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Is HSA Any Way to Run a Business?

By Samuel Z. Goldhaber

THE Commission of Inquiry released last week the report of its investigation of Harvard Student Agencies, an organization that is supposed to provide jobs for scholarship students.

The commission studied HSA's effect on the academic performance of participating students, its monopoly position, its annual University subsidy of $10,000, and the percentage of scholarship students who actually get HSA jobs.

Three of the Commission's nine recommendations are of major importance:

*Eliminating the office of HSA president, with the adult General Manager alone being responsible for day-to-day operations,

*Submitting a weekly list of all jobs awarded, with scholarship student workers indicated, to the Office of Student Employment and semi-annual list to the Dean of Harvard College,

*Requiring regular full disclosure of HSA's financial affairs, including its distribution of wages and profit shares to scholarship, loan and other students.

Until January of this year, HSA functioned as a secretive monopoly, confident of the University's protective cloak. As an indicator of HSA's lack of responsiveness to the community, no public report had been issued since 1967.

The spark that touched off this semester's controversy was the discovery in January that HSA would receive funds from a benefit showing of the movie Dealing. HSA agreed to participate despite its attorney's advice to the contrary, and despite the fact that Phillips Brooks House, the Crimson, and the Alumni Office had refused. The Sack Theatre promoters billed HSA as a group that would use the money for student financial aid. This claim, of course, called into question whether financial aid students were receiving the bulk of HSA jobs. And nobody, from administrators in Holyoke Center to the student president Michael L. Ryan '72-3 knew the answer. The data had not been compiled.

In early February, the Crimson launched an investigation of Ryan and of HSA's major divisions, which include charter flights, publishing and catering. Various insiders of these divisions willingly supplied the Crimson with financial information which the HSA management had seen fit to withhold, such as balance and schemes. They also provided valuable information about HSA personalities and politics.

At the beginning of this semester, Ryan quietly took a leave of absence and became HSA president on a full-time basis. His one-year term ended May 31. During the first semester, Ryan had put in very long hours, doing much of the job that belonged to Andrew W. Nelson, the full-time adult manager who had been seriously ill. Nelson returned to work full-time in February, but agreed to give Ryan one-quarter of his own salary from February through May. Nelson praised Ryan and said, "Michael has responded above and beyond the call of duty."

EVEN if Ryan had not been shouldering Nelson's work load the first semester, he would still have been busy beyond the call of duty. In addition to being president of HSA, Ryan was also president of the College Bartenders Service in his home town, Garden City, N.Y. The business folded after the Christmas season, and Ryan insists that he spent no more than 30 hours on the College Bartending Service since its inception. He refused to say when it began.

While the Crimson was investigating HSA, an outside travel agency, Uni-Travel, flew in the face of a University ruling that gave HSA virtually exclusive rights to set up charter and affinity group flights for the Harvard community. Uni-Travel in early February offered Harvard students, employees and families a round-trip affinity group flight to Acapulco over Spring vacation. Ryan had complained to Dean Epps about Uni-Travel in February 1971, when Uni-Travel organized a Europe flight with the help of a Law School student. Daniel Steiner '54, General Counsel to the University, began putting pressure on the law student and a few months later, the University protected HSA's monopoly by making it a violation of University regulations for a student to organize a non-HSA charter flight. Legally, HSA had no grounds to complain in a real world courtroom and that's why it had to rely so heavily on the University.

Steiner, in February 1972, pledged "We will try to stop them (Uni-Travel)." Unfortunately for HSA, Steiner soon became needed for more pressing matters--the issues of whether SDS could hold its national convention on the Harvard campus and then, in April, the Gulf Oil proxy vote and the ensuing takeover of Massachusetts Hall.

Even if Steiner had put all his power to the test, his backing of HSA would have been like the Marines backing a regular regiment of Thieu's Army. On May 5, 1972, HSA was forced to mail out cancellation notices to those who had subscribed to five of its seven charter flights to Europe. HSA, due to competition from lower-than-ever youth fare rates, could simply not corner the Harvard market as it had done in the past.

Although HSA bungled the transportation to Europe, for those who still get there, HSA published this year a very well-written guide Europe. Behind their high quality publication, bitter disagreements existed between Ryan and Donald C. Thomas III '72, the publishing division manager who resigned in September 1971. Ryan, Thomas and a third student had vied for the HSA presidency the previous Spring in a close contest.

