Harvard is paying Claudine Gay roughly nine hundred thousand dollars a year to sit on the faculty she once ran, after she left the presidency under plagiarism allegations and a federal civil-rights investigation. The salary runs roughly triple what a tenured full professor earns, paid by an institution that does not pay its own taxes. Scott Douglas Gerber walks the paperwork in Elite Universities Reward Disgraced Leaders with Million-Dollar Soft Landings for National Review and is right about the pattern. He thinks the boards can be made to behave by electing better trustees. I have outlived that hope. The trustees are the apparatus.
Miss Gay’s nine hundred thousand dollars is not a salary. It is the price of her silence and her continued presence in the building, and the building knows it. The trustees of Harvard, a tax-exempt institution sitting on the largest university endowment in the country, approved it. At Virginia, Jim Ryan received a $1 million sabbatical on his way out the door and an $825,000 post-resignation salary while a federal civil-rights investigation into admissions and hiring at a school he ran was still open. The board’s answer to finding the dean of the business school under federal investigation was to promote him to president. Mr. Beardsley, I will not mention the résumé he scrubbed of past DEI activities; that is between him and his biographer. The trustees approved all of it. Never apologize, never reimburse, never let the bylaws catch up.
Section 4958 of the Internal Revenue Code was written for exactly this. A tax-exempt institution that grants an unreasonable financial benefit to an insider is supposed to face intermediate sanctions and the threat of losing its exemption. The provision sits on the books. The boards do not enforce it. The donors who pick the boards do not enforce it. The IRS has not, on the public record, opened a Section 4958 intermediate-sanctions proceeding against any major research university. The people whose job is to mind the institution are paid, with the institution’s money, to lose interest in minding it. The Section 4958 tax is itself a confession — Congress wrote the law precisely because the boards would not police themselves. The tax is the wrist-slap. The college student carrying a third of an ounce of marijuana across state lines does not get a tax code that forgives his breach in exchange for a generous severance. He gets a felony and a future with the door shut. The custodian who steals fifteen minutes gets fired; the president who lifts other people’s scholarship gets a corner office and a salary the custodial staff will never see. The board writes both terminations, and writes them for different people.
The pattern is older than Miss Gay. Lou Anna Simon resigned as president of Michigan State in January 2018, hours after Larry Nassar was sentenced to prison; four months later the trustees agreed to a five-hundred-million-dollar settlement with hundreds of survivors. Graham Spanier was forced out by the Penn State trustees in the Sandusky matter, later convicted of child endangerment, with the conviction later vacated because the statute he was convicted under was not yet in effect when his conduct occurred. E. Gordon Gee resigned the presidency of Ohio State in 2013 after recordings surfaced of him making disparaging remarks about Roman Catholics and other universities, was named president emeritus, accepted another university presidency the following year, and left that one too. The only thing new is the size of the parachutes, which grows with the size of the endowments, which grow because the trustees never say no.
The corporate boardroom runs the same machine. Enron’s board signed off on the off-book partnerships that gutted the pension savings of thousands of employees while the executives cashed out millions in stock; both men were eventually convicted, but the realized gains stayed realized. Wells Fargo’s board paid John Stumpf a seventeen-and-a-half-million-dollar fine and walked him out the door with a retirement package after the bank opened millions of unauthorized accounts in customers’ names — the customers, not the executives, got the worst of it. AIG’s board paid out a hundred and sixty-five million dollars in retention bonuses to the very unit whose bad bets brought the firm to its knees, in March 2009, after AIG had taken more than a hundred and eighty-two billion dollars of committed federal support. Cerberus extracted roughly eight hundred million dollars from Steward Health Care over the decade it owned the hospital chain — a figure reported by Bloomberg and the Private Equity Stakeholder Project — loaded the company with roughly nine billion dollars of debt per the bankruptcy filing, and watched it file the largest for-profit hospital bankruptcy in American history in May 2024. When the Senate voted to hold the chief executive, Ralph de la Torre, in criminal contempt for stonewalling the investigation, that was the first such vote in more than fifty years. He stonewalled anyway. These are not isolated failures. They are the same lever pulled in different rooms. The board that protects Gay protects Stumpf. The board that gives Beardsley a presidency over the rubble of his own dean’s school gives Cerberus nearly a fourfold return on a hospital chain it bankrupted.
A fine is the cost of doing business. A prison sentence is for the people the law binds but does not protect — the kid with a bag of weed, the migrant with a fake Social Security card, the worker who steals a tools-inventory pallet from the loading dock. The insider gets the parachute because the insider writes the bylaws. Universities did not invent this. They inherited it.
Mr. Gerber thinks the boards can be made to behave by electing better trustees. The trustees are the apparatus. They will not indict themselves. They will not claw back the parachute. They will not even name what they have done, except in a National Review column by a man who names it better than the boards ever will and then asks them to cure it. The soft landing is not a malfunction of the system. It is the system.
Nine hundred thousand dollars a year comes out of the same endowments that fund the financial-aid students whose tuition the same boards keep raising. Miss Gay has not paid for her plagiarism allegations. Mr. Ryan has not paid for his stonewalling. Mr. Beardsley has paid nothing for the deanship he was promoted out of. The students pay. They have always paid. The check goes out. The trustees meet. The next disgraced president gets the next golden parachute.