Cornell's Alumni Trustee Election-- Unlawfully Rigged by the Trustees?

Why nonprofit corporations are more likely than for-profit corporations or governments to be corrupt

Nonprofits are the most corrupt organizations in the world. For-profit companies are selfish, but they direct their selfishness towards making money for their owners, which means their managers are sharply limited in how much they can enrich themselves, and the owners make them produce inexpensive, high-quality products so they can sell a lot of them at low prices and make profits. This is Adam Smith’s point: this kind of greed is harnessed to the public good. Government bodies are less closely harnessed to the public good, but at least the managers at the top are elected officials, who must try to please the voters.

But what about a charity? It has neither shareholders, customers, nor voters, to keep the greed and selfishness of the managers in check. Stock analysts are not second-guessing every decision of a charity, nor are journalists making their careers by exposing their inner workings. If the charity has a big endowment, it doesn’t need to worry about funding. If it doesn’t have a big endowment, it needs to think about its donors, but if they are small donors who assume that charities are unselfish simply because of the label “non-profit”, the charity will operate as a way to make people feel good by telling them nice stories in return for their small checks, with no desire on the part of the donors to find out where their money is actually going. How many of you who donate to the Red Cross or the American Heart Foundation have looked into how much their executives are paid? How many of you would be grateful to someone who told you, instead of feeling sour and disappointed at them when they show you what a chump you are?¹ This is why nonprofit corporations— including religious ones, which have even less oversight than others— are so often run by grifters, or are used by the very rich to stash useless relatives in moderately high-paying but extremely safe jobs.

Universities are typical. College alumni are notoriously gullible. You can tell them they’re funding entrepreneurship and then use all of the money for DEI and they’ll never know the difference. Often they are used to business levels of honesty, rather than academic levels. A professor knows he needs to get promises in writing if they’re from a dean; a businessman may think a man’s word is his bond.

Cornell in particular: the effort to suppress alumni from voting for trustees

Cornell University presents us with the latest case of college corruption.² Two dissident, independent, candidates are running to be on the board of trustees, the governing body that approves the budget, hire and fires the college president, and so forth. The board has 64 trustees, of which only 8 are elected by alumni, but even those 8 are a threat to the self-perpetuating trustees (who select their own successors).³ The board of trustees has written rules that prevent candiates for alumni trustee from telling anybody they are running or trying to tell anyone why they would be good trustees. Instead, the board not only keeps secret the mailing list of alumni eligible to vote it also endorsed its own candidates for the 2 seats that are open.⁴ The board is so scared of a trustee being an outsider who might raise questions at board meetings that they’ve said they’ll disqualify any independent who actually criticizes the current board and tries to tell alunni that there’s anything wrong at Cornell. It seems unbelievable, but look at their website:

Many who might be superb trustees are financially unable and/or do not desire to engage in campaigning. It is for these reasons as well as having candidates considered solely on their merits, that Cornell prohibits campaign activity of any kind by or on behalf of any candidate. Campaigning includes, but is not restricted to, soliciting endorsements of one’s candidacy, written or oral contact with alumni about one’s candidacy, statements to the press, advertising, posts on social media and other networking technologies, press releases, etc. If publishers of college, unit, class, or club newsletters, e-mails, social media posts, or their like wish to print any candidate information, they must give the same information in the same space for all candidates in that election. Alumni are prohibited from contacting candidates to ask questions or engage in conversation relating to the election. Questions should be directed to Alumni Affairs. Candidates, whether endorsed by CATN or not, will be asked to sign an agreement that reflects the anti-campaigning policy in this paragraph. Failure to sign the agreement may result in elimination from the ballot.

If you are a Cornell alumnus, therefore, go right now to https://alumni.cornell.edu/volunteer/leadership/trustees/voting/ and vote for the two non-endorsed candidates, Cindy Crawford and Ken Davis. Why them? Because they are non-endorsed. Why would anybody vote for anybody endorsed by a board of trustees that would write the self-aggrandizing rules just quoted? These two candidates, however, are clean of that taint of corruption.

“Unendorsed candidate; petitioned to be on ballot” means that Crawford and Davis actually have some support from alumni, instead of being picked by the other 56 trustees, the trustees who are scared alumni might pick somebody who would look into how well and how honestly Cornell is being managed.