Thomas accused Ryan of giving him a poor deal in the profit-sharing contract by charging the publishing division with too much overhead. Unfair overhead assessment is probably the most common complaint of division managers. To an extent, Thomas took matters and money into his own hands. Although he resigned in September, he drew $1800 in salary, which he had been budgeted through May 31, 1972. "If you look at it cut-and-dry, I made more than I was supposed to get," Thomas said. "But it wasn't intentional." Thomas said he is morally entitled to his salary for the eight months he is not working because he negotiated extraordinarily lucrative publishing contracts. This semester, the adult general manager Nelson has asked Thomas to return a large portion of the salary. Well-placed sources say that Thomas has not and will not comply.

THOMAS also charged Ryan with interfering too much in the day-to-day management of the publishing division. Ryan dismisses the accusations outright. His face turns red consistently when the subject of Thomas is broached.

In his resignation letter, Thomas said HSA interfered with his academic work. Thomas is from Kirkland House, and Arthur Smithies, Master of Kirkland House, is the member of the Commission of Inquiry who suggested the Commission's investigation of HSA this Spring.

It should be added that Thomas' reaction to Ryan is atypical. Most division managers respect Ryan's capabilities and some of them even honored his request to refrain from saying anything substantial to the Crimson. Ryan started as a bartender his freshman year, and worked his way up the HSA ladder. He became the manager of the catering division, one of the agency's most profitable enterprises.

The catering division charges customers $5 per hour with a four-hour minimum. Bartenders receive a base pay of $2.40 per hour for working in Cambridge, $2.60 per hour for working in Boston, and $2.80 per hour for working outside Route 128. They are reimbursed for subway fare or mileage. A group of last summer's employees asked in vain for $3 per hour as base pay. They also demanded to see precise financial data for the catering division, but this request was accommodated only in a very limited way.

In February, only about half the students working for HSA catering were on scholarship. During Christmas and last summer, HSA catering employed a few people who had absolutely no affiliation with the University. "During a very peak season, there may have been one or two employees who are not Harvard students. When I was made aware that that happened, those employees got no more jobs," Ryan said. "What we have to do is make better efforts earlier to recruit people to work over Christmas."

Ryan himself has called the catering division HSA's "biggest offender" for not hiring scholarship students. Since February HSA has steadily increased the percentage of scholarship students it employs in the catering division. Weekly reports of the number of jobs given to scholarship students are now sent to the Student Employment Office.

Like the charter flights division, the catering division is suddenly getting a taste of strong competition. A former secretary for the catering division has started Independent Student Associates, Inc. This new catering business pays bartenders $3.25 per hour and does away with the four-hour minimum. Those in the HSA catering division accused the secretary of taking unfair advantage of HSA files on bartenders and customers. Most of the employees of Independent Student Associates have worked for HSA.

EVEN the Freshman Council jumped on the bandwagon of those investigating HSA. A freshman poll taken in March revealed wide scale dissatisfaction with HSA linen and HSA refrigerators. Of 188 students subscribing to the linen service, 63 per cent said they were dissatisfied. They complained about inconvenient hours at the depots, the price of the linen, short sheets and dirty linen. Of 119 freshmen renting HSA refrigerators, 74 per cent said they were dissatisfied and cited the expense, the low quality and poor service as their main complaints.

In the midst of widespread discontent, HSA released on March 21, 1972, its first public report in five years. The report showed that in the calendar year 1971, HSA paid $125,173 in wages, of which only $76,017 went to scholarship students. The financial statement demonstrated a skewed distribution of wages. Of about 290 students earning $50 or more annually, 30 students earned more than $1000. Of these 30 students, 11 were not on scholarship. Of the 28 students earning between $500 and $1000, 14 were not on scholarship. Although some HSA divisions have been quite profitable, HSA suffered an overall net loss of $12,675 in the fiscal year ending May 31, 1971. Alumni have contributed about $50,000 over the past few years to help HSA pay its deficits. This year, at least, HSA's financial picture has improved and shows a slight net income.

Ryan's term ended May 31. During the last months of his presidency, he improved HSA by responding constructively to much of the criticism offered from different corners. Ryan agreed to write a report to the community this year and proposed to the Board of Directors that annual reports be issued. Ryan said he wants to write a thesis next Fall, for that reason he did not run for another term as president even though he was eligible.

It seems that HSA will follow two of the Commission of Inquiry's three major recommendations: submitting weekly lists to the Student Employment Office of the number of scholarship students hired and issuing substantive annual reports. But the leadership of HSA will probably remain a source of controversy. Abolishing the position of president and giving his authority to the general manager will not solve the problem. Some members of the HSA Board of Directors do not feel the present adult General Manager is capable of handling efficiently any additional responsibility. There has been talk all term about the possibility of not rehiring him.

