Senate Majority Leader Seeks Answers on Possible Rutgers Conflict of Interest

Tara Nurin | August 13, 2013 | Politics
Weinberg has specific questions about the extent of President Robert Barchi’s involvement with two companies doing business with the university

robert barchi rutgers
They say it’s legal and that it’s common practice. But does that make it right?

That may be the crux of questions raised by Senate Majority Leader Loretta Weinberg (D-Teaneck) about Rutgers University President Robert Barchi’s membership on the boards of two companies that do business with the school.

Weinberg is not happy with the lack of response she’s gotten from the university’s Board of Governors about Barchi’s work for the two companies, and she’s threatening to force the board to open up records from previously held private meetings.

Citing possible conflict of interests, Weinberg is calling on Barchi to step down from the two lucrative positions – severing professional and financial ties.

While at least one expert in the field of higher education says it’s common practice for university presidents to earn extra money by serving on outside boards, he says not everyone thinks it’s acceptable.

Barchi, who has been dogged by controversy throughout his one-year tenure at the Rutgers helm, did not hide his ties to the two companies.

But Weinberg has sent two unanswered letters to the board – the first on July 23 and the second on August 6 – requesting more information about Barchi’s paid seats on the advisory boards of the companies, which also did business with the University of Medicine and Dentistry of New Jersey (UMDNJ) before its recent merger with Rutgers.

Weinberg is not satisfied with the school’s public response that Barchi disclosed his positions to the board before he was hired last year. Based on previous encounters with Barchi over other issues, she says she’s not confident that he has supplied enough information about his off-campus ties.

She cited an Assembly budget committee hearing related to the recent athletic department scandal that led to the resignation of the former Rutgers athletic director: “I did say I did not think we were getting direct answers. There was a little attempted obfuscation.”

“I understand he divulged all of these things before his hiring but it’s not so much about building a firewall,” Weinberg said. “I’m asking, ‘What does he do for these companies? What are his responsibilities?’ I’m assuming these companies want something in return. How many hours is he required to give them?”

“Those are all questions that need to be answered before one can decide whether this is an appropriate activity,” Weinberg said by phone last week while on vacation.

According to Weinberg’s second letter to the Rutgers board, Barchi earned $300,000 last year from VWR International and Covance Inc. – two firms that trade in lab supplies and drug development services – and holds $2.5 million in Covance stock. She also noted that the companies’ contracts with both schools have been worth $22.5 million over the past five years.

In a statement, Rutgers spokesperson E.J. Miranda said Barchi has recused himself from matters that pertain to the companies. The school released a memo Barchi sent to senior staffers in early July instructing them not to involve him in any university business related to the two firms. The memo followed a similar verbal warning Miranda says Barchi gave his staff when he became president a year ago.

The school also released Barchi’s appointment letter, which read: “The University recognizes that it is both appropriate and beneficial for you, in your capacity as President of Rutgers, to serve on outside boards … so long as they do not detract from your duties as President of Rutgers and are consistent with applicable conflict of interest laws and policies.”

Governor Chris Christie has defended Barchi and the university, telling reporters recently that he trusts the Board of Governors to vet its candidates and establish appropriate guidelines for their activities.

“If they’re satisfied, which Chairman (of the Board of Governors Gerald) Harvey says he is satisfied, then I don’t see any reason for me to be involved unless someone can point out a specific instance of conflict where President Barchi has acted in the interest of a company rather than in the interest of Rutgers, and no one has raised that issue,” Christie said.

Scott Jaschik, editor of the Inside Higher Ed website, said it’s common for university presidents to accept paid board positions. He notes that the bigger and more complex the school’s network, the harder it is to avoid intersecting relationships.

Is it unethical? Jaschik said it depends on whom you ask.

“There’s not a consensus view,” he said. “Some would say you just don’t do it, some would say the president should recuse him or herself and some would say is it’s a (fair) way for a president to earn more money.”

Weinberg adopts the first view — just don’t do it.

Weinberg feels she’s giving the Board of Governors enough time to answer her questions, and even though there’s no board meeting scheduled until October, she thinks her questions are straightforward enough for a staffer to compile some answers.

“If they think I’m just going to forget about this, they’re wrong,” Weinberg said.

Weinberg says she’ll likely give the board up to three more weeks before she seeks to unseal the minutes of any closed meetings during which the governors discussed the board-membership issue.

Because of the fact that in some ways Rutgers operates as a public entity and in others acts like a private one, it’s not immediately clear whether Weinberg has legal standing to open the board’s closed-door minutes.

The dispute with Weinberg is just the latest in a series of conflicts between Rutgers officials and Trenton lawmakers during Barchi’s brief tenure.

  • During a protracted battle last spring, the boards of governors and trustees blocked a move by high-ranking Senate Democrats to sever the Rutgers-Camden campus and merge it with Rowan University in Glassboro.
  • Several months later, senators Ray Lesniak (D-Elizabeth) and Richard Codey (D-Livingston) called for the firing of Barchi and then newly-appointed athletic director Julie Hermann, who was brought in to replace director Tim Pernetti after he resigned over revelations of the head basketball coach’s mistreatment of players.
  • Before formally taking her place as head of the Rutgers athletic department, it was revealed, Hermann herself had verbally abused volleyball players when she was a coach at the University of Tennessee. Assembly Speaker Sheila Oliver (D-Essex) called for hearings on the matter but they were never held.

  • At the end of the most recent legislative session, Senate President Steve Sweeney (D- Gloucester), who’d helped lead the charge to separate Camden from the main campus, introduced legislation to dissolve the Rutgers Board of Trustees. Assemblyman John Wisniewski (D-Sayreville) subsequently introduced alternative legislation to explore restructuring of Rutgers’ governance structure. Neither bill was posted for a vote.
  • Finally, last month, Sweeney filed a lawsuit challenging the induction of Middlesex County Hispanic community leader Walter Perez to the Board of Governors.
  • Weinberg, who frequently co-sponsors legislation with Sweeney but who was not intimately involved in any of these other matters, said she’s spoken to him about her conflict-of-interest concerns “only in passing.”

    “They’re not tied together,” she said.