Kozlowski's Crime Pays at Alma Mater, Where Name Stays on Hall

July 20 (Bloomberg) -- Seton Hall University senior Sheena Collum wonders why students at a Catholic institution that's named after a saint are studying business ethics in a building named after a convicted felon.

Collum says she sees hypocrisy in Kozlowski Hall and that the name troubled students and faculty at the school of 10,000 in South Orange, New Jersey, even before donor L. Dennis Kozlowski was convicted last month of grand larceny. The former Tyco International Ltd. chief
executive officer, a 1968 Seton Hall graduate, faces as much as 30 years in prison when he's sentenced later this year for looting the company.

"Seton Hall puts a great deal of emphasis on ethics in society, and I don't think Mr. Kozlowski is an example to follow,'' says Collum, 21, the student government president. ``It bothers me to keep his name on one of our buildings.''

U.S. colleges and universities such as Harvard, Brown and the University of Missouri that have designated buildings after benefactors who were later indicted or convicted are increasingly under pressure to remove the names. Faculty and students say schools should not honor disgraced donors.

Diane Swanson, chairperson of the business ethics education initiative at Manhattan, Kansas-based Kansas State University, says schools and donors should agree that if a benefactor ends up facing criminal charges, his name will be taken down and not restored unless he's cleared. She says this would force schools to think harder about naming arrangements.

Can't Buy Reputations

"It would also signal to the corporate world that business reputations cannot simply be bought,'' says Swanson, 54.

Universities depend on alumni who give money for buildings such as gymnasiums and science and student centers. Alumni donations rose 3.4 percent in fiscal 2004 from the previous year, to $24.4 billion, according to a study by the Rand Corp., a Santa Monica, California-based
research group.

Harvard, located in Cambridge, Massachusetts; Brown, in Providence, Rhode Island; and the University of Michigan, in Ann Arbor, decided against removing A. Alfred Taubman's name from buildings the former Sotheby's Holdings Inc. chairman donated. He was sentenced to a year in prison in April 2002 on charges of conspiring to fix fees paid by sellers of art and antiques.

Kozlowski, 58, who gave Seton Hall $3 million toward the building, was found guilty by a New York jury on June 17 of stealing more than $150 million and selling inflated shares in Bermuda-based Tyco, the world's biggest maker of electronic connectors, industrial valves and security
systems. Kozlowski was indicted in September 2002.

His lawyer, Stephen Kaufman, said last month that he would appeal the verdict. Kaufman didn't return four phone calls seeking comment.

Three Buildings

Seton Hall spokesman Thomas White says the 35-member board of regents won't publicly discuss the naming issue until its next scheduled meeting, a Sept. 23 retreat. ``At this stage, we don't know how the board will act, if at all,'' White says.

The Most Reverend John J. Myers, archbishop of Newark and president of the board of regents at Seton Hall, is away on retreat and can't be reached, according to Catherine Memory, the director of media relations at Seton Hall.

At one point the school -- named for Elizabeth Ann Seton, the first U.S.-born saint -- found itself with three buildings bearing the names of indicted or convicted felons. There was a gym named after convicted money launderer Robert E. Brennan; a library named for Frank Walsh Jr., a former Tyco board member who pleaded guilty to securities fraud in 2002; and Kozlowski Hall. The board of regents voted in 2002 to remove Brennan's name.

`Walls of Shame'

"We were really getting tired of being called the `walls of shame' or hearing, `What is going on over there with all these crooks in high places?''' says communications Professor Robert Allen, who is retiring this year. ``Not only should a Catholic university be as ethically oriented and morally sensitive as a secular university, it should be more so.''

Allen says he spent four years urging the administration to remove Brennan's name from the recreation center donated by the penny-stock promoter. Brennan, a 1965 Seton Hall alumnus, served on the university's board of regents from 1984 to 1987.

Brennan, 61, founded Colts Neck, New Jersey-based First Jersey Securities Inc. He is serving a nine-year prison term for fraud and money laundering and was sentenced to three additional years in June 2003 for contempt of court after violating a judge's order freezing his
assets.

`Like Royalty'

Kozlowski's case came to symbolize corporate greed and corruption, with tales of lavish company spending, including a $2 million birthday party for his wife in Sardinia and a $6,000 shower curtain for his New York apartment.

During his second trial, prosecutors charged that he and Mark Swartz, 44, Tyco's former chief financial officer, used company tax and relocation loan programs to make personal investments, buy jewelry and art and live ``like royalty.''

Kozlowski Hall opened in 1997 and houses the Stillman School of Business, the College of Education and Human Services and the psychology department, along with a center for public service. The six-story building includes more than 30 teaching rooms, including an auditorium
that seats 390, where the Tyco chief delivered a lecture in 2001 on the importance of integrity.

Kozlowski also donated an athletic center to Berwick Academy in South Berwick, Maine, where his daughter attended prep school. The 214-year-old academy voted to remove his name from the building two years ago, says Richard Ridgway, the school's head.

Catholic Mission

While Seton Hall hasn't yet said what it will do with Kozlowski's name, the university has no plans to remove former Tyco board member Walsh's name from the library, spokesman White says.

