A Transparent Need

Former Whipple V.N. Jones Professor of Economics Andrei Shleifer ’82 is one of the most prominent economists in the world, with the most citations of any economist, according to one measure. But his career was tainted when he and various acquaintances, as well as Harvard, were sued under the False Claims Act for buying Russian stocks and short-term state bonds in violation of Harvard’s contract with the United States Agency for International Development. In 2005, a settlement was reached between the government and the defendant parties, with Harvard and Shleifer paying millions of dollars in damages. And up until last week, Harvard had allowed Shleifer to maintain his endowed title with the Faculty of Arts and Sciences (FAS).

Last Wednesday, FAS said it had concluded its ethics inquiry of Shleifer’s defrauding of the U.S. government, but it was not revealed whether FAS had taken disciplinary action on the economist until last Friday, when he appeared to have been stripped of his endowed title as Jones Professor of Economics and demoted to the less prestigious title of “Professor of Economics.” To this day, the only comment the public has heard from Interim Dean of the Faculty Jeremy R. Knowles on the case is that he has taken “appropriate action.” Many have taken Knowles to task for the lack of transparency in handling this case. While we do not share the view that Knowles has an obligation to air the Shleifer affair publicly, we are concerned that Knowles did not adequately consult the Committee on Professional Conduct (CPC), which traditionally oversees matters such as these.

We do not find transparency to be an end in and of itself. When transparent measures work in the service of making a fair decision, they are justified. In this particular case, it is not clear what would be gained by having the details of Schleifer’s misconduct broadcast openly other than satisfying curious spectators. Harvard, however, has much to lose by establishing a precedent of leaving its procedures dealing with professional misdeeds open to public scrutiny.

Nevertheless, the consolidation of decision-making powers by Knowles represents a process which lacks any serious checks on the discretion of a single individual. To that end, the CPC was not adequately consulted in this process, and its members are justified in expressing their frustrations in this regard. Both the seven-member CPC and the three-member subcommittee charged with investigating Shleifer deserved some level of oversight powers in this highly sensitive, and highly publicized, case. The nature of the report submitted to Knowles by the subcommittee should also have been available for review by the CPC.

Having some level of transparency in the FAS disciplinary process to accommodate the small, specialized group equipped to handle matters of this nature would be a confidence building measure and would help ensure fairness across disciplinary cases. When an individual, whoever he may be, has the authority to single-handedly levy judgments without conference or counsel, our systems are left open to abuse and erosion of morale.