If Richard M. Joel is telling the truth in his defense of YU after the publication of the Weiss report (he says everything is just fine), then why in the last few months was the YU bond rating dropped to JUNK and why did they sell off ten major holdings in their real estate portfolio, and why did they lose control of Einstein Medical School?
I posted this on January 8, 2009:
The NY Post cites today an irate investment guru who "demands" the Yeshiva University board must be replaced in the aftermath of the Madoff and Merkin scandals [hat tip to the ever vigilant UD Blog].
In a letter to YU President Richard Joel, Andrew Sole of Esopus Creek Advisors says it is time for the school, "...to begin the healing process today by installing new fiduciaries that are untainted by scandal and embarrassment."
Note well that it looks like Andrew has an ax to grind against YU and one of its supporters Sy Syms. Sole leads a, "hedge fund that led a shareholder revolt last year against off-price retailer Syms when the chain's management voluntarily delisted its shares." We don't know what that's all about, but it sounds like Esopus may have lost some money in a failed deal.
We too believe the YU board should resign. But we have no ax to grind. We base our "demand" on our own informed analysis and on another letter, one that we received 1/2/09 by email from a prospective parent of a YU student. He was planning to send his son to YU but now appears to be reconsidering and asks me, "Given the state of affairs of YU... do you have another suggestion for a college program that would encourage him to learn at least an hour or two a day and not otherwise get absorbed by the American college experience." I told him I could not counsel him or his son...
I’m not able to advise you because I don’t know your goals or your son’s character.This email wakes us up to realize that the real loss to YU has been to the capital of its good name. A school's success and viability rests primarily on its reputation, not its bank account. That reputation has been tarnished, perhaps blackened by the scandals of late which demonstrate an abundance of poor judgment over a long period of time, and more so now by what Mr. Sole accurately calls its "ostrich defense... ignoring the crisis."
You do sound sincere and committed from your brief email so I’m willing to say that wherever your son does go to school he will turn out just fine.
Sadly the leaders at YU are not stepping up to reassure people like yourself about the viability of the resources of their institution at this difficult juncture. Initially I thought it would just take them a little longer to regroup and then they’d do their jobs to get out the message that the school is sound. Now it looks like I was too optimistic...
We agree with Sole that just because you ignore it, this storm is not going to pass. And we agree with him that there is a failure of leadership at YU.
Where we disagree is that we judge the crisis to be critical to the health of the institution -- eating much more into the core of the school's essential mission than at its endowment's bottom line.