Cooper Union: Will Jamshed Bharucha go quietly?

What a mess.

I haven’t written about the tragedy of Cooper Union in a while, because after it started to charge tuition I felt that the battle was lost and that there was little more to say. (For background, see Casey Gollan’s annotation of my six previous blog posts on the subject between 2011 and 2013.)

Even by the ultra-dysfunctional standards of Cooper Union, however, the current situation there is surely at an all-time low. And there’s really no indication whatsoever that this wonderful and storied institution is going to be able to rebound from its current crisis. Indeed, as befits a tragedy, it’s entirely possible that the good intentions of the people fighting to preserve everything that was great about Cooper Union will turn out to be the very thing that precipitate this worst-yet plunge into chaos.

The single most important person, of those well-intentioned individuals, might well be New York’s attorney general, Eric Schneiderman. His investigation into Cooper Union came to a head last week, when he presented the college’s board with a deal.

Schneiderman has a lot of sympathy with the formal complaint against Cooper Union that was brought by a group of professors and alumni. They claim that Cooper’s decision to introduce tuition fees was illegal, and they are seeking the ouster of the college’s president, Jamshed Bharucha, along with its shameless trustees. They also want an injunction preventing the college from charging tuition.

The problem is that if Cooper Union were to be prevented from charging tuition immediately, it would be broke. Not only does the college have a monster $175 million mortgage which it has no real way of making payments on without tuition fees, it has also recently borrowed another $51 million (and had to pay a rumored $8 million in fees to do so) just so that it can install all the infrastructure needed to charge all those fees in the first place. (Unsurprisingly, the administrative overhead associated with charging tuition fees is substantial.) Meanwhile, the college’s investable endowment – everything except for the land under the Chrysler building – is down to $123 million, and most of that is “corpus” money which can’t be spent. (Only the income from the corpus can be spent.)

The inevitable result of an injunction blocking tuition fees, then, would be the liquidation of the land under the Chrysler Building – the only asset keeping Cooper Union alive. That land is taxed at a rate of $18 million per year, but thanks to Cooper’s non-profit status, those tax payments end up at Cooper Union rather than with New York City. Giving up the land would mean giving up those payments in lieu of taxes, or PILOTs. And giving up the PILOTs would mean not only giving up an income stream worth hundreds of millions of dollars in net present value, but also giving up any real hope of ever reverting to a state where tuition was, once again, free.

Or, to put it another way, the only conceivable way of reverting to tuition-free status is to charge some kind of tuition fees, at least for the time being, if only to pay down Cooper’s monster debt load.

Still, the plaintiffs and the attorney general are absolutely correct that Cooper Union in general, and its president in particular, are going about charging fees in exactly the wrong way. For instance, in a glowing recent self-report, Bharucha talks a lot about “building on Cooper’s many distinctive characteristics”. But his idea of a “distinctive characteristic” is that downtown New York is cool. His idea of a “distinctive characteristic” is not any of the special pedagogic atmosphere that came from tuition being free. For instance, because tuition was free, Cooper students – especially engineers – have historically been able to take as many classes as they like. Earlier this month, however, in what amounted to a shadow tuition increase, the administration tried to charge extra for anybody taking more than 19.5 credits per semester.

Eventually, the plan was scrapped, in the face of protests. But the administration’s heavy-handed efforts to increase revenues at all costs have hardly ceased. For instance, Cooper Union has started sending out letters to students saying that they have been accepted into its computer science program – despite the fact that no computer science program exists, and none of the existing faculty supports such a thing. Similarly, Bharucha in his report boasts of starting an Institute for Design and Computation, in the face of determined opposition. As the Committee to Save Cooper Union writes in its response to Bharucha,

Not only is the rush-to-revenue undermining the integrity of the curriculum, it is circumventing established faculty review and participation. Even if these ill-conceived programs are “successful,” the expansion of infrastructure needed to support them will saddle the school with fixed costs that doom Cooper Union to never be free again.

Bharucha, remember, is the man who wants to “build a global brand” and “improve through investment”. Neither of those things are consistent with a path to shrinking Cooper Union back to a size where it can educate all of its students for free, using only the revenue from its endowment. He’s also the man whose office was occupied for 65 days, and who has clearly failed at his primary job of leadership: on campus, attitudes to Bharucha range from concern and mistrust to outright hatred. If introducing tuition was indeed as necessary as Bharucha says, then his primary job was always going to be to set out a clear vision and to get the broader Cooper community on board. In that, he has certainly failed.

Bharucha, just by dint of his utter lack of trust and respect on campus, is a bad, weak president. Schneiderman obviously came to that conclusion as well, and pressured the board not to renew Bharucha’s contract, which expires in 18 months. The board agreed. In Schneiderman’s view, his office “is intervening before its financial problems ruin the school”, as James Stewart puts it: he’s essentially taking on a role as the non-profit equivalent of a macroprudential regulator. Given how otiose Cooper’s trustees have been, it’s definitely good news that some kind of external power is forcing them to do this: it’s far from clear that they would ever have made that decision on their own.

