Kate:

This article would make a good follow up for the Harvard series.....DOJ is
suing Harvard over Case Study #3 which you published as part of my article
on the endowment....This is a False Claims action. Wonder who the private
party is who filed it.

A huge gold star to Uri for picking up on this....

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http://www.washingtonpost.com/wp-srv/aponline/20000926/aponline174609_000.ht
m


                  Feds Sue Harvard Over Russia Plan

                  By Martin Finucane
                  Associated Press Writer
                  Tuesday, Sept. 26, 2000; 5:46 p.m. EDT

                  BOSTON –– The federal government sued Harvard University
and four
                  associates for $120 million on Tuesday, claiming that
Harvard staffers
                  benefited personally from a U.S.-backed program to help
post-Cold War
                  Russia make the transition to capitalism.

                  Harvard economics professor Andrei Shleifer and former
Harvard legal
                  expert Jonathan Hay "abused their positions as high-level
and trusted
                  advisers to and on behalf of the United States in Russia,"
according to the
                  suit.

                  The government said the two men played major roles in the
Harvard
                  Institute for International Development in Russia, which
received $40
                  million in federal funds to advise Russia on
privatization, capital markets
                  and legal reform after the fall of the Soviet Union in
1991.

                  Harvard closed the institute in January.

                  The Justice Department said Hay and Shleifer, along with
Shleifer's wife
                  and a woman now married to Hay, made investments and
business deals
                  in Russia that were in conflict with their duties.

                  Among other things, the lawsuit charges that Shleifer and
his wife invested
                  $200,000 in Russian companies and $60,000 in Russian
government
                  bonds.

                  "What the United States of America was bargaining was
transparency, a
                  conflict-free, bias-free set of advisers," U.S. Attorney
Donald K. Stern
                  said. "That's what the bargain was and they failed to
produce it."

                  The suit seeks $120 million in damages under the False
Claims Act, which
                  allows plaintiffs to seek triple damages.

                  Through their lawyers, the four defendants denied any
improprieties.

                  "We are confident that, as the civil case unfolds, the
court will confirm that
                  the Harvard program significantly fostered Russian reform
and that the
                  government received its money's worth," said David Zornow,
Hay's
                  lawyer.

                  Anne Taylor, Harvard vice president and general counsel,
said the
                  university upheld its end of the deal.

                               © Copyright 2000 The Associated Press

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