The Harvard project in Russia: a conspiracy to defraud the government (Boston Globe)

[maryxmas]

Boston Globe
August 4, 2005
Harvard, teacher, and lawyer to pay US $30m
By Marcella Bombardieri, Globe Staff


Harvard University, a Harvard professor, and a former staff member have agreed to pay the US government about $30 million, a year after a federal judge ruled that economist Andrei Shleifer and lawyer Jonathan Hay conspired to defraud the government by making personal investments in Russia while they were under contract to serve as impartial advisers on Russian economic reform in the mid-1990s.

Although the Department of Justice sued five years ago, seeking $120 million in damages, the government is recouping in the settlement most of the $34 million it paid Harvard for its work in Russia while Shleifer and Hay were making investments.

Neither the university, Shleifer, nor Hay admitted liability as part of the settlement, which Harvard officials said was the largest the university has ever paid.

''The defendants were entrusted with the important task of assisting in the creation of a post-communist Russian open market economy and instead took the opportunity to enrich themselves," US Attorney Michael J. Sullivan said in a statement yesterday. ''As evidenced by the hard-fought, five-year litigation of this matter, the US attorney's office is committed to protecting federal funding from misuse and ensuring the adherence to the requirements of government contracts."

Harvard agreed to pay $26.5 million, while Shleifer will pay $2 million. Hay, now a lawyer in London, will pay between $1 million and $2 million, depending upon his earnings over the next 10 years. Shleifer and Hay were top officers of the law reform project at the now-defunct Harvard Institute for International Development, which was under contract with the US Agency for International Development from 1992 to 1997.

The settlement in the civil case prohibits Harvard from paying either Shleifer's or Hay's portion of the costs.

It was announced in June that an agreement was imminent, but the terms had not been worked out. In a separate but related case, FFIA, a Cambridge investment firm partly owned by Nancy Zimmerman, Shleifer's wife, agreed last year to pay $1.5 million to settle the government's charge that the firm had improperly used the development institute's resources.

In separate statements, the university and the two men said essentially that they were settling to avoid the costs of protracted litigation.

Harvard pointed out that Judge Douglas P. Woodlock dismissed the most serious charge against the university, that it had knowingly deceived the government, and found only that it had violated its contract by virtue of Shleifer and Hay's conduct, of which Harvard was not aware.

''We welcome having this matter behind us," Harvard general counsel Robert W. Iuliano said in a statement. ''Over the course of the litigation, the court has affirmed our position that the university engaged in no institutional wrongdoing."

Shleifer said in a statement that ''an individual can fight the unlimited resources of the government for only so long. . . . I strongly believe I would have prevailed in the end, but my lawyers told me my legal fees would exceed the amount that I will be paying the government."

In particular, Martin F. Murphy, Shleifer's lawyer, took issue with Sullivan's statement that Shleifer had taken advantage of his position to enrich himself.

''After eight years of searching, the government still has no evidence to support that contention -- because it is simply not true," Murphy wrote in a statement. ''Professor Shleifer worked in Russia because he wanted to help his native country move from communism to a market economy, and as USAID has repeatedly acknowledged, Professor Shleifer's work was extremely valuable."

Hay's lawyer, Lawrence S. Spiegel, also defended the value of Hay's contributions in Russia. ''While Mr. Hay continues to believe passionately in the work that he and others performed in Russia, his fight with the US government has involved considerable sacrifice," Spiegel said in a statement. ''Mr. Hay has thus decided to move forward with his life and settle this dispute."

The Harvard project was designed to help rebuild the Russian economy. The international development institute's contract had a conflict-of-interest provision prohibiting employees from making investments in Russia. Shleifer has argued that he was a consultant, not an employee.

Among Woodlock's findings was that Shleifer and Zimmerman invested $200,000 in Russian companies and Russian government debt and that Shleifer, Zimmerman, and Hay bought several hundred thousand dollars worth of shares in Russian oil companies, but in the name of another individual.


вот я одно не поняла -- _кому_ они выплатят эти штафы.

Comments

[boris-ivanov.livejournal.com]

Американскому правительству. В первом предложении написано.

[maryxmas.livejournal.com]

значит, невнимательно читала.
вот только я логики не вижу.

[boris-ivanov.livejournal.com]

Правительство финансировало этот проект. Although the Department of Justice sued five years ago, seeking $120 million in damages, the government is recouping in the settlement most of the $34 million it paid Harvard for its work in Russia while Shleifer and Hay were making investments.