These other four candidates, Paul Hayre, Joy Higa, and Elizabeth Dunn von Keyserling Lynch, and Karen Stewart, are all stooges of the current trustees. They have accepted endorsement, which means they have accepted the rules that try to disenfranchise alumni. I don’t know anything else about them, but this tells me that they are despicable people.

Of course, democracy and accountability is not always a good thing. With sufficiently aristocratic trustees, people raised from birth to despise self-interest and operate for the good of their people whatever the cost, elections would be a waste of time, auditing would be mere bother, and there would be no need to countersign large checks for cash if they have expenses. Perhaps Frau von Keyserling Lynch is in this aristocratic tradition. Would the Trustees of Cornell University ever act for their own advantage rather than for the good of the university? That depends on your view of human nature. If you have a multi-billion dollar organization run by trustees who have no outside oversight and choose their own successors, what do you think’s going to happen? Are they going to operate for the public good, or might they be tempted to act for their personal aggrandizement and convenience?

It wouldn’t work in Indiana. And New York State does not have a happy history of unselfish public servants. I was just reading how a number of mayors of New York City had to suddenly leave the country after their terms of office— Robert van Wyck (left for Paris in 1906), Jimmy Walker (Europe generally, 1932), and William O’Dwyer (Mexico, 1950). Old stories, but when the last four attorney-generals elected in York State have been Letitia James, Eric Schneiderman, Eliot Spitzer, and Andrew Cuomo, you have to wonder how much things have changed.

Boss Tweed was never so free from accountability running the New York City budget as a Trustee is in running Cornell. Boss Tweed, at least, had to make sure his voters go their free turkeys every year and run a party machine that would get out the vote. What do you suppose happens in the state of New York when the people who run a giant lucrative organization don’t even have to win elections? Nobody investigates because who is going to say the trustees of a university are subject to temptation like the rest of humanity? Would they really steer contracts to their friends? Would they vote with the Chair of the Board just to avoid embarassment? Would they ever pressure any admissions officer to get their children admitted, or the children of their friends, family, co-workers, or domestic help? And what kind of people do you think the current trustees choose to work with them and share the duties of mutual oversight? Do you think they are more honorable than most people, and the other trustees would never choose someone cooperative instead of someone who would exercise their own judgement and raise waves where necessary?

I don’t know of any scandals, ever, at Cornell, but this past year has been embarassing for the Trustees. In January 2024, they unanimously said

Cornell was founded on the principle that ‘any person can find instruction in any study.’ Under President Martha E. Pollack’s leadership, the university has remained faithful to this principle and to the core values that unite our institution. Today, the Board of Trustees of Cornell University met and voted unanimously in support of her leadership of the university. . . .

“Free expression is the bedrock of democracy,” President Pollack said in her April 2023 announcement of Cornell’s current academic theme year, “just as academic freedom is the bedrock of higher education.” We remain committed to advancing the critical work of Cornell’s mission: teaching, research, and public engagement; and we look forward to continuing to advance it under President Pollack’s leadership.

By May 2024, President Pollack resigned in disgrace. In just a few months, something happened to her 100%-wonderful leadership. And she didn’t even have to testify before Congress like the presidents of Penn and Harvard who were fired.⁵ She did it on her own.

Did the Trustees resign too, in shame that they’d unanimously supported a worthless human being as President? Most of you, my readers, would be embarassed at having been shown to be incompetent stewards of the public trust. Not these people. “Shame” is not a word with which they are acquainted. Nor does anybody tell them. Indeed, nobody knows their names. I’ll list them here, though, at least in a footnote.⁶ They are, no doubt, respectable members of the Eastern Establishment, trust fund babies and affirmative action millionaires who view their role as trustee as a duty to vote with the leadership and attend a few meetings to eat extremely good food, and to be politely silent rather than ever be so rude as to ask awkward questions. I went to Yale, so I know the type.⁷

But let’s get to the interesting legal issues. There is, of course, no legitimate reason not to allow candidates in alumni trustee elections not to campaign. The purpose is obviously to allow the corrupt gang who currently controls the organization to maintain their absolute control, without even the bother of dissenting voice, even though their majority on the Board is so huge that they don’t have to fear ever losing a vote on an issue. So it is obvious that the four alumni who are running as board-endorsed candidates are scoundrels and should be ostracized from polite society.

