U.Va.’s Darden School, a highly-ranked business school that some say served as the petri dish from which the surprise coup against Sullivan came.
One is Peter D. Kiernan, a former partner at Goldman Sachs and chair of the Darden School board who apparently sent covert emails to the schools Board of Visitors pushing the overthrow of Sullivan. Kiernan soon resigned from Darden in shame, apologizing for his role in “further complicating the already difficult situation after Teresa Sullivan’s resignation as president.”
The other money man is Paul Tudor Jones, a billionaire so clever with investing that he pocketed $100 million in short trades on the day the stock market tanked in 1987. The Memphis native and former cotton trader has twin degrees from U.Va. He funded the school’s John Paul Jones Arena that was named after U.Va. graduate father (not the admiral) and which serves as home of the Cavalier basketball team and setting for many rock concerts.
Jones leaped into the Sullivan controversy by writing a letter to the local Charlottesville newspaper on June 17 backing Sullivan’s ouster and bemoaning the school’s fall from grace by such august measurers of worthiness as U.S. News & World Report magazine. The struggling magazine’s questionable assessment said the school dropped to No. 25 from No. 15 since 1988. Wahoo professors need a 32 percent raise to place them among the truly elite 10 U.S. schools. Fewer bright kids actually chose to go to the school if they get accepted. And so on.
This all may be true, but it is a heavy load to place at the feet of Sullivan who hasn’t even been at U.Va. for two years. Such trends, if as truly awful as Jones would have you believe, have been coming down the line for decades and have accelerated as the General Assembly has cut funding for schools (which goes exactly opposite the concepts of the beloved Thomas Jefferson who truly believed in public education). Some of U.Va.’s smug and entitled grads envision “privatizing” the school, presumably to make it more like Harvard and to get rid of having to consider the rabble of less-than-affluent applicants.
My view is beware hedge fund traders. Sure they are bright people – in relatively narrow fields such as getting that extra “alpha” for their very rich investors. Some are cheating crooks such as Bernie Madoff. And they tend to be a truly arrogant lot. Before the Madoff scam was discovered, hedge fund traders lobbied for zero regulation claiming they if they hurt anybody, it would be folks who had $10 million to play with. Likewise, the U.S. Securities & Exchange Commission, their chief regulator, relied on kids right out of accounting or law schools who were not exactly rocket scientists and couldn’t understand what they did anyway, the traders claimed. Too bad for them that a few SEC kids did actually figure things out as the Madoff conviction shows.
Jones fits the bill of the self-absorbed, self-made billionaire and I am sure he is exactly the type of individual that some at the Darden School would like to mass produce. Forbes says he is worth $3.3 billion and his firm, Tudor Investment Corp., has about $11 billion in assets. Playing around with his disposable income, Jones is known, according to the Wall Street Journal, for “his crazy annual Christmas light display” at his Connecticut home, which is just one of his estates.
The Hook, the Charlottesville alternative news weekly, reported that Jones and his former fashion model wife Sonia, had recently announced a pledge for a $12 million “contemplative center” and the school had hoped the Jones might pony up another $100 million to plug their budget.
To be sure, there is nothing wrong with the very rich helping out with worthy causes. But hey, this is Virginia. Don’t forget that when Andrew Carnegie tried to help out war-ravaged Richmond with a new library, he was told that “gentlemen buy their own books.”
In the current crisis, The New Republic may have said it best:
But whatever good intentions that the University of Virginia Board of Visitors may have had were quickly overwhelmed by its parochial anxieties. Apparently, they were afraid that their beloved alma mater might not be able to compete with rich private universities in enrolling undergraduate classes comprised exclusively of rich legacies, ruling class trainees and students whose remarkable talents reflect well on the Board of Visitors. They were worried that revenues would be used to support money-losing subjects like classics instead of recruiting “star” professors who never teach undergraduates.
The key question is what the University of Virginia wants to produce. Well-educated women and men? Or rich hedge fund traders?