This giant story was picked up on 6/10 by Brian Leiter as it broke, and I (his biggest critic) will be the first to give him complete respect for posting it on his blog.
NYU [Law] Channels Wall Street: New Documents Show Lavish Pay, Perks and Secret Deals
According to documents unearthed in a month-long search of public records, NYU Law School has created an array of nonprofits to funnel money into lavish perks for its professors. The money has been used by professors to buy multi-million dollar brownstones and condos in Manhattan and Brooklyn with portions of some loans forgiven over time. In some cases, even the interest charged on the loans has been reimbursed.Some of the more vomit-inducing facts include:
. . . on December 9, 2004, the NYU School of Law Foundation made a $2,850,000 mortgage loan to one of its law professors, Richard (Rick) Pildes to purchase a 6 room, 3 ½ bath, luxury condo with views of the Hudson River.The article continues:
That deal followed an earlier one with Pildes in 2001. On January 30, 2001, the NYU School of Law Recruitment Assistance Corporation gave a $200,000 mortgage loan to Pildes and magically made him a tenant in common with the nonprofit in a brownstone on West 10th Street. On October 29, 2004, the same nonprofit bought back Pildes’ 49 percent interest in the West 10th Street brownstone for $3,000,000, according to the public record it filed with New York City, even paying $42,000 in transfer taxes.
So let me get that straight. The law school gave Pildes a $200K mortgage to buy a share of a house, then bought the same house back from him three years later for $3MM? What is that, like $1MM per year profit under the table for this "professor", paid by the law school? And of course, this
Pildes said he was out of the country and couldn’t access the records to provide greater detail.
Er, how about using your f**king brain? You know, the same one that can stand in front of a class and reel off the irrelevant and intricate facts of countless first-year cases each year without even looking at the book? But somehow you can't recall any kickbacks or large brown envelopes stuffed full of cash from a recent house purchase? Oh, sorry, I forgot - he's a law professor. Stuff that happens in the real world confuses them...but strangely always seems to financially benefit them...
According to the article, Pildes is something of a, well, a piece of shit:
Pildes has had at least one high profile involvement with Wall Street. In 2008, Pildes filed an Amicus Curiae (friend of the court) brief with the U.S. Supreme Court on behalf of seven former Commissioners of the Securities and Exchange Commission (SEC). The brief was to defend placing a newly created Public Company Accounting Oversight Board (PCAOB) under the jurisdiction of the SEC following the scandals at Enron, Worldcom and a host of other companies. Pildes told the court that the SEC and self-regulatory agencies “have collectively succeeded in protecting the integrity of U.S. markets.” Just months after this brief was filed, Wall Street collapsed under the weight of its own corruption and the ineptitude of its regulators.Actually, no. After reading that, he's a giant c**t, the kind that fucked the economy and messed up an entire generation. Stealing a luxury house in NYC on the backs of students is low on the list of his crimes and cover-ups. But it's not just him.
Anna Deavere Smith, the actress, has a Masters of Fine Arts degree from the American Conservatory Theatre, according to her profile at NYU. In addition to being a Professor at the NYU Tisch School of the Arts, she is listed on the faculty page at the NYU Law School. That status apparently qualified her to receive a $1 million mortgage on a property on N. Moore Street in Manhattan from the NYU School of Law Faculty Retention Assistance Corporation on May 23, 2001.An actress? On the law school faculty?
On February 2, 1999, law professor Noel Cunningham and his partner, adjunct professor Laura Cunningham, received a $1.4 million mortgage for a brownstone in the Park Slope section of Brooklyn. The loan went to $1.5 million 11 months later. The nonprofit that arranged the deal was the NYU School of Law Faculty Retention Assistance Corporation. Noel Cunningham had already been a law professor at the school for 24 years, suggesting retention was not an issue.The article goes on and on and on.
Brian, nice job. Considering the fact that you highlighted this article before we did, you deserve some credit.
But a note to our readers - if you see something, say something! We should be picking up on this FIRST, not last. You have our email addresses. Or just post a comment bringing it to our attention, because there are plenty of the writers here who peruse the comments very regularly and who can jump on stories like this.
