An Impending Trial and Then a Check: Untangling This Foundation's Big Give to Yale

Should an Ivy League university with a $26 billion endowment accept money from a foundation headed by an insurance executive who's about to stand trial for his alleged misdeeds?

While you debate the argument's merits amongst yourselves, we feel it's only right to let you know the university in question—Yale, by the way—has, in fact, accepted the money.

As for the part about the insurance executive standing trial, let's travel back in time to June 2nd, shall we?

That was when New York's highest court again rejected a bid by former American International Group Inc. (AIG) Chairman Maurice "Hank" Greenberg to dismiss the New York Attorney General's statuary action under the New York Martin Act and New York Executive Law, clearing a path for a trial.

Greenberg, at the spry age of 91, stepped down as chief executive officer of AIG in March 2005 after building it into the world’s largest insurer over four decades.

Shortly thereafter, AIG restated over 30 transactions in its Form 10-K for the year ending December 31, 2014 and paid $1.6 billion to settle claims by regulators. "To his accusers," says the New York Times, "Greenberg is just one in a line of disgraced chief executives from the mid-2000s who resorted to accounting fraud."

Fast-forward eight days later to June 16th. Yale University announced it received a $16 million contribution from the Starr Foundation, which just happens to be chaired by one Maurice "Hank" Greenberg.  

But there's more.

In recognition of this gift, the university has renamed its signature leadership education initiative the Maurice R. Greenberg World Fellows Program, whose aim is to "cultivate and empower a global network of people who are prominent in their own communities and committed to a better world."

So, to summarize: Yale renames a leadership initiative after a leader who, according to New York Attorney General Eric Schneiderman, allegedly "orchestrated two major frauds that caused massive losses to A.I.G. shareholders."

Apparently, the advanced class in irony was a victim of funding cuts at Yale.

All kidding aside, of course it is worth noting that Greenberg is innocent until proven guilty. He's received a good deal of public support from figures like former New York governors George Pataki and the late Mario Cuomo. And to hear the Wall Street Journal tell it, prosecutors have been engaged in a costly, decades-long witchhunt.  

What's more, technicalities matter in issues like this one, and the gift to Yale came from the Starr Foundation, but not Greenberg personally. Then there are the legal technicalities. Actions under the Martin Act and Executive Law do not require allegation of culpable intent or knowledge.

But still, the optics are strange. And the timing? Eerily Cohen-esque.

It's almost enough to make you forget that the World Fellows program sounds pretty impactful. According to Yale:

World Fellows participate in seminars, discussions, and research focused on critical global issues, such as economic development and business-government relations. They contribute to Yale’s intellectual life, collaborating with peers, auditing classes, and sharing their perspectives with students in Yale College and the graduate and professional schools. In the greater New Haven community, they volunteer with adult literacy programs and work with local schools and nonprofit organizations.

To date, the program has reached 275 fellows from 84 countries. Greenberg and the Starr Foundation first contributed to the World Fellows in 2006 as part of a larger gift supporting Yale's international initiatives. In 2010, it donated $15 million more to the program's operations and endowment. The Starr Foundation's recent gift adds significantly to the program’s endowment, securing a permanent source of funding.

Greenberg, his wife, Corinne, and the Starr Foundation have also supported a range of international initiatives at Yale, with an emphasis on scholarship related to China. For example, the Greenberg Scholars Program has sent more than 500 students to China in the past 10 years, and the Maurice R. Greenberg Conference Center is recognized as Yale's premier venue for international gatherings and executive education programs.

In total, their combined contributions now exceed $100 million. And it's worth stressing that this support began long before Greenberg's legal troubles did. 

As for the impending trial, it should, at the very least, provide some interesting theater. "Nobody—no matter how rich or powerful—is allowed to commit fraud in our state," state Attorney General Eric Schneiderman said in a statement. 

"We are very pleased the people of New York will finally have a chance to obtain justice at trial."