If the present leadership structure remains, it will require a series of competent presidents willing to put in the requisite long hours. In the past, HSA has had a wide spectrum of presidents, from honest competent hard workers to dishonest operators taking a year-long free ride.

THE new president, Arthur I. Segel '73, said he is going to spend a lot of time next year improving HSA's image. Segel is no stranger to the office of president, which he held in his senior year of high school and in his elementary school. Whether Segel spends his year making real changes or devotes his time merely to cosmetic image building will depend in part on a vigilant community that insists on reform.

At the beginning of this semester, Ryan quietly took a leave of absence and became HSA president on a full-time basis. His one-year term ended May 31. During the first semester, Ryan had put in very long hours, doing much of the job that belonged to Andrew W. Nelson, the full-time adult manager who had been seriously ill. Nelson returned to work full-time in February, but agreed to give Ryan one-quarter of his own salary from February through May. Nelson praised Ryan and said, "Michael has responded above and beyond the call of duty."

EVEN if Ryan had not been shouldering Nelson's work load the first semester, he would still have been busy beyond the call of duty. In addition to being president of HSA, Ryan was also president of the College Bartenders Service in his home town, Garden City, N.Y. The business folded after the Christmas season, and Ryan insists that he spent no more than 30 hours on the College Bartending Service since its inception. He refused to say when it began.

While the Crimson was investigating HSA, an outside travel agency, Uni-Travel, flew in the face of a University ruling that gave HSA virtually exclusive rights to set up charter and affinity group flights for the Harvard community. Uni-Travel in early February offered Harvard students, employees and families a round-trip affinity group flight to Acapulco over Spring vacation. Ryan had complained to Dean Epps about Uni-Travel in February 1971, when Uni-Travel organized a Europe flight with the help of a Law School student. Daniel Steiner '54, General Counsel to the University, began putting pressure on the law student and a few months later, the University protected HSA's monopoly by making it a violation of University regulations for a student to organize a non-HSA charter flight. Legally, HSA had no grounds to complain in a real world courtroom and that's why it had to rely so heavily on the University.

Steiner, in February 1972, pledged "We will try to stop them (Uni-Travel)." Unfortunately for HSA, Steiner soon became needed for more pressing matters--the issues of whether SDS could hold its national convention on the Harvard campus and then, in April, the Gulf Oil proxy vote and the ensuing takeover of Massachusetts Hall.

Even if Steiner had put all his power to the test, his backing of HSA would have been like the Marines backing a regular regiment of Thieu's Army. On May 5, 1972, HSA was forced to mail out cancellation notices to those who had subscribed to five of its seven charter flights to Europe. HSA, due to competition from lower-than-ever youth fare rates, could simply not corner the Harvard market as it had done in the past.

Although HSA bungled the transportation to Europe, for those who still get there, HSA published this year a very well-written guide Europe. Behind their high quality publication, bitter disagreements existed between Ryan and Donald C. Thomas III '72, the publishing division manager who resigned in September 1971. Ryan, Thomas and a third student had vied for the HSA presidency the previous Spring in a close contest.

Thomas accused Ryan of giving him a poor deal in the profit-sharing contract by charging the publishing division with too much overhead. Unfair overhead assessment is probably the most common complaint of division managers. To an extent, Thomas took matters and money into his own hands. Although he resigned in September, he drew $1800 in salary, which he had been budgeted through May 31, 1972. "If you look at it cut-and-dry, I made more than I was supposed to get," Thomas said. "But it wasn't intentional." Thomas said he is morally entitled to his salary for the eight months he is not working because he negotiated extraordinarily lucrative publishing contracts. This semester, the adult general manager Nelson has asked Thomas to return a large portion of the salary. Well-placed sources say that Thomas has not and will not comply.

THOMAS also charged Ryan with interfering too much in the day-to-day management of the publishing division. Ryan dismisses the accusations outright. His face turns red consistently when the subject of Thomas is broached.

In his resignation letter, Thomas said HSA interfered with his academic work. Thomas is from Kirkland House, and Arthur Smithies, Master of Kirkland House, is the member of the Commission of Inquiry who suggested the Commission's investigation of HSA this Spring.

It should be added that Thomas' reaction to Ryan is atypical. Most division managers respect Ryan's capabilities and some of them even honored his request to refrain from saying anything substantial to the Crimson. Ryan started as a bartender his freshman year, and worked his way up the HSA ladder. He became the manager of the catering division, one of the agency's most profitable enterprises.

