August 11, 2004
The Kenny Boy professorship

Now that Kenny Boy Lay has been officially indicted, his alma mater has publicly considered its options for the economics professorship he endowed, and the $1.1 million donation that came with it (link via Kevin). Today, Chron columnist Loren Steffy takes a closer look at it and suggests a solution.

If the only option is returning the cash to the perpetrators of some of the biggest corporate scandals ever, universities might as well try to do some good with it instead.

Often, though, their hands are tied because the money comes with stipulations. Missouri can't, for example, transform the Lay chair into a professorship in business ethics, a move that would be both ironic and pertinent.

In an e-mail obtained by the Columbia Daily Tribune, Missouri Chancellor Richard Wallace said if Lay were convicted, the school would prefer to remove his name from the professorship, and "in accord with the terms of the endowment, we believe that this would require returning the money to Mr. Lay," according to an Associated Press report.

In Lay's case, returning the money would be an outright insult to the thousands of Enron employees who lost their jobs and their retirement money. As he did with so much else, Lay used Enron stock as his currency to endow the scholarship in 1999.

School officials, in what proved to be a shrewd investment decision, sold the stock and netted the $1.1 million. That means returning the cash would actually make money for Lay more than hapless employees who took Lay's advice to buy Enron stock made on their investments.

Perhaps Missouri, like Seton Hall with its [Dennis Kozlowski-donated] auditorium, should keep the Lay professorship and rather than recoil in shame hold it up as a reminder: Money doesn't elevate you above the law. It isn't a pass to abdicate your responsibilities to employees.

And more importantly, good works layered on moral turpitude aren't restitution or redemption.

Admittedly, the school may not be able to fill the post. The title alone is a conversation killer at cocktail parties, on par with "I'm a journalist ... "

So be it. Let the school keep the money, even if it just sits in some bank account, hidden as if it were an asset in a special-purpose entity. Let the teaching position remain empty, a perpetual reminder of the transgressions of the past.

It seems a fitting tribute to Lay's legacy: an empty chair.

I'd love to ask the Missouri Board of Trustees what motivated their decision to liquidate the Enron stock. I presume they just preferred the cash - anyone remember if Enron stock paid dividends? - but talk about your lucky breaks. Anyway, I love Steffy's idea, and I wholeheartedly endorse the notion that giving the money back to Lay serves no good purpose. I also think it should be clear that even if Kenny Boy gets acquitted (which he well may), that doesn't remove the taint from his money. Not that I'd expect profs to start sending in their resumes for this position if that happens, but still.

Posted by Charles Kuffner on August 11, 2004 to Enronarama | TrackBack

perhaps they can buy enron stock and give that back to him.

Posted by: Michael on August 11, 2004 10:44 AM

"Admittedly, the school may not be able to fill the post." Something tells me Loren Steffy isn't familiar with the current higher education hiring environment. You think an economist hungry for an academic position would be put off by a thing like that? You don't know economists.

Posted by: tibor on August 11, 2004 4:26 PM

Tibor: You're spot on. An endowed chair is a big damn deal. Those who think the name on it matters all that much don't know much about higher education these days.

Posted by: kevin whited on August 11, 2004 9:18 PM