Walsh, 64, resigned as chairman of Seton Hall's board of regents in December 2002, the same month he agreed to pay $22.5 million to settle criminal and civil charges in connection with Tyco's acquisition of CIT Group Inc., a New York-based financial services company.

Walsh remained co-chairman of the school's $150 million capital fundraising campaign before stepping down for personal reasons last year, spokeswoman Memory says.

Before he resigned, a March 2004 editorial in the campus newspaper, the Setonian, criticized the school, where ethics instruction is required for all students.

``Everyone knows that if the university really were moving to strengthen its Catholic mission and the call for ethical and servant leaders, Frank Walsh's name would be nowhere near the campaign plan,'' then-Setonian Editor Matthew McCue wrote in an editorial.

Memory says Walsh's involvement with the campaign was based on the totality of his life, work and contribution to the school.

`Full Responsibility'

``Mr. Walsh accepted full responsibility for his actions,'' she says. ``The value of reconciliation is central to Catholic teachings, and it was in this spirit that he was involved in the campaign before stepping down.''

Walsh's spokesman, Gregory Miller, said Walsh would have no comment. Seton Hall's president, Monsignor Robert Sheeran, declined to comment.

At St. Bonaventure University, a Franciscan school of 2,220 about 60 miles (97 kilometers) southeast of Buffalo, New York, the Rigas name adorns the Rigas Family Theater.

On June 20, John Rigas, 80, the founder of Adelphia Communications Corp.and a former St. Bonaventure trustee, was sentenced to 15 years in prison for stealing from the Greenwood Village, Colorado-based cable company and lying about its finances.

U.S. District Judge Leonard Sand sentenced Rigas's son, Timothy, Adelphia's ex-finance chief, to 20 years in prison after his conviction with his father on conspiracy, bank fraud and securities fraud charges.

`Private ATM'

The Rigas family used Adelphia as their ``private ATM'' to provide $50 million in cash advances, buy $1.6 billion in securities and repay $252 million in margin loans, prosecutors said during the trial. Prosecutors also said the Rigas family authorized $200,000 in donations by Adelphia to St. Bonaventure without telling shareholders.

St. Bonaventure conferred an honorary degree on John Rigas in 1996.

Board of Trustees chairman John McGinley Jr., 61, says the board hasn't yet discussed the naming issue and may wait until the outcome of any appeals.

Basketball Court

``The Rigas family is a large family, and we do not want to adversely affect people who may be innocent,'' he says. ``We don't want to get caught up in something that deprives those family members who may be without any taint.''

Even so, McGinley says the topic will come up: ``You just created an agenda for my September board meeting.''

Saint Bonaventure spokesperson Suzanne English said the university won't comment on the Rigases.

Thomas Schaeper, a history professor at the university, says the university removed the name `` Adelphia Court'' from the gymnasium where the basketball team plays, after the scandal surfaced.

Yet Schaeper says he isn't bothered by keeping the Rigas name on the theater and hasn't heard faculty express strong opinions.

``If every university in the country wanted to remove from buildings on campus the names of benefactors who later were found guilty of crimes or who in other ways earned unsavory reputations, I would hate to think of how many buildings would have to be renamed,'' Schaeper says.

Faculty Protest

A faculty letter-writing protest in 2002 at the University of Missouri in Columbia failed to force a name change for the $1.1 million Kenneth L. Lay chair in economics. The chair remains unfilled, says Christian Basi, a university spokesman.

Lay, 63, the former chief executive of Enron Corp. who received bachelor's and master's degrees in economics from the university, faces trial in January. He's charged with fraud and conspiracy in connection with what prosecutors say were off-the-books partnerships that let
Enron artificially boost revenue and mislead investors before the company filed for bankruptcy in December 2001. Lay has pleaded not guilty to the charges.

``Positions of this nature typically take a long time to fill,'' Basi says.

Mississippi College never named a building after Bernard Ebbers, the former chairman of WorldCom Inc. and a 1967 graduate, although the Baptist school did accept $45 million from him in the years before the company collapsed in the biggest corporate bankruptcy in U.S. history in July 2002.

Biggest Fraud

Ebbers, 63, sentenced on July 13 to 25 years in prison for engineering the largest accounting fraud ever in the U.S. at WorldCom, once sat on the school's board of regents. He also headed an $80 million, five-year fundraising drive that surpassed $57.6 million in the first year,
according to a 1997 alumni- magazine article on the Clinton, Mississippi, college's Web site.

Alice Smith, a college spokeswoman, declined to comment on Ebbers.

Brad Agle, 43, director of the ethics center at the Katz Graduate School of Business at the University of Pittsburgh, says schools must develop consistent policies on donations.

``Most schools don't want to develop a policy and criteria for accepting money because it constrains you, and then they might not be able to accept the money,'' Agle says.

Harvey Dale, director of the National Center on Philanthropy and the Law at New York University, says that over the years thousands of schools, hospitals and other nonprofit organizations have received gifts from convicted felons, robber barons and disgraced politicians.

Dale says crafting agreements about what to do with names from donors may be a simplistic idea.

``There are an awful lot of people who have given money who aren't lovely,'' Dale says. ``There is a famous quote: `The problem with tainted money, is, 'taint enough of it.'''

To contact the reporter on this story:
Liz Willen in New York at ewillen@bloomberg.net

Last Updated: July 20, 2005 00:08 EDT