Since being named president of Harvard University in 2001,
former U.S. Treasury secretary Lawrence Summers has sparked a
series of controversies that have grabbed headlines. Summers
incurred the wrath of African-Americans when he belittled the
work of controversial religion professor Cornel West (who left
for Princeton University); last year he infuriated faculty and
students alike when he seemed to disparage the innate
scientific abilities of women at a Massachusetts economic
conference, igniting a national uproar that nearly cost him his
job; last fall brought the departure of Jack Meyer, the head of
Harvard Management Co., which oversees the school's endowment
but had inflamed some in the community because of the
multimillion-dollar salaries it pays some of its managers.
Then, in quiet contrast, there is the case of economics
professor Andrei Shleifer, who in the mid-1990s led a Harvard
advisory program in Russia that collapsed in disgrace. In
August, after years of litigation, Harvard, Shleifer and others
agreed to pay at least $31 million to settle a lawsuit brought
by the U.S. government. Harvard had been charged with breach of
contract, Shleifer and an associate, Jonathan Hay, with
conspiracy to defraud the U.S. government.
Shleifer remains a faculty member in good standing.
Colleagues say that is because he is a close longtime friend
and collaborator of Summers.
In the following pages investigative journalist David
McClintick, a Harvard alumnus, chronicles Shleifer's role in
the university's Russia Project and how his friendship with
Summers has protected him from the consequences of that debacle
inside America's premier academic institution.
ff duty and in swimsuits, the mentor and his
protégé strolled the beach at Truro. For years,
with their families, they had summered together along this
stretch of Massachusetts' famed Cape Cod. Close personally and
professionally, the two friends confided in each other the most
private matters of family and finance. The topic of the day was
the former Soviet Union.
"You've got to be careful," the mentor, Lawrence Summers,
warned his protégé, Andrei Shleifer. "There's a
lot of corruption in Russia."
It was late August 1996, and Summers, 42, was deputy
secretary of the U.S. Treasury. Shleifer, 35, was a rising star
in the Harvard University economics department, just as Summers
had been 15 years earlier when he had first taken Shleifer
under his wing.
Summers' warning rose out of their pivotal roles in a
revolution of global consequence -- the attempt to bring the
Russian economy out from the ruins of communism into the
promise of Western-style capitalism. Summers, as Treasury's
second-in-command, was the architect of U.S. efforts to help
Russia. Shleifer's involvement was more intimate. Traveling
frequently to Moscow, he was directing key elements of the
reform effort under the banner of the renowned Harvard
Institute for International Development.