Legal considerations: how to sue

Cornell’s no-campaigning rule clearly unethical and self-aggrandizing. Is it also illegal? Yes, I think. This is a technical legal matter, but the ordinary principles of corporate law have very obvious application. The two basic principles are corporation law are that:

1. The majority of the board of directors or trustees gets tremendous discretion to make decisions for the organization. You can’t go to court and get a decision reversed just because it is obviously stupid. The judge will not second-guess the board.

2. The majority of the board of directors cannot act contrary to the corporate charter and cannot act to benefit themselves at the expense of the corporation generally. They can be very stupid so long as they do not personally gain, but they must be extremely fair and wise when it comes to anything which benefits them personally.

Corporate law courses deal almost entirely (or maybe 100%) with for-profit corporations, so let’s start with those. The idea of a for-profit corporation is that various people jointly own a company, and they elect a board of directors to run it. It’s only fair to let people who’ve invested more of their money in the company have more say in how it’s run. Thus, the general idea is “one-share, one vote”.⁸ If you have 51% of the shares, you can elect 100% of the directors and make all the company decisions, and if the minority shareholders think you’re stupid, all they can do is sell their shares.

Nonetheless, the minority shareholders have rights, and they can sue if somebody who owns 60% of the shares tried to pay 100% of the dividends to himself. There are lots of tricky ways majority shareholders try to do this, and the U.S. economy only works because we have principles of corporate law that make it illegal. The majority shareholder can be stupid, but he can’t be unfair. Indeed, people from all over the world like to invest in American stocks because they know that American courts will prevent minority shareholders from being ripped off by the controlling shareholders.

The same principles apply to nonprofit corporations. Pretty much every charity is a corporation. They are, however, corporations without shareholders. Like for-profit corporations, they are run by by a board of directors, often, as in the case of Cornell, called a board of trustees. In a for-profit corporation, the shareholders elect the board of directors. In a non-profit corporation, the corporation’s charter says how the directors are chosen. In the case of Cornell University, the alumni elect 8 of the 64 trustees. Most of the others are chosen by a vote of the existing trustees as a group, whenever some trustee’s term expires. Thus, the board is “self-perpetuating”. This is very common for nonprofits. It of course leads to inbreeding, favoritism, and corruption, but it’s hard to know what system would be better. Some charities, like Cornell, do have a few trustees who are not self-perpetuating— student trustees, alumni trustees, faculty trustees, an employee trustee, and government trustees— in an effort to reduce cronyism. Whenever that happens, the self-perpetuating trustees try to neuter the independent trustees, and they usually succeed.

It would clearly be illegal for the other 56 trustees to say, “We’re going to ignore the charter and choose the 8 alumni trustees ourselves”. That would violate the rights of the alumni too obviously. So they need to think of a less obvious way to achieve the same goal.

What if the other 56 trustees say, “There will be an election by the alumni of the 8 alumni trustees, but they can only vote for the 8 candidates we select”? That would also be illegal. It is not enough to have an election; it has to be a free election. This is nonetheless the way Yale University changed its rules a few years ago when an independent candidate came close to winning the election for alumni trustee. I haven’t looked at Yale’s charter, but it probably was worded loosely and said something like “there will alumni trustees” without specifying that the alumni would choose them. People who draft charters, gift agreements, and even state laws are often incompetent, or are outsmarted by intelligent people who stand to gain by outwitting altruistic founders.

At Cornell, the crony trustees couldn’t use the Yale strategy, because the charter does require alumni trustee elections. So what they did was say, “There will be an election by the alumni for the 8 alumni trustee positions, but we will select the 8 alumni we like, and nobody can ask alumni to vote for anybody else.” It seems to me that that is just as illegal.

The corrupt lawyers hired by the 56 trustees wrote, as I quoted earlier,

Many who might be superb trustees are financially unable and/or do not desire to engage in campaigning. It is for these reasons as well as having candidates considered solely on their merits, that Cornell prohibits campaign activity of any kind by or on behalf of any candidate.

That’s obviously a pretext. Those lawyers are used to relying on the first principle of corporate law, the “business judgement rule”, which says that you can’t go to court just because the board of trustees does something stupid. For the business judgement rule, it would be fine to say, “We think we would get better managers if we only hired university vice presidents who never went to college because they couldn’t afford it and who are too shy to ever answer questions from the faculty”. The trustees can’t go so far as to say, “We’re trying to sabotage the university,” but if they have an actual reason they are willing to put out in public, it doesn’t matter if it’s ridiculous.

