Guest Editorial:

Peter Snyder

Oscar C. Boldt has been the recipient of much well-deserved appreciation from Lawrence University over the last 10 years. From his donations to the college’s endowment, to The Boldt Group construction company work on campus, to the expertise he provides Lawrence as a member of the Board of Trustees, the Lawrence community has benefited greatly from its relationship with Boldt.
Recently, however, members of the Lawrence community have grown concerned that the Board of Trustees has insufficient rules to guard against conflicts of interest among its members. In the last 10 years, Lawrence University has invested roughly $88 million in capital projects, most of which has gone to construction projects. According to chairman of the Board of Trustees William O. Hochkammer, the Board of Trustees awarded all of those construction contracts to The Boldt Group, of which Oscar C. Boldt is chairman. Additionally, all of Lawrence’s contracts with the Boldt Group have been no-bid contracts, meaning that Lawrence has not solicited and compared offers from other, competing construction companies.
It is a common practice for organizations preparing to undertake major construction projects to solicit bids from competing construction companies to ensure that the organization is receiving the best, although not necessarily cheapest, deal possible.
Boldt is a member of the Executive Committee of the Board of Trustees, the Board’s steering committee. Oscar C. Boldt is also a member of the Finance Committee. Together, the Executive and Finance Committees are two of the principal committees responsible for recommending and overseeing new construction projects at Lawrence University.
This situation constitutes a serious conflict of interest. Having the same person sitting on the Executive and Finance Committees of the Board of Trustees, both of which play major roles in deciding how and when Lawrence undertakes new construction projects, also serving as chairman of the construction company receiving no-bid construction contracts from Lawrence creates a situation where the personal interests of one member of the Board of Trustees may conflict with the greater interests of the school.
The Board of Trustees currently deals with conflicts of interest through a three-pronged approach. First, trustees must disclose their financial interests to each other. Second, trustees do not vote on issues where they believe they face a conflict of interest. Third, the rest of the Board of Trustees considers if conflicts of interest exist, and can vote against any proposal they think is against the best interest of the school.
According to the Feb. 6, 2004 edition of the Chronicle of Higher Education though, simply requiring trustees to recuse themselves from votes where they face conflicts of interest is increasingly recognized to be insufficient. Not only can the trustee still play a major role in the decision-making process leading up to the vote, but relying on the trustees to police themselves is an inadequate guard against the appearance of impropriety, regardless of the Trustees’ actual activities. The appearance of impropriety can, for example, discourage potential donors from contributing to the school’s endowment.
Similar issues have caused problems for other colleges and universities. According to the previously cited issue of the Chronicle of Higher Education, Idaho’s attorney general is investigating the Board of Trustees at the University of Idaho partially because a trustee owned the law firm the Board paid for representation. Additionally, according to the Oct. 14, 2005 issue of the Chronicle of Higher Education, an Alabama college was “faulted” for not soliciting competitive bids for less than $200,000 in construction contracts.
The conflicts of interest in Lawrence University’s construction projects point to another, larger concern; the lack of transparency at the trustee level. Currently, the Board’s minutes, conflict-of-interest disclosures, bylaws, contracts, and voting records are not available either to members of the Lawrence community or the general public. The membership of the Board’s committees, and even what committees exist, are also not made available.
This lack of transparency prevents students, faculty, alumni and donors from being sure that Lawrence is receiving the best possible deal in its contracting practices and from differentiating between situations of actual and apparent conflicts of interest.
Members of the Board of Trustees are unaccountable to the Lawrence community. According to Chairman Hochkammer, The Board of Trustees is a self-perpetuating body, meaning that it chooses its own membership. Since faculty, students, staff, donors and alumni have no oversight capability, so even if the transparency of the Board was increased, the Lawrence community would have no formal way of acting on that information.
This is not the case at many other colleges and universities in the United States. Many schools have created positions on the Board of Trustees that are elected by the alumni, in part out of the belief that the self-interests of the alumni, as a group, most closely match those of the school in general. Wesleyan University, for example, has almost a third of its Board of Trustees face election by the alumni. Dartmouth College and Cornell, Princeton, and Yale Universities are other well-known institutions that have substantial portions of their Board of Trustees elected by the alumni.
It’s important to note that there is nothing suggesting that Oscar C. Boldt has in any way acted against the best interests of Lawrence University. However, having a person on one hand serving on the trustee committees that deal with how to spend the college’s endowment, and on the other hand serving as chairman for the company that receives large portions of the money that the Board of Trustees decides to spend, points to a failure of the Board to adequately guard against conflicts of interest, a problem that is compounded by a lack of accountability and transparency.
On Tuesday, Nov. 1, the Lawrence University Community Council passed a resolution addressing these issues and calling on the Board of Trustees to implement policies to increase transparency, institute alumni elections for some seats on the Board, and to prevent people who do substantial business with the Board of Trustees from also serving on the Board. Time will tell if the trustees respond to the resolution with substantive, necessary reforms.