The catering division charges customers $5 per hour with a four-hour minimum. Bartenders receive a base pay of $2.40 per hour for working in Cambridge, $2.60 per hour for working in Boston, and $2.80 per hour for working outside Route 128. They are reimbursed for subway fare or mileage. A group of last summer's employees asked in vain for $3 per hour as base pay. They also demanded to see precise financial data for the catering division, but this request was accommodated only in a very limited way.

In February, only about half the students working for HSA catering were on scholarship. During Christmas and last summer, HSA catering employed a few people who had absolutely no affiliation with the University. "During a very peak season, there may have been one or two employees who are not Harvard students. When I was made aware that that happened, those employees got no more jobs," Ryan said. "What we have to do is make better efforts earlier to recruit people to work over Christmas."

Ryan himself has called the catering division HSA's "biggest offender" for not hiring scholarship students. Since February HSA has steadily increased the percentage of scholarship students it employs in the catering division. Weekly reports of the number of jobs given to scholarship students are now sent to the Student Employment Office.

Like the charter flights division, the catering division is suddenly getting a taste of strong competition. A former secretary for the catering division has started Independent Student Associates, Inc. This new catering business pays bartenders $3.25 per hour and does away with the four-hour minimum. Those in the HSA catering division accused the secretary of taking unfair advantage of HSA files on bartenders and customers. Most of the employees of Independent Student Associates have worked for HSA.

EVEN the Freshman Council jumped on the bandwagon of those investigating HSA. A freshman poll taken in March revealed wide scale dissatisfaction with HSA linen and HSA refrigerators. Of 188 students subscribing to the linen service, 63 per cent said they were dissatisfied. They complained about inconvenient hours at the depots, the price of the linen, short sheets and dirty linen. Of 119 freshmen renting HSA refrigerators, 74 per cent said they were dissatisfied and cited the expense, the low quality and poor service as their main complaints.

In the midst of widespread discontent, HSA released on March 21, 1972, its first public report in five years. The report showed that in the calendar year 1971, HSA paid $125,173 in wages, of which only $76,017 went to scholarship students. The financial statement demonstrated a skewed distribution of wages. Of about 290 students earning $50 or more annually, 30 students earned more than $1000. Of these 30 students, 11 were not on scholarship. Of the 28 students earning between $500 and $1000, 14 were not on scholarship. Although some HSA divisions have been quite profitable, HSA suffered an overall net loss of $12,675 in the fiscal year ending May 31, 1971. Alumni have contributed about $50,000 over the past few years to help HSA pay its deficits. This year, at least, HSA's financial picture has improved and shows a slight net income.

Ryan's term ended May 31. During the last months of his presidency, he improved HSA by responding constructively to much of the criticism offered from different corners. Ryan agreed to write a report to the community this year and proposed to the Board of Directors that annual reports be issued. Ryan said he wants to write a thesis next Fall, for that reason he did not run for another term as president even though he was eligible.

It seems that HSA will follow two of the Commission of Inquiry's three major recommendations: submitting weekly lists to the Student Employment Office of the number of scholarship students hired and issuing substantive annual reports. But the leadership of HSA will probably remain a source of controversy. Abolishing the position of president and giving his authority to the general manager will not solve the problem. Some members of the HSA Board of Directors do not feel the present adult General Manager is capable of handling efficiently any additional responsibility. There has been talk all term about the possibility of not rehiring him.

If the present leadership structure remains, it will require a series of competent presidents willing to put in the requisite long hours. In the past, HSA has had a wide spectrum of presidents, from honest competent hard workers to dishonest operators taking a year-long free ride.

THE new president, Arthur I. Segel '73, said he is going to spend a lot of time next year improving HSA's image. Segel is no stranger to the office of president, which he held in his senior year of high school and in his elementary school. Whether Segel spends his year making real changes or devotes his time merely to cosmetic image building will depend in part on a vigilant community that insists on reform.

Thomas accused Ryan of giving him a poor deal in the profit-sharing contract by charging the publishing division with too much overhead. Unfair overhead assessment is probably the most common complaint of division managers. To an extent, Thomas took matters and money into his own hands. Although he resigned in September, he drew $1800 in salary, which he had been budgeted through May 31, 1972. "If you look at it cut-and-dry, I made more than I was supposed to get," Thomas said. "But it wasn't intentional." Thomas said he is morally entitled to his salary for the eight months he is not working because he negotiated extraordinarily lucrative publishing contracts. This semester, the adult general manager Nelson has asked Thomas to return a large portion of the salary. Well-placed sources say that Thomas has not and will not comply.