But remember the second principle of corporate law: protecting against self-aggrandizement by the trustees. If the trustees enact a rule that solidifies their own power and infringes on the corporate charter, the business judgement rule doesn’t apply. They need to have a real reason. And “good candidates won’t campaign” doesn’t cut it. Neither does the extremely humorous “only rich people can campaign”. I bet if you look at the current trustees, they are mostly given the job either through connections with rich people or as a reward for donating large sums. A court case could establish this, because it would give a chance for someone to question the existing trustees as to what particularly qualifies them to be trustees.

A no-campaigning rule has the obvious effect of entrenching the power of the non-alumni trustees and enabling them to steal from the organization if they feel so inclined. Thus, the burden is on them to show why it has some good effect.

In fact, we can go a step further. There is no reason whatsoever the other 56 trustees should be making rules for how the 8 alumni trustees are chosen. It is prima facie dubious that the other 56 trustees are acting in good faith. Any reasonable regulations for the 8 alumni trustees should be made by those 8 trustees. Otherwise, we can assume the regulations are made to suppress alumni so as to defeat the purpose of the charter. And, since the existing 8 alumni trustees were chosen under rules made for the benefit of the 56 non-alumni trustees, their decisions are not valid either.

I think the law is clear. But, alas, justice is never automatic, and is not always inevitable. What might be done to enforce the law?

A challenge would take the form of a motion for a declaratory judgement and injunction to apply to future alumni elections.⁹ Someone could sue on his own behalf, as someone thinking of running for alumni trustee, or possibly on behalf of Cornell (a “derivative suit”). He would say that he believes the no-campaigning rule is illegal, but he does not want to incur the cost of running until a court establishes that the rule is illegal and tells Cornell to drop the rule. He would also sue for reimbursement of his legal fees. This would be a suit in New York State court, not federal court, and there would be no appeal to federal courts, which means it would be subject to the usual corruption of the New York State judicial system. I do not know enough state politics to know how that would play out, but politics and publicity would be an important part of the case, the part where Cornell would have its best chance.

For the moment, though, please let any friends of yours who are Cornell alumni know that the election is being held, and refer them to this Substack so they can see how corruptly their alma mater has become.

Footnotes

1. American Heart Association: $2.2 million, from its latest IRS form 990. American Red Cross, $819,000. I don’t believe the Red Cross number is really that low, actually. I bet if you take a look at housing allowance, travel, expenses, pension, and so forth you’d find a lot more. Same with AHA, actually. Who checks their accounting? Who has any incentive to check? If you find they’re cheating, you can’t make a profit off of it. People will just think you’re an unpleasant, heartless, person.

2. I’m one of the signatories of an Alumni Free Speech Alliance letter dondemning the Cornell no-campaigning rule. The letter is much more measured than this Substack.

3. Here are the rules for selecting the 64 Trustees of Cornell:

a. Ex officio trustees. The governor, the temporary president of the senate, the speaker of the assembly and the president of the university shall be ex officio trustees during their respective terms of office.

b. One life trustee. The eldest lineal descendant of Ezra Cornell shall be a trustee for his or her life.

c. Appointed trustees. The governor shall appoint, subject to confirmation by the senate, three trustees, one each year for a term of three years, commencing on the first day of July.

d. Board trustees. Fifty-six trustees shall be selected in such manner and for such terms as the board of trustees may determine. At all times, such board trustees shall include at least: two members from each of the fields of agriculture, business and labor in New York state; eight trustees to be elected from among and by the alumni of the university; two trustees to be elected from among and by the faculty of the university at Ithaca and Geneva; two trustees to be elected from among and by the membership of the university's student body at Ithaca; and one trustee to be elected from among and by the nonacademic staff and employees of the university at Ithaca and Geneva.

