Princeton alumnus William Robertson is one step closer to reclaiming nearly $600 million of funds from his alma mater after a New Jersey court ruled that the Robertson Foundation can add fraud and misrepresentation to its list of charges against the university.
During the fact-discovery phase of the case that began last year, Robertson said he found evidence of fraud in the university’s handling of his family’s fund, including internal Princeton documents from as early as 1992 showing the university spent foundation money on research centers and other programs outside the fund’s province.
New Jersey Superior Court Judge Neil Shuster’s ruling allows the court to grant monetary damages to the plaintiffs — Robertson and his sisters, Katherine Ernst and Anne Meier — if they succeed in their attempt to pull the foundation’s funding from the university. Robertson has served for 30 years on the board of trustees for the fund, which was established by his parents in 1961 to encourage graduates of Princeton’s Woodrow Wilson School of Public and International Affairs to pursue careers in public service.
“I’m very gratified, as is my family, that the judge has allowed us to expand the charges,” Robertson said. “We have considerable evidence that there is fraud involved, and even though this is an august institution, it’s clear that something is wrong at Princeton, and we are the primary victims of their wrongdoing.”
The amendments to the complaint were granted in light of the thousands of pages of documents Robertson discovered, according to Shuster’s opinion. But Princeton’s legal counsel was successful in barring the plaintiffs from attaching the documentation to the amended charges.
“The new charge doesn’t really add a lot by way of substance, but it does add some by way of rhetoric,” said Douglas Eakeley ’68 LAW ’72, an attorney representing Princeton and the individual foundation board members charged as defendants. “There are no material issues of fact involved.”
In precluding the attachment of the new documents to the complaint, the court has addressed the university’s major concern, Princeton General Counsel Peter McDonough said in a statement. Through his office, McDonough declined to comment beyond the statement.
Princeton, however, is not the only university accused recently of using funds for unintended purposes.
At Yale, Alan Dworsky ’52 contributed $100,000 towards the construction of a student organizations center two years ago, but the space was never completed. Instead, the funds will be spent in the development of an undergraduate writing facility, said a Yale administrator who asked not to be named.
Yale has had other problems satisfying donors. In a high-profile 1991 case, Lee Bass ’79 donated $20 million for the creation of a Western Civilization program that was delayed by turnover in Yale’s administration and a failure to design courses or name assistant professors. After years of such delays, after Yale administrators ultimately returned Bass’ funds with interest.
The University’s residential college system was also briefly curtailed when Yale administrators delayed construction proposed by Edward Harkness, a 1897 graduate. Harkness took his gift to Harvard, but ultimately he agreed to fund the University’s first residential colleges after Yale’s administration apologized.
But while most of Yale’s problems with gifts are in the past, Princeton’s legal battle is just beginning. Fact discovery will conclude on Feb. 28, and Eakeley said the university plans to move for summary judgment when the expert discovery phase has concluded in the spring.
If Princeton’s bid is unsuccessful, the trial will begin in February 2006, Robertson family attorney Seth Lapidow said.
“We’re busy chewing our way through the Princeton witnesses who have been involved in this foundation, some of them since the ’60s,” Lapidow said. “We think the case is going very well. So far, we have been successful against rather silly opposition.”
Both sides said they have pursued arbitration, but have been unable to resolve their respective concerns. Eakeley said he hopes for a speedy resolution to the case.
“I think it’s in everyone’s best interests to put this behind us as quickly as possible,” he said. “They’re alleging wrongly and falsely what we consider very serious charges.”
Regardless of the outcome of his case, Robertson said university donors should have the final say in their gifts’ destinations.
“The people who give money, whether it’s a little or a lot, care about what’s done with their money,” Robertson said. “They should be able to see that it goes where they want.”