When big news breaks on 6/10, we need to be reporting it on 6/10, not 6/11 or 6/12 or 6/13...
Perfect story.
ReplyDeleteHalf of NYU's grads - in the current economy and not necessarily in years past, but certainly now - are pounding the pavement out of work while privileged law professors suckle the sweet bloated teat of student loan money for the length of their careers.
Many current NYU students are Debt Slaves (if not from money..) and they will never see the lifestyle from practicing law that is enjoyed by their professors, who are not out in the field, working 6 hours per week.
These serfs may also have a view of the Hudson but I'll wager it's not from a 6-bedroom but rather a tiny cramped studio as they struggle to earn a living in the glutted "noble profession" that is law.
I think you are right about half of NYU Law grads being unemployed. It is a smaller percentage for the recent graduates and becomes a very high percentage unemployed for less recent grads.
DeleteThis whole operation, without any accountability for employment results beyond the 9 month mark and with luxury homes attached to a teaching job is pretty sickening.
The problem is that NYU is producing huge numbers of unemployed lawyers and is taking the money of at least twice as many law students as the job market can absorb on a career basis to fund luxurious salaries and amenities for the law school's teaching staff.
This story should make us all sick. It is clear evidence that law schools are run as for-profit entities for the benefit of those lucky professors and administrators who are infesting our higher education system like termites.
ReplyDeleteAnd professor getting paid over $100k is a scam. They are teachers for gods sake, not superstars who need retaining.
And these underhanded schemes set up to divert cash from the school without anybody knowing are disgusting and must be exposed. Because students just don't understand how little a degree should cost. I bet that a NYU law degree could be delivered for under 10k per year if it weren't for these luxurious scams,
And it goes on at every school. At my school the profs all had beautiful large old houses near campus, the kinds of houses that millionaires live in. I always thought they were renting them from the uni (and they might have been), but now I wonder if they were being used as gifts or a way to pay profs more than their stated salaries.
Bottom line - professors who take advantage of these schemes are scamming their students. End of story. I am not surprised that this clown had no excuse because there isn't one. He's a scammer.
Google wasn't indexing the story from "Wall Street on Parade." Great piece of investigative work. I'm speculating that the piece probably sent shock waves through the professoriate class when it broke starting at NYU between the haves and have nots. Should be real interesting to watch this story develop. Give Leitner his due.
ReplyDeleteThis is nothing new. Brooklyn Law School pays Wexler, who holds no job whatsoever, her normal salary and gives her a private car service and a multimillion dollar apartment in Brooklyn Heights (a very expensive neighborhood). Talk about welfare.
ReplyDeleteAdjunct, if you or anyone else is interested in helping me with some perfectly legal snooping so that we can break our own stories, contact me.
Ladies and Gentlemen, take a look at your limousine-liberal LawProfs, who better society by spending other people's money on themselves while getting indebted law grads outside the ivory walls to do their work for free.
ReplyDeleteJC said it best:
"Woe to you, teachers of the law and Pharisees, you hypocrites! You are like whitewashed tombs, which look beautiful on the outside but on the inside are full of the bones of the dead and everything unclean."
Disgusting, classist pigs.
^ They better the economy by spending other people's money on themselves?
DeleteThey aren't the only ones ...
"Forgive my student loans! I need to stimulate the economy by making BIG-TICKET PURCHASES! Houses and cars, people - if I don't get 'em, America dies!"
- Most of you
Don't be silly 6:28. Nobody here is asking for what you write. We are merely asking that the system is changed do future students don't fall into the same trap. Few of us don't intend to pay off our loans in full.
DeleteBut very clever use of a fake position to try to make us look foolish.
Wait, what? Forgiving ScamDean/LawProf principal and interest on Big-Ticket Purchases is A-OK, because 'Merica, but for God's sake, whatever you do, be sure to put every last screw to student debtors, because...it ensures that the federal cash rolls in such that it finances the forgiveness of said principal and interest on ScamDean/LawProf Big-Ticket Pruchases.
