Gordon Gee gets WSJed!

Gordon Gee in the WSJVandy people, what did you think of the Wall Street Journal story yesterday on our bow tie sporting chancellor? Excerpts are below the break.

Though the article was primarily about a perceived lack of oversight regarding Gee’s spending and compensation by the Board of Trustees, perhaps the most interesting fact to be revealed is that his wife, Professor Constance Gee, received a formal reprimand for smoking marijuana in the university-owned chancellor’s mansion. The couple claimed at the time that it was to treat an inner ear ailment but are not commenting now.

I’m all for Professor Gee’s right to smoke at home, medicinally or not, and I can also understand not wanting to comment directly on the matter. I think it would be very neat, however, if she used this opportunity to come forward in support of liberalizing drug laws, as she has not been shy about promoting left-leaning policies in the past. And who better to do that than the wife of a teetotaling, LDS chancellor of a top 20 university?

For the record, there were 15 arrests and 25 disciplinary referrals for drug violations on campus in 2004.

The second most controversial part of the article is the university’s cozy parking contract awarded to Central Parking Corp., a company whose executive chair Monroe Carell sits on the Board. I remember a friend from The Torch wanting to investigate this years ago and am glad to see the story in print. The contract was never put to competitive bid, as I believe it should have been, and there may have been some undue pressure on the athletic department to continue hiring the corporation even after it wanted to switch to a new provider. (The next contract has been put up for bidding.) That said, blogger Donald Luskin provides a good perspective on just how paltry the amount in question is given Carell’s $40 million worth of donations to the university. The parking contract may be a sweet deal at the margin for Carell, but even with a discount rate of zero Luskin calculates that it would take nearly 700 years for him to break even with the university. See also Luskin’s take on Senator Grassley’s desire to federally limit university compensation.

The last major item in the WSJ story is the lack of oversight for Gee’s renovation and entertainment budget, which is very generous. It’s hard to argue that Gee’s parties aren’t good for university fundraising, however. Under his leadership Vanderbilt recently completed a $1.75 billion capital campaign. It sounds like some additional oversight could help ensure greater discretion and a better return on investment, but as long as the money keeps rolling in Gee’s entertainment budget should continue to be large.

I’ve made it clear in the past that I have reservations about a lot of what Gee’s doing and am glad to see him being reined in by the Board and the press, but the WSJ article seems that it may have focused a bit too much on the negative while not giving enough mention of what he’s accomplished. To that end, Vanderbilt has posted a rebuttal of sorts here.

Some excerpts of the article are below. Let me know if you want the whole thing.

The opening of the article:

NASHVILLE, Tenn. — At Vanderbilt University, the board is trying to rein in star chancellor E. Gordon Gee, without running him off.

Since arriving here in 2000, the 62-year-old Mr. Gee has dramatically boosted the 133-year-old school’s academic standing and overseen fund raising of more than $1 billion. Mr. Gee’s $1.4 million annual compensation is among the highest for U.S. university leaders.

But supervision of Mr. Gee by the university’s 44-member Board of Trust has “probably been a little loosey-goosey,” says trustee Edward Malloy, a former president of the University of Notre Dame. Vanderbilt paid more than $6 million, never approved by the full board, to renovate and enlarge Braeburn, the Greek-revival university-owned mansion where Mr.
Gee and his wife, Constance, live. The university pays for the Gees’ frequent parties and personal chef there. The annual tab exceeds $700,000. Some trustees’ concern was aroused when they learned that Mrs. Gee was using marijuana at the mansion. The chancellor told some trustees she was using it for an inner-ear ailment.

Now change is afoot. Trustees recently created a subcommittee to monitor Mr. Gee’s spending. For the first time, the full board will get reports about his expenditures and pay package. A second new board committee is scrutinizing potential conflicts of interest and likely will look at the university’s longtime contract with a parking company in which a trustee holds a big stake.