But it’s what happened after that decision that’s really worrying. The board vote was taken in private, in secret, in a meeting with the board’s lawyers, where even Bharucha wasn’t present. And then the decision was immediately leaked to the WSJ.

The leak did Cooper Union no favors at all. Schneiderman never asked for credit: he had no particular need or desire to be known as the man who effectively forced Jamshed Bharucha out of Cooper Union. And before the leak, it was still possible that Bharucha could continue to lead Cooper Union for the next 18 months, before announcing that he had done everything he’d come to do, put the college on a sustainable footing, now it’s time for new leadership, etc etc.

Instead, in a fit of petulance, Bharucha, and/or his allies on the board, decided to go scorched-earth. By making his firing public, the WSJ’s multiple board sources were basically behaving like petulant toddlers. One of them, Daniel Libeskind, even went on the record about what went on in the meeting – an astonishing thing to do, which looks very much like a clear breach of his fiduciary responsibilities. And it’s even more astonishing when you discover that Libeskind himself complained earlier about the actions of another board member, Kevin Slavin, writing that “Executive sessions of the Board, with or without the presence of the President, surely have to be confidential.”

Schneiderman, then, might have been “trying to mediate between the two sides”, in the words of the NYT’s Elizabeth Harris – where the lawsuit plaintiffs were on one side, and Bharucha’s board was on the other. Indeed, it seems as though Schneiderman’s plan is that the plaintiffs and the board would together file a new petition on behalf of Cooper Union, which will explicitly allow the college to charge tuition, at least until it can find a way of going back to being free.

But in the end, it looks as if no one is going to get what they want. The plaintiffs are no closer to getting free tuition, nor are they going to get the resignation of the board. The board, having effectively pre-fired Bharucha, seems to be stuck with him, at least through the rest of his contract. And Schneiderman, who was trying to act in the best interests of the institution as a whole, seems to have turned it into a college with an ill-tempered lame-duck president. For the next year and a half, Cooper Union is going to be led by a man who has lost whatever ability he might have previously had to raise money (his main job) or attract faculty talent, including a new architecture dean. Oh, and Cooper still might lose that lawsuit.

The only good news here is that everybody knows Cooper Union is now in the market for a new president: the search does not need to be conducted discreetly. But the bad news is that it’s hard to see why any qualified candidate would want to be president of Cooper Union. It has already lost the main characteristic that made it so special – its free tuition. The drop-off in applications means that its legendary architecture school reportedly found only 19 acceptable applicants this year – despite the fact that a full class size is 30. (No one knows how many of those 19 applicants will actually end up attending Cooper.) And the ill will towards the college’s well-paid new administrators means that a new president will be forced from day one into a viper’s pit of poisonous internal politics. Which in turn will make fundraising all but impossible.

The situation is hardest on the board, which was supportive of Bharucha right up until the point at which they happily defenestrated him to appease Schneiderman. The board members (and the board itself is by all accounts quite bitterly divided) are now forced to find themselves a new president, but they don’t even know who or what they’re really looking for.

One choice would be to look for someone who will continue to implement Bharucha’s vision. That would involve continuing to expand Cooper Union’s programs (and its tuition revenues) in a desperate attempt to make the cashflows balance. Another choice would be to adopt Schneiderman’s goal of reverting to free tuition, and trying to find some kind of glide path under which Cooper eventually becomes small enough that every student can be educated for free. But they can’t have it both ways. And in the meantime, they’re stuck with a president who seems more interested in defending himself than he is in doing what’s in the college’s best interest.

If Bharucha cares at all about Cooper Union, it’s pretty obvious that at this point he should resign. He can do no more good, and his continued presence only makes everybody else’s task that much more difficult. My guess is that his lawyers are quietly negotiating an exit package with the board: Bharucha goes away, but gets paid through the end of his contract, something like that. In return, Bharucha would sign some kind of non-disparagement clause: he’s done enough damage to Cooper Union’s reputation already.

My fear, however, is that having lost the support of the students and the faculty and the board and even the attorney general, Bharucha is going to stubbornly stay where he is, refuse to sign anything, and generally be unhelpfully obstructive. (If he wanted to be constructive, then he and his supporters would never have leaked his ouster to the WSJ.)

More than one Cooper insider has described Bharucha to me as a “lunatic”; all of them worry deeply about how far he might go, if pushed. Make no mistake: if he puts his mind to it, Jamshed Bharucha has the ability to effectively destroy whatever future remains for Cooper Union. Here’s hoping his friends on the board, including Daniel Libeskind, pull him back from that ledge and help him to leave quietly, with a tiny shred of dignity.