4. Cornell does provide interesting statistics on the voting.

5. Saturday Night Live did an excellent skit on the 3 head-girl college presidents. Take a look at the surprise character at the end, a fictitious president of the University of Phoenix. “Cornell was founded on the principle that ‘any person can find instruction in any study.’ Under President Martha E. Pollack’s leadership, the university has remained faithful to this principle and to the core values that unite our institution.” The Phoenix guy says almost the same thing: “We’ll teach you anythingon any subject, so long you’re willing to pay us for it.” We Yalies have always laughed at the Cornell hotel school, and for good reason. Really, do take a look — the resemblance in sentiment is uncanny.

6. Not all lady presidents of universities have had to resign in disgrace, though it is surprisingly common whenever anybody takes a close look at them. The President of MIT, Sally Kornbluth, was the third of the college presidents who testified before Congress and defended their tolerance of pro-Hamas demonstrators. President Kornbluth survived, however, because unlike the presidents of Harvard and Penn, she did not have a track record of intolerance for free speech, so her claim that she was so much in favor of free speech that she was not going to crack down even on someone so vile as to support the Hamas massacre of 2024 was not absurd. And so she has continued as President, and a popular one, despite criticism from those who think she should have been harder on the pro-Hamas demonstrators.

7. As of January 2025, the list is below. I hope they are embarassed to be Trustees. It is a sign of rascality, of being a knave, a drone, a parasite on society. If we had a Revolution, they would all be strung up on traffic lights and hung for the amusement and edification of the populace. At least, listing them here will mean, since the Internet is forever, that their grandchildren will have to change their names.

Kraig H. Kayser — Chair

Howard L. Morgan — Co-Vice Chair of the Board

Beckie Robertson — Co-Vice Chair of the Board

Stephen C. Robinson, Esq. — Co-Vice Chair of the Board Ex-Officio Members Michael I. Kotlikoff — Interim President of Cornell University Kathy Hochul — Governor (Deputy, Martin J. Mack, Esq.) Carl E. Heastie — Speaker (Deputy, Anna R. Kelles, Ph.D.) Andrea Stewart-Cousins — President Pro Tem (Deputy, Lea Webb)

Other Members Deborah J. Arrindell Juliet P. Tammenoms Bakker Timothy M. Barry Jessica M. Bibliowicz Peter R. Call Paul M. Cashman John Ceriale Mario Cilento Ezra Cornell Jennifer L. Davis Hei Hei Depew Kimberly Nicole Dowdell Douglas F. Eisenberg Eldora L. Ellison Richard S. Emmet, II Linda M. Gadsby, Esq. Durba Ghosh Eric Gonzalez, Esq. Valisha Graves Kevin Jacobs Bobby Jain Kevin P.B. Johnson Eric Adam Kutcher David R. Lee Adam J. Levinson William Lim William J. Lipinski Mary Armstrong Meduski Howard P. Milstein Stephen T. Mong Reuben A. Munday, Esq. Allan G. Mutchnik, Esq. Danielle Obisie-Orlu Gilda Perez-Alvarado Ana G. Pinczuk Bruce S. Raynor Dale S. Rosenthal Paul D. Rubacha Hernán J.F. Saenz, III Martin F. Scheinman, Esq. Harriet P. Schleifer Susan C. Schnabel Robert W. Selander Aryan Shayegani, M.D. Anne Meinig Smalling J. Allen Smith Ginger K. So Bradley H. Stone James (J.P.) Paul Swenson Michael L. Thompson John R. Toohey-Morales A’ndrea L. Van Schoick, DVM Enrique J. Vila-Biaggi Kimberly A. Wagner, Ph.D. Leslie A. Wheelock, Esq. K. Lisa Yang.

8. Since I went to Yale, I of course look down on the Cornell Eastern Establishment types. They are not *real* Establishment; they are second-raters, not as smart, not as well-bred, and very likely with worse taste in clothes. I have to say that, even though my father got veterinary and MS degrees from Cornell and my son-in-law is getting a PhD there. But of course graduate students are not real Ivy Leaguers anyway; that depends on your undergrad degree.

Am I so great, then? No. I’m from Urbana, Illinois, and I live in Bloomington, Indiana. I can’t possibly be as classy as a real Ivy-Leaguer whose father and grandfather both went to Yale, as some blue blood born in Greenwich and living Manhattan with kids in boarding schools. But I’m still better than someone from Cornell.

9. You can set up the charter to have it not be one-share one-vote— you have have voting shares and nonvoting shares— but the same idea applies that the directors have to be fair to all the shareholders, not just the ones with the majority of votes.