On the mansion:

Meanwhile, the university began renovating Braeburn, which was built in 1915. The project, which included new plumbing, heating and electrical systems, expanded the mansion by 3,700 square feet, to a total of 19,700. Construction permits estimated the cost at $2.1 million. But the final tab exceeded $6 million, according to a person close to the situation.

Mr. Hall says he knew the building was in poor repair but the extent of the work was a “surprise.” Mr. Gee says, “We indicated some of the things that we thought would be important, including creating a space for all the entertaining we were going to do.” However, he says he didn’t keep tabs on the project’s cost because he didn’t want to be perceived as trying to shape the project for his personal gain. “I was told it was done right, it was done well and it was done on budget,” he recollects. In hindsight, he agrees he should have learned the amount and kept the full board apprised.

Still, Mr. Gee says, “we paid for that house over and over and over again.” He notes that the university has raised more than $1.2 billion since he arrived and says, “A lot of that was raised in that house.” Some of the money went to build the endowment, which has grown to about $3 billion from $2 billion in 2000.

Mr. Gee estimates that Braeburn is home to several hundred events a year. The events range from five-guest dinners served by a waiter to large fund raisers for Nashville-area nonprofits where Vanderbilt pays the bill. Improving community ties “is a very good use of university resources,” Mr. Gee says. “We don’t live here to have parties for ourselves.”

In some cases, the connections to Vanderbilt are more tenuous. Three years ago, Mr. Gee and his wife hosted a party to celebrate a memoir written by their friend Marshall Chapman, a rock singer, songwriter and Vanderbilt alumna. Ms. Chapman says 300-plus guests dined at tables covered with tie-dyed cloths while she sold about 65 copies of her book. The party cost Vanderbilt more than $15,000, according to the person familiar with the situation.

On the marijuana:

In the fall of 2005, university employees discovered that Constance Gee, a tenured associate professor of public policy and education, kept marijuana at Braeburn and was using it there, according to people familiar with the matter. A few weeks later, several trustees and a senior university official confronted Mr. Gee in his office, telling the chancellor he shared responsibility for allowing marijuana on university property, the person familiar with the situation recalls.

Trembling, the chancellor replied, “I’ve been worried to death over this,” according to this person. Mr. Gee said his wife smoked marijuana to relieve an inner-ear ailment, this person says. The Gees decline to comment on the incident.

Mrs. Ingram, Vanderbilt’s board chairman, formally reprimanded Mrs. Gee for possessing and using the illegal drug. The matter was “handled appropriately and satisfactorily,” says Mrs. Ingram, who is chairman of Ingram Industries Inc., a conglomerate with interests in book distribution and shipping.

[Thanks to Renee for the tip.]


3 thoughts on “Gordon Gee gets WSJed!”

  1. We wrote about this at almost exactly the same time. I think the article was way too negative, and it takes Gee’s accomplishments totally out of the picture. That said, there’s got to be some oversight. The ends do not justify the means.

  2. I thought the marijuana dig was totally gratuitous. The article was ostensibly corporate governance issues in the university setting. What do Constance Gee’s marijuana habits have do with that? Very little. I usually have a lot of respect for the WSJ, but the pot revelation practically turned the article into a tabloid.

    As for the overspending issue, I think Gee has done a damn fine job. Of course there needs to be some oversight, but I don’t know if the situation merited the vilification of Gee on the front page of the WSJ. Personally, I think someone on the WSJ staff was out to burn Gee.

    A non sequitur: one of the ads on the side of the screen is attempting to entice me to buy a product that detects alcohol in breastmilk. Nice.

  3. You ask, “who better to do that than the wife of a teetotaling, LDS chancellor of a top 20 university?” I’ll tell you: the wife of a teetotaling, LDS chancellor of a top 20 university who does not herself use drugs. The legalization argument carries much more weight from non-users, in my opinion. Still, you’re right.

    Barzelay has a hilarious examination of scenarios in which Mrs. Gee acquires her reefer.

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