UPDATED: Harvard Business School’s Gift From Tata Trusts
The original opinion article by Alan Beard wrongly stated that the Tata Trusts have directed public money to Harvard Business School and contained some other factual errors.
The Tata Trusts have directed no public money to Harvard Business School.
The Daily Caller has made substantial changes to the original opinion article.
The Daily Caller apologizes for the error.
Recent revelations regarding the naming of Tata Hall at the Harvard Business School (HBS), if true, are deeply disturbing and morally reprehensible.
As reported in The Times of India and several other publications, a $50 million gift agreement between Harvard and well-known Indian business magnate and HBS alum Ratan Tata in 2010, resulting in the subsequent construction of Tata Hall in 2013, is now under investigation by the Indian government.
India’s Public Accounts Committee’s (PAC) sub-committee on Direct and Indirect Taxes has expressed concern that the $50 million donation may have inappropriately taken advantage of the tax-free status of donations from charitable trusts.
The Indian government sub-committee investigating this matter has stated, “construction of [Harvard’s] Tata Hall did not amount either to charity or international welfare in which India was interested,” but instead may have been for the “promotion of personal interest of one/some of the trustees of various Tata Trusts.”
The investigation is ongoing. If the investigation concludes that the gift to Harvard was accompanied by violations of Indian tax law or made under a cloud of inappropriate behavior, what will Harvard’s moral obligation be? Should Harvard return the funds? Should Harvard rectify any problem — if one is shown to exist — in some other way?
The purpose of a public charitable trust in India is to benefit the country’s poor and downtrodden.
In 2017, the Tata Institute of Social Sciences (TISS), previously a significant beneficiary of Tata Trusts funds, stopped financial aid to students coming from India’s most economically and educationally disadvantaged castes primarily due to funding deficiencies. The funds for the poorest in India have literally been redirected to the wealthiest.
Although not included in the ongoing PAC investigation, an equally important concern in the unfolding story is the conspicuous role played by Harvard Business School Dean Nitin Nohria in this now-questionable transaction.
Three months before the completion of Tata Hall, in September 2013, Nohria was appointed a non-executive director to the board of Tata Sons, the holding company of Mr. Tata’s companies.
In themselves, these facts demonstrate no wrongdoing. Nevertheless, experts in corporate governance and management, in particular Paul Pelosi Jr. (former Speaker of the House Nancy Pelosi’s son) and Columbia Law’s John C. Coffee, have raised serious questions about the propriety of a university dean serving on the board of a company that is also a major donor. Professor Coffee has even asserted, “the dean is thereby compromised.”
Because of the ethical questions raised in the way the funds were donated to HBS, it would appear that Harvard has some explaining to do. The nature of Mr. Tata’s gift may prove to be a public relations disaster if the Indian government’s investigation determines the funds are related to tax law violations or do not advance the interests of India.
Can a school — indeed the preeminent business school that holds itself out as the standard for best practices in management — really afford to avoid addressing a situation where its actions have been less than exemplary? Already some Harvard students and alumni are demanding answers to the institutions deafening silence. Will the institution own up to the problem and remedy the situation? Or will it continue to project an uncaring, unfeeling image of elites who were born with silver spoons in their mouths oblivious to their privilege and unwilling to make amends for possible unethical behavior?
Alan Beard is a managing director of Interlink Capital Strategies, a Washington, D.C.-based financial advisory firm, and a former adjunct professor at Georgetown University. Christopher Sampah contributed to this op-ed. Sampah is an intern at Interlink Capital Strategies.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.