Nice work if you can get it
By John Sexton’s game is strong:
According to documents unearthed in a month-long search of public records, NYU Law School has created an array of nonprofits to funnel money into lavish perks for its professors. The money has been used by professors to buy multi-million dollar brownstones and condos in Manhattan and Brooklyn with portions of some loans forgiven over time. In some cases, even the interest charged on the loans has been reimbursed . . .
Ten days ago, the Dean of the NYU School of Law, Richard Revesz, who has served in that post since June 1, 2002, stepped down to head up the Marron Institute on Cities and the Urban Environment, a nonprofit made possible by a $40 million gift from Donald Marron, the former Chairman and CEO for two decades of the Wall Street firm, Paine Webber.
Revesz’ mortgage deals with NYU date all the way back to June 24, 1998 when the NYU School of Law Foundation bestowed on he and his partner, Vicki Been (also a law professor at NYU), a 46.5465 percent interest in a brownstone on West 11th Street in the West Village. The home had been purchased by the Foundation on October 16, 1995 at a cost of $1,450,000. With considerable improvements made by the Foundation, the fair value was placed at $2,664,000 on the date Revesz and Been acquired their interests. The Foundation sold the 46.5465 percent interest to the law professors for $1,240,000 and provided their full purchase price in two mortgage notes. On December 19, 2002, a little over six months after Revesz became Dean of the Law School, the Foundation transferred its 53.45 percent interest in the property to Revesz and Been.
According to documents on file with New York City, large amounts of the interest on the Revesz mortgage loans were not being paid but were, instead, allowed to accrue and be added to principal. On March 30, 2012, Revesz and Been entered a mortgage modification directly with NYU, not the Foundation. The document notes that as of March 30, 2012 there was a combined outstanding principal balance in the amount of $2,180,597 (including capitalized interest) and a second outstanding principal balance of $1,197,661. The deal was renegotiated to reduce the amount of interest and extend the maturity date on the larger balance.
According to NYU’s 2010 federal tax filing with the IRS (the most recent one made public), Revesz owed the University at that time a total of $5,683,652. It is not known what the amount in excess of the mortgage debt represents.
There’s much, much more in the same vein, including Sexton’s own sweetheart deal, which includes a $1.5 million annual salary package, and which pay him a $2.5 milllion “length of service bonus” in two years. If you’re worried about whether Sexton’s social security payments will cover the co-op fees, don’t: he will also be paid $800,000 per year for life after he retires. (It’s perhaps not purely coincidental that the faculty at NYU Law who are getting the big payoffs –Sexton was the law school’s dean for 14 years before becoming university president — are, like Sexton, closely connected to Wall Street’s regulatory structure, such as it is.)
Anyway, read the whole thing; once you’ve finished throwing up you can cleanse the palate with this amusing juxtaposition. I’ll have more to say about The Lawyer Bubble soon, but for the time being it’s worth noting that uber-Libertarian Richard Epstein (among other things he thinks most of the New Deal is unconstitutional) is now apparently triple-dipping in three federally tax-subsidized ponds: the University of Chicago, where he retains a faculty position, NYU Law School, where Revez paid Hayek only knows how much to reel in yet another prestigious hire, and the Hoover Institution, aka the Taj Mahal of well-heeled right-wing think tanks. No wonder he thinks everything’s just fine in Lawyerland.