Economist Andrei Shleifer demoted by Harvard

It appears, now that his best friend, Larry Summers, is no longer Harvard president, that Harvard has finally slapped the wrist of superstar economist Andrei Shleifer for costing the university $26 million in fines, plus enormous legal fees. The Boston Globe reports:

Harvard strips economist of title for violating ethics rules
By Marcella Bombardieri. Globe Staff

Star Harvard economist Andrei Shleifer has been stripped of his honorary university title, following an investigation into whether he violated the university's ethical rules while advising the Russian government.

This morning, the entry for Shleifer in the on-line campus directory changed from "Whipple V.N. Jones Professor of Economics," to simply "Professor of Economics." A Harvard spokesman confirmed that the new title was accurate.

[By the way, that's a great name for an Old Harvard Man: Whipple VanNess Jones. He was founder of the Aspen Highlands ski mountain. (Does that make him a mogul mogul?) The name "Whipple Jones" was borrowed for a character on the soap opera The Bold and Beautiful]

The title, known as a "named chair," is an honor bestowed upon a distinguished senior professor. However, at Harvard, named chairs are generally not tied to salary, so the loss of the title doesn't mean that Shleifer will be penalized financially. The title "professor," indicates that he will retain tenure.

"I was a Professor of Economics last week, and I am a Professor of Economics this week," Shleifer said in a written statement. "My students, my colleagues and my work are what matter to me."

It is unclear if he faces other punishments. Shleifer was found by a judge to have conspired to defraud the federal government by making personal investments in Russia while advising the country on the United States' behalf. In a settlement with the U.S. Department of Justice, he agreed to pay $2 million. Harvard agreed to pay $26.5 million, and a former Harvard staff member, Jonathan Hay, agreed to pay between $1 million and $2 million.

Harvard's interim dean of the Faculty of Arts and Sciences, Jeremy R. Knowles, acknowledged this week that the university had concluded its investigation, and said "appropriate action" had been taken. But he said Harvard would not comment on the nature of the action. Shleifer issued a brief statement Thursday saying he was "delighted" to have the matter behind him.

Controversy over Shleifer hurt former President Lawrence H. Summers, because some professor suspected he had intervened on behalf of his fellow economist, a close friend, even though Summers recused himself from the case.

Neither his critics nor his supporters were pleased by the change in Schleifer's title.

"Does that place him in an extraordinarily embarrassing position? I don't think so," said mechanical engineering professor Frederick H. Abernathy, who has denounced Harvard's handling of the case. "If students put two or three lines in a paper without a proper quote, they are hauled before a [disciplinary] board and they are often given six month off."

Economics professor Lawrence F. Katz called the disciplinary action gratuitous.

"Andrei Shleifer is one of the finest social scientists on the planet, a huge magnet for students and a wonderful colleague," he said. "I don't think we should be playing games with names of chairs."

So, will the economics profession ever discipline Shleifer for his role in the looting of Russia, or is he too connected? In 2003, in the middle of the scandal, he was appointed editor of the Journal of Economic Perspectives by the American Economics Association. Fellow big name Harvard economist Edward Glaeser denounced prominent investigative journalist David McClintick's Institutional Investor report on Shleifer as "a potent piece of hate creation—not quite 'The Protocols of the Elders of Zion,' but it's in that camp."

My published articles are archived at iSteve.com -- Steve Sailer