Columbia In A Tangle Over Links To Embattled JP Morgan Boss Dimon

June 12, 2012 | By
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Lee Bollinger, president of Columbia University, has defended Jamie Dimon, with whom he serves at the New York Fed. Photograph: Rick Bowmer/AP

Columbia University is facing accusations of a conflict of interest relating to the role of its president in cheerleading for the boss of JP Morgan Chase, one of Columbia’s most generous financial backers.

Lee Bollinger, who has been president of Columbia since 2002, has been a vocal supporter of Jamie Dimon despite mounting criticism of the JP Morgan chief executive since the revelation of a $2bn trading loss at the bank’s London office.

But critics say Bollinger has put Columbia, one of the most prestigious academic institutions in the United States, in an awkward position because of the financial support it receives from JP Morgan.

In the wake of the trading scandal, there have been calls for Dimon to step down from his role on the board of the New York Federal Reserve, one of the institutions with regulatory oversight of Wall Street banks.

On Monday, Bollinger said those making such calls were “foolish”. His intervention was significant because Bollinger is chairman of the New York Fed’s board of directors: he became the first board member to speak in defence of Dimon.

In an interview with the Wall Street Journal Bollinger said: “I do not think he should step down.” Bollinger said critics had a false understanding of how the Fed works. “Jamie, myself [and] the other members of the board do not get involved in oversight of the supervisory function of the New York Fed,” Bollinger said.

On Tuesday 53 Columbia students, alumni and staff signed a letter to Bollinger accusing him of abdicating his responsibilities at the university. “As an educator, you have a special responsibility to demonstrate moral and intellectual credibility, something you have failed to do in this situation,” they wrote, calling on him to withdraw his support and push for Dimon’s resignation.

“Three years after the biggest financial crisis since the Great Depression, the country is struggling to rebuild its economy. A stable and appropriately governed financial system is a critical pre-requisite of our recovery. As the Chairman of the NY Fed, we urge you to take the obvious step of demanding Mr Dimon’s resignation,” they wrote.

Columbia is in the midst of a campaign that aims to raise $5bn by 2013 to expand its campus, hire more staff and offer financial aid to poorer students. R Glenn Hubbard, dean of Columbia’s graduate business school, has targeted JP Morgan and other banks as potential major donors.

JP Morgan, a generous and long-term donor to Columbia, offers a matching gift program to employees, effectively doubling the size of any donation. It gives money across the university, endowing over $25,000 to Columbia’s school of social work and sponsoring a summer research program for science teachers.

The bank also manages the university staff’s health saving account (HSA) on behalf of the insurer Aetna. Its ties with Columbia go back to at least 1888 when JP Morgan, the bank’s founder, gave $100,000 to help establish its Morningside Heights campus.

In an emailed statement, the university said JP Morgan Chase was “not one of Columbia’s major donors”. It said that since launching its latest fundraising drive in 2004, the university had raised $4.9bn, of which just under $2m had come from JP Morgan Chase. A spokesman said: “This total, over eight years, represents 0.04% of overall university fundraising. We are grateful for this support, as we are for that from thousands of other individual, foundation and corporate donors.”

 

 

Read the whole story: theguardian

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  1. rcar says:

    The people have conflicts of interest everywhere!

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