N.J. Attorney General to sue Stevens Institute of Technology in Hoboken
A lawsuit to be filed today accuses the school of misappropriation of endowment funds and excessive compensation. If successful in its case, management of the university may be ceded from the university’s nonprofit Board of Trustees to the state.
At the center of the suit are the Board’s chairman, Lawrence Babbio, and university president Harold Raveche (whose salary – in excess of $1,000,000 – is offered as evidence of overcompensation).
According to the Star-Ledger, in 2004, after a decade of aggressive expansion and growth of the university which doubled the number of students, an internal review of the school’s finances called into question the school’s financial health — including a large debt, operating losses, and a deficit of $8.5 million in 2003.
Stevens isn’t sitting quietly. The university pre-empted the state’s lawsuit, filing its own against Attorney General Anne Milgram on Wednesday accusing her of overstepping her authority and making inaccurate allegations.
The state’s claims against Stevens’ budgeting and spending practices are, in a word, ironic. New Jersey’s fiscal and accounting practices are nothing to emulate. Debt has tripled to $45 billion since 1990. Budget shortfalls are a regular occurence (last year’s shortfall was an historic $7 billion), and recent reforms have tried to tackle the state’s long-running problem of state employees padding their salaries and pension benefits.
This doesn’t make the state a particularly convincing auditor.