✔ ✔ ✔ Rick Wagoner '75, newly elected chair of Duke University's Board of Trustees, doesn't take office until July 1, but he has already made his first big mistake: he refused Fact Checker's request for an interview. We even proposed flying FC and a Deputy to the Detroit area if it were convenient for him, or as an alternative to meet during one of his monthly visits to campus as a member of the Executive Committee.
We pointed out to Wagoner that FC will be writing more about the governance of Duke than any other journalistic organization, and that includes the Chronicle.
No dice. No explanation. We got word from the Brodhead Administration's spokesman Michael Schoenfeld. We figure Wagoner may have been hesitant because of the scorching he got from the media when he was canned as chair at GM. But unlike other media, we were not going to point out that a share of GM stock, $92 when he took over as chair, became essentially worthless in his last days. Nor would we say, as other media have, that Wagoner should be blamed for the loss of $85 billion during his eight years at the helm, the biggest loss ever for any CEO in any corporation. We would tell you, however, that GM builds boring cars, is insensitive to its customers, and it screwed tens of thousands of its rank and file workers.
Loyal Readers, we think you are entitled to know questions we have for Wagoner, even if he offers no answers. So here goes:
✔ A) Mr. Wagoner, oh we can call you Rick. OK, our questions today are not in any order, it's just a conversation. RIck, we'd like to start with the secrecy of the board. Back when Terry Sanford was president, the student government president, along with the editor and managing editor of the Chronicle, went to the room where the Trustees were going to meet later in the day and they sat in. They refused to leave when the meeting was about to begin. Terry Sanford brokered a compromise -- and for a quarter century meetings were open, except for occasions when deep personnel matters were discussed.
Bob Steel and Uncle Dick Brodhead changed that, restoring secrecy about three years ago. They claimed Trustees would be reticent to speak their mind if the meetings were open. You have been a Trustee since 2001; were you ever afraid to speak out, or can you cite a specific incidence when one of your fellow Trustees was afraid? With the first part of your tenure as a Trustee occurring with open meetings, and now with secret meetings, did you discern any difference? Can you explain for us how secrecy benefits Duke University?
✔✔ B) So long as we are seeking your personal opinion based on your own experiences, let's talk about your activities after you "resigned" from General Motors.
✔ You joined the board of Aleris, a bankrupt world-wide aluminum company with headquarters near Cleveland. The company was once traded on the stock exchange, but was private when you joined the board of directors, owned in part by Oak Tree Management, run by your fellow Duke Trustee Bruce Karsh. And now there's an SEC filing to sell stock to the public again. What's notable about this corporation -- aside from the fancy financial footwork -- is its top management who have been pictured in its annual reports. 13 people. All male. All white. What message does that send?
✔ You are also on the board of the Washington Post. In addition to the well known newspaper, this company owns Kaplan Inc., the test preparation company and profit-making college operator. As you may know, three of its former academic officers have filed a whistle-blower suit saying the entire enterprise is a fraud, and among the victims is the US Government which has provided student loans to the tune of $4 billion. There are other charges as well. Even so, last February Kaplan and Duke joined to offer on-line training for people involved in clinical research overseas. This was a real plum for Kaplan, being linked to a legitimate, well respected enterprise. Did you have any role in this? Is this the best partner Duke can find?
✔ C) Rick, you're a financial man, coming up through the GM ranks starting as a financial analyst after getting your degree at Duke and an MBA at Harvard. Let's talk Duke's budget adopted by the Trustees at their May meeting, which will be the framework for your first year as chair.
-- There's been no public word whatsoever about the fate of the Arts and Sciences, which have suffered cut after cut, and faced the loss of some professors. Tell us?
-- You are a former walk-on Duke basketball player so we assume you follow athletics closely. Can you tell us what the subsidy is in the new budget?
-- Since the financial meltdown began, Duke has had to trim its budget, but it's done so slowly in order to avoid a thud. In the new budget, is there another special withdrawal from the endowment to cushion the transition? In the year just ending, that was $72 million.
-- We discovered in a report from Dr. Trask that Duke -- which has budgeted for a sustained return of 8.5 percent on its endowment -- has only achieved a ten year average of 6.5 percent. As it turns out, the state of New Jersey had precisely the same predicament, and its governor has lowered the expected returns -- and thus the amount that can be spent year to year . Did our Trustees do anything like this?
-- Despite the whoop-la of the Financial Aid Initiative (which raised precisely half of the money that Dr. Trask said was needed for undergraduate assistance before he was told to shut up), the Trustees have been able to sustain need-blind admissions only by extra dips into the endowment. Meaning we are eating up more of the money today, and leaving significantly less for future generations. That's obviously not sustainable. In the new budget, does Duke continue its extra distributions for undergraduate financial aid?
✔D) Let's talk China. At GM you were a champion of entering China, even though the prices you could sell cars for were so low that there was hardly any profit. Here at Duke, where do you stand on the Kunshan folly?
You are a financial man. The Fuqua faculty's analysis of two degrees proposed for Kunshan -- which it shot down -- was based almost entirely on the numbers not adding up. What's your take?
Can you explain to us how the faculty in Fuqua could have taken numbers from the Brodhead Administration and eviscerated all its conclusions? And what about the special Board of Trustees committee on China headed by David Rubenstein? They had the same inputs, so how come the committee apparently endorsed the financial viability of Kunshan?
If it could be demonstrated that Kunshan is not the best strategic move for Duke, would you vote to terminate our involvement with this folly, a possibility the Chinese have been aware of since day one?
Lastly on China, there are 37 Trustees, including the President ex-officio. 24 are elected by the Methodist Church. The new Duke Kunshan campus does not include a chapel, and so far as we can penetrate the secrecy, does not even include a room where people can go for meditation and prayer. Is this true?
Will Duke Kunshan University have a cross on its seal and shield, like Duke in Durham? Will Bibles be distributed -- as in Durham -- to gradates? Do you view this is one of our great traditions or not?
And will Duke Kunshan have a statement of aims, like Duke Durham does, professing faith in Jesus Christ?
✔ E) Let's throw out some general topics, Rick, and you can respond. Give us your take on the role of the faculty in the governance of Duke. The role of alumni.
Give us your take please, on academic freedom. Its importance, particularly in Kunshan. Will you insist on freedom not only on campus but off, which is the Duke tradition since the Bassett case? Is there anything less than full unfettered internet access that would be acceptable to you?
✔✔✔ Mr. Wagoner, we consider our questions appropriate for stakeholders who have an abiding love in this university. In light of your failure to grant us an interview, FC is impelled to join with many on this campus who can only hope and pray that you do not do for Duke, what you did for GM.