Harvard Evades Tax Disclosure

State Creates New Forms With Help of University Officials

When an individual doesn't fill out a portion of an income tax form, the IRS is likely to come calling--with audits, fines, and sometimes even jail time.

But when Harvard University failed to fully answer its 1989 state tax forms, officials with the state Attorney General's office did no such thing. Instead, according to state records obtained by The Crimson, the officials speeded up plans to revise the form--and they asked Harvard to help out.

What's more, the state never insisted that Harvard correct its failure to fill out the forms completely, even after a complaint was filed with the director of the Attorney General's office division of public charities.

The state also allowed Harvard to file an incomplete form for a second year.

The information which was not reported--and which is not required on the new, less rigorous state tax forms--concerns specific details of the high risk investments that are part of the University's more than $5 billion endowment.

In interviews with The Crimson yesterday, Harvard and state officials sought to downplay any impact the University might have had on the design of the new form. Assistant Attorney General Diane Lund said Harvard's influence was minimal.

"I wouldn't say [Harvard had] any influence with respect to the details," Lund said. "They were certainly cooperative in indicating to us ways in which the form did not elicit information in the way that most institutions now collect it."

In addition, University Attorney Marianna C. Pierce denied that she ever discussed with Lund possible state enforcement of Harvard's compliance with the Massachusetts tax form for public charities, known as Form PC.

"The whole conversation was really talking about how to report financial information," Pierce said. "They certainly didn't talk about taking any enforcement action against Harvard."

But internal memorandums from the Attorney General's office, obtained under the Massachusetts Public Records Law, suggest otherwise.

The documents indicate that Lund consulted for more than a year with Richard C. Allen, director of the office of public charities, about a 1990 complaint filed with the office by former Crimson editor Joshua A. Gerstein '91.

Furthermore, they indicate that Lund informed Pierce and other Harvard officials of the complaint--which alleged that Harvard was not in compliance with state law. The University's response prompted the state to expedite its revisions of the form, the documents say.

In a July, 1990 letter to Allen, Gerstein requested that the state enforce the rules and compel Harvard to submit the data missing from the University's Form PC for fiscal 1989.

"I am writing to express my concern about the absence of certain information from Forms PC filed with your division by Harvard University and its affiliates," Gerstein wrote. "In general, Harvard does not disclose the detailed information requested."

In a handwritten internal memorandum, Allen indicated plans to "look the files over and see if we should request the information from Harvard."