DeleteWhat the I don't even, BKJesus.
^ It's NYU's own money, to spend as they please. YOUR student debt is owed to the taxpayers.
DeleteWhat's wrong with you? Is the distinction really that hard to understand?
10:45/BKJesus, I get it, thanks. I would argue that "the american taxpayer" is not the obligee on my loans, but if by Sallie-Mae extension you want to say the taxpayers, then fine.
DeleteAs 7:25 said, this is about future students. NYU and others similarly situated "spending their money as they please" can clearly run afoul of moral hazard and economic inefficiency, but you've made it abundantly clear that don't care about that.
Not just a moral problem but I believe that excessive compensation of employees at a tax exempt organization can be a reason to yank non profit status according to the IRS. Is the foundation a 501c3? Maybe not which would be good reason to run it through the foundation
Delete@1126,
DeleteSpending your own money NEVER creates a moral hazard. Removing the adverse consequences of bad decisions (through bailouts, loan forgiveness, etc) is what creates the moral hazard.
I've never heard of a limit on how much a non-profit can pay its employees (if there is a limit, however, it's FAR more than a few million dollars). If it was up to me, no 501(c) could pay ANY employee more than $50,000 per year without losing its tax-exempt status. Pretty much all non-profits are scams. But the law sayeth otherwise.
Absolutely- section 4958 addresses it although it refers to directors and officers- and insiders in a position to influence. Not sure if law professors fit any of those categories.
DeleteYou act like there's some kind of maximum income law that they're circumventing.
ReplyDeleteNYU could pay each of its professors a BILLION dollars if it wanted to (assuming the school's budget could handle it).
If you have evidence that these perks are not being reported to the IRS as income, then let's hear it.
You miss the point. Students pay tuition thinking that it goes towards their education. Turns out it goes to professors' three mil condos.
DeleteI don't think many students saw that fact advertised in the admissions materials. The school and profs kept if all rather quiet - because it's wrong.
Pay a professor a billion dollars. But disclose it to students. Who cares about the IRS.
^ Didn't the original post say that these documents are a matter of public record?
DeleteAdditionally 6:36 AM, why launder the money through all these non-profits if there is nothing wrong with it?
DeleteJust because it isn't illegal, doesn't make it morally justified.
The 1.1 trillion in student loan debt should be reason enough not to give oneself a 1 million dollar a year real estate deal.
Also, did we all just get chastised by dupednontrad? I feel like I'm in the newsroom again getting chewed out by my EIC...
^ Launder money through a non-profit?! Do you realize that NYU itself is a non-profit?
DeleteIf you think professors at a law school are being paid too much, that's fine. Vote with your feet and don't go there.
Hey 7:25/9:43, I was talking to 6:28 and didn't add the timestamp, sorry.
DeleteI think you neglected to read the article. I understand NYU is a non-profit, but these deals went through several endowments and "retention" programs. It was anything but transparent.
DeleteAs far as voting with our feet, that's exactly what we're encouraging people to do. Like I said, these practices by NYU are not illegal, but they're certainly not morally praiseworthy.
I don't care if they pay their professors a billion dollars, but do it honestly and let students know that's where their tuition money is going.
If they don't think there is anything to hide, then don't hide it.
9:43 here.
DeleteActually my bad duped, I was referring to the OP, Adjunct Law Professor. I thought you posted it for some reason.
@1118,
DeleteIt IS transparent. Believe me - if it wasn't transparent, you wouldn't have heard about it.
The original article (which you claim *I* didn't read) says that the records are publicly available.
It's strange (or perhaps not strange at all) how the biggest boosters of "non-profit" endeavors are the people who are making the largest profits off of them.
ReplyDeleteYou're not Leiter's biggest critic. I am.
ReplyDeleteCheck out:
ReplyDeleteNew Building Aims to Draw Students to U. of Baltimore Law School
http://chronicle.com/blogs/buildings/new-building-aims-to-draw-students-to-u-of-baltimore-law-school/32767?cid=at&utm_source=at&utm_medium=en
Perhaps NYU loaned UB the money ....
In any case, your comments are needed on this story.