THOMAS also charged Ryan with interfering too much in the day-to-day management of the publishing division. Ryan dismisses the accusations outright. His face turns red consistently when the subject of Thomas is broached.

In his resignation letter, Thomas said HSA interfered with his academic work. Thomas is from Kirkland House, and Arthur Smithies, Master of Kirkland House, is the member of the Commission of Inquiry who suggested the Commission's investigation of HSA this Spring.

It should be added that Thomas' reaction to Ryan is atypical. Most division managers respect Ryan's capabilities and some of them even honored his request to refrain from saying anything substantial to the Crimson. Ryan started as a bartender his freshman year, and worked his way up the HSA ladder. He became the manager of the catering division, one of the agency's most profitable enterprises.

The catering division charges customers $5 per hour with a four-hour minimum. Bartenders receive a base pay of $2.40 per hour for working in Cambridge, $2.60 per hour for working in Boston, and $2.80 per hour for working outside Route 128. They are reimbursed for subway fare or mileage. A group of last summer's employees asked in vain for $3 per hour as base pay. They also demanded to see precise financial data for the catering division, but this request was accommodated only in a very limited way.

In February, only about half the students working for HSA catering were on scholarship. During Christmas and last summer, HSA catering employed a few people who had absolutely no affiliation with the University. "During a very peak season, there may have been one or two employees who are not Harvard students. When I was made aware that that happened, those employees got no more jobs," Ryan said. "What we have to do is make better efforts earlier to recruit people to work over Christmas."

Ryan himself has called the catering division HSA's "biggest offender" for not hiring scholarship students. Since February HSA has steadily increased the percentage of scholarship students it employs in the catering division. Weekly reports of the number of jobs given to scholarship students are now sent to the Student Employment Office.

Like the charter flights division, the catering division is suddenly getting a taste of strong competition. A former secretary for the catering division has started Independent Student Associates, Inc. This new catering business pays bartenders $3.25 per hour and does away with the four-hour minimum. Those in the HSA catering division accused the secretary of taking unfair advantage of HSA files on bartenders and customers. Most of the employees of Independent Student Associates have worked for HSA.

EVEN the Freshman Council jumped on the bandwagon of those investigating HSA. A freshman poll taken in March revealed wide scale dissatisfaction with HSA linen and HSA refrigerators. Of 188 students subscribing to the linen service, 63 per cent said they were dissatisfied. They complained about inconvenient hours at the depots, the price of the linen, short sheets and dirty linen. Of 119 freshmen renting HSA refrigerators, 74 per cent said they were dissatisfied and cited the expense, the low quality and poor service as their main complaints.

In the midst of widespread discontent, HSA released on March 21, 1972, its first public report in five years. The report showed that in the calendar year 1971, HSA paid $125,173 in wages, of which only $76,017 went to scholarship students. The financial statement demonstrated a skewed distribution of wages. Of about 290 students earning $50 or more annually, 30 students earned more than $1000. Of these 30 students, 11 were not on scholarship. Of the 28 students earning between $500 and $1000, 14 were not on scholarship. Although some HSA divisions have been quite profitable, HSA suffered an overall net loss of $12,675 in the fiscal year ending May 31, 1971. Alumni have contributed about $50,000 over the past few years to help HSA pay its deficits. This year, at least, HSA's financial picture has improved and shows a slight net income.

Ryan's term ended May 31. During the last months of his presidency, he improved HSA by responding constructively to much of the criticism offered from different corners. Ryan agreed to write a report to the community this year and proposed to the Board of Directors that annual reports be issued. Ryan said he wants to write a thesis next Fall, for that reason he did not run for another term as president even though he was eligible.

It seems that HSA will follow two of the Commission of Inquiry's three major recommendations: submitting weekly lists to the Student Employment Office of the number of scholarship students hired and issuing substantive annual reports. But the leadership of HSA will probably remain a source of controversy. Abolishing the position of president and giving his authority to the general manager will not solve the problem. Some members of the HSA Board of Directors do not feel the present adult General Manager is capable of handling efficiently any additional responsibility. There has been talk all term about the possibility of not rehiring him.

If the present leadership structure remains, it will require a series of competent presidents willing to put in the requisite long hours. In the past, HSA has had a wide spectrum of presidents, from honest competent hard workers to dishonest operators taking a year-long free ride.

THE new president, Arthur I. Segel '73, said he is going to spend a lot of time next year improving HSA's image. Segel is no stranger to the office of president, which he held in his senior year of high school and in his elementary school. Whether Segel spends his year making real changes or devotes his time merely to cosmetic image building will depend in part on a vigilant community that insists on reform.

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