TRENTON, N.J. (AP) — Stevens Institute of Technology settled a lawsuit Friday with the state over alleged financial mismanagement and executive compensation.
Under terms of the settlement, the Hoboken-based college’s president, Harold J. Raveche, will resign on July 1, and the school’s board of trustees will retain former state Supreme Court Justice James Zazzali to oversee reforms for the next two years.
“The board of trustees has made significant progress in the past on improving the governance structure,” Lawrence Babbio, the board chairman, said in a statement Friday. “The changes agreed to today will improve our internal controls even more and we look forward to continued success at the institute.”
A 16-count civil complaint filed by Attorney General Anne Milgram had alleged Raveche’s administration spent more than was authorized by the board and improperly used endowment funds to pay university expenses and as collateral for lines of credit.
It also alleged Raveche was paid too much. According to the complaint, Raveche made $770,000 in 2007 in salary and bonuses for overseeing an endowment of about $158 million. By comparison, the president of the Massachusetts Institute of Technology was paid $635,000 that year to oversee $2.3 billion in operating expenses.
In addition, Stevens had lent Raveche $1.8 million since 1995. In 2007, $928,000 of those loans were forgiven to pay for Raveche’s homes in New Jersey and Vermont, according to the complaint. Milgram said the loans were a violation of the school’s charter and of state law, which requires loans be approved by two-thirds of a university’s board.
In a statement, Raveche said, “The board and I look forward to working with the greater Stevens community of faculty, staff, student, alumni and external partners to ensure a smooth transition.”
The board thanked Raveche for raising the school’s profile and for increasing enrollment and sponsored research.