Buildings donated by 'corrupt' CEOs face name shame

By Ron Scherer

NEW YORK - Taubman. Kozlowski. Brennan.

They're among the disgraced executives that had been thought of as honest businessmen, pillars of the community. Hospitals put them on their boards of directors and named wings for them. Universities wooed them for jumbo contributions to build important centers of learning. Local Boys & Girls Clubs painted their names on their basketball courts.

But now, those big donors have tarnish around their names. Some of them are in jail, some are indicted and accused by the government of being crooks. Should those names be sandblasted off the walls?

It is an ethics question that is reverberating from the ivy-covered walls of Harvard to local YMCAs. Ethics experts say institutions having accepted money that is now tainted need to act to protect their reputation. They point out that keeping a building named for a felon is not a very healthy message for students being groomed as future leaders.

"The ultimate test is whether the institution is subject to ridicule," says Michael Josephson of the Josephson Institute of Ethics. "Do they have any standards?"

Many of the institutions, however, don't see it that way. They argue that the money was given before the donor ran afoul of the law. The cash funds something important, whether it's a hospital wing or a learning center. Furthermore, even if an organization wants to remove a name, it may face legal knots preventing any action.

Despite the potential for embarrassment, most institutions are not lining up sandblasters.

Typical is the response of Brown University in Providence, R.I., which hosts the A. Alfred Taubman Center for the Study of Public Policy and American Institutions. Mr. Taubman, a former chairman of the auction house Sotheby's, is currently incarcerated for a year at the Federal Medical Center in Rochester, Minn., after his conviction for price-fixing. But he gave Brown the money for the center in 1984, when he was a real estate developer in Michigan. "The university has no plans to change the name," says Mark Nikel, a spokesman. "It represents a forward-thinking kind of center."

However, there is no question that for some institutions, centers named for felons make them uncomfortable. That's what is happening at Seton Hall University, which has a recreation center named for alum Robert Brennan, currently serving time for bankruptcy fraud. Mr. Brennan was sued by the Securities and Exchange Commission and the state of New Jersey for hundreds of millions of dollars that his company, First Jersey Securities, lost for investors through less than ethical conduct.

Not far away, with a golden brick facade, is one of the largest buildings on campus: Kozlowski Hall, which houses the business school. It was built in 1997 after a significant gift from Tyco International's former chairman, Dennis Kozlowski, now under indictment for tax evasion.

The buildings have suddenly become an embarrassment to the Catholic university. Last month, a BusinessWeek headline blurted out, "Seton Hall of Shame." Much to the consternation of the administration, reporters have been slinking around the campus to ask students how they feel about taking classes in a building named for a man who is out on $10 million bail.

Now, the university has drafted a new naming policy that will allow the South Orange, N.J., university to remove a name from a building in the future. The board of regents, which sets policy for the 8,500-student school, is also studying whether it can apply the new policy retroactively. The school hopes to have the new policy in place by December.

"We took the gifts in good faith, and I would like to think of all the good that has come from this building," says Karen Boroff, dean of the business school.

Ms. Boroff recounts that a year ago, the school invited Mr. Kozlowski, a former alum, to address a convocation of students. He talked about the importance of personal integrity.

At the end of the speech, Kozlowski received a standing ovation. And a few months later, Boroff wrote him about a student who was so moved by his speech that she realized something she had done in a class was wrong. "I wrote Kozlowski to tell him his gift of time was continuing to earn benefits."

Now, Boroff – who is "saddened" by the experience – uses Kozlowski as a morality tale. "I am telling them that in 10 or 15 years, they might be in this position."

If some of these big donors' names do come off, it would not be the first time. The Chronicle of Higher Education reports that both Augsburg College in Minneapolis and American University in Washington changed building names after donors acted questionably.

Some ethicists recommend going even further in such situations, saying the institution should return the money as well. "To be truly ethical, give the money back," says Chip Espinoza-Johnson, who teaches value-based leadership at Vanguard University in Costa Mesa, Calif.

Still, changing the name on a building does not seem to be high on the list of student concerns. On a recent Saturday outside Harvard University's A. Alfred Taubman Center for State and Local Government, which also houses a center for ethics, many were unaware of the naming issue. When asked, Hope Lozano, a first-year student, thought it would be unfair to rename the school, "because he [Taubman] donated the money. But Paul Novosad, a first-year student from Canada, said, "If the guy's a felon, it would be appropriate to change the name."

Harvard Business School alum Joyce Greenberg remembers a Taubman visit to the campus. Ms. Greenberg, then student president of the real estate club, listened as Taubman explained why he was successful builder. Afterward, he took some of the students out to dinner at a posh Cambridge restaurant that no student could afford. "It was an incredible day," she recalls. But, today, she says, "I think names not held up as venerable should be removed, contract permitting."

• Marius Hentea contributed to this story from Cambridge, Mass.

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