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A Report On Harvard's Enron Entanglements




(Summary and Recommendations)


January 31, 2002


HarvardWatch is a broad-based coalition of students and alumni across the University’s schools concerned with corporate governance at Harvard. The independent and unaffiliated organization advocates a more transparent and accountable administration responsive to the concerns of Harvard students, alumni, and staff. HarvardWatch publicizes information about the nature of Harvard’s governance system and investments in an effort to improve the functioning of the University; members of HarvardWatch want the University to be the best it can be. The opaque, unelected seven-member Harvard Corporation is the University’s highest governing body, and does not release their meeting times, places, agendas, or notes; moreover, there is no process to appeal Corporation decisions, and the Corporation refuses to meet with members of the Harvard community to explain its decisions or its decision-making process. HarvardWatch believes that reform is urgently needed and is overwhelmingly in the best interests of all of Harvard University.



- Herbert “Pug” Winokur is a member of the Harvard Corporation, the university’s seven-member self-selecting governing body, and a longtime member of the Board of Directors at Enron Corporation. He is currently the chair of the board’s Finance Committee. In this capacity Winokur reportedly approved the creation of more than 3,000 partnerships and subsidiaries which were allegedly used by Enron to hide debt and avoid taxation. Winokur’s position on the board’s Finance Committee gave him unique access to Enron’s financial structure and should have alerted him to the company’s imminent collapse.

- During the period in which Enron executives touted the company’s stock to employees, Harvard’s main private investment fund ¡X Highfields Capital ¡Xshortsold several million shares of Enron stock for an estimated profit of $50 million. Mr. Winokur’s leadership positions at Enron and Harvard raise questions regarding Highfields' massive short-selling transactions, which benefited the Harvard endowment. There has been insufficient investigation into the possibility that Highfields operated with inside information when it short-sold millions of Enron shares.

- Highfields Capital manages an estimated $2 billion of Harvard’s endowment. Jonothan Jacobson, the co-founder of Highfields Capital, previously worked under Mr. Winokur’s directorship at Harvard Management Company. Highfields Capital was founded with $500 million of Harvard’s endowment.


- Through financial incentives and personal connections, Enron influenced Harvard’s research agenda. Harvard’s academic resources were consistently used to support Enron’s unsustainable business plan.

- Robert Belfer, a director of Enron and the largest individual shareholder of the company’s stock, is a major donor to Harvard, and served on the Committee on University Resources (COUR) for 9 years and on the Visiting Committee at the Kennedy School of Government (KSG). He re-endowed the Kennedy School’s Belfer Center, previously called the Center for Science and International Affairs.

- Enron and board members including Winokur and Belfer have contributed millions of dollars to Harvard and have aided in the creation and funding of research centers, which have consistently advocated an agenda of deregulation in the energy industry. The research produced at Harvard’s Kennedy School of Government by the Harvard Electric Policy Group (HEPG), the Environment and Natural Resources Program (ENRP), and the Belfer Center exemplify Enron’s influence over Harvard’s research agenda.

- These centers have collaborated with Enron and its consultants and have defended the company and other energy industry monoliths against assertions of price manipulation and other illegal activities. Academic rationales for deregulation produced at Harvard were essential cover for the short-lived success of the Enron business model.

- Enron has cultivated deep relationships with the Harvard Business School (HBS). Five HBS case studies have touted the Enron model as innovative and worthy of replication. Glowing studies of Enron were produced by HBS as recently as August of 2001, just before the company imploded.

- HBS professors have received compensation for services provided to Enron. Professors have also co-authored major works on Enron with senior company executives.

- Herbert Winokur, a director of both Enron and Harvard, has also funded several reports recommending privatization of defense services. Winokur is a leading investor in Dyncorp, a major defense contractor. The Herbert Winokur Fund at the KSG provides another example of how Winokur influenced Harvard’s research agenda for corporate and personal enrichment.

- Mr. Winokur’s relationship to Dyncorp has raised concerns among those investigating Enron, since Dyncorp manages e-mail and information systems for many of the leading investigative agencies, including the Department of Justice and the Federal Bureau of Investigation.


1. Harvard University should initiate a credible investigation into alleged financial improprieties regarding the management of the university’s endowment. The investigation should be undertaken by a representative body that has the confidence of the entire Harvard community

2. Pending the outcome of the investigation, Herbert Winokur should be suspended effective immediately from the Harvard Corporation. Harvard University must send a strong and unequivocal signal to the academic community by distancing itself from the failed leadership at Enron Corporation.

3. Harvard University should initiate a comprehensive re-evaluation of corporate funding that threatens its academic integrity and independence. The acceptance of a narrow research agenda and tilt imposed by corporate donors such as Enron today poses a formidable threat to its academic mission.

4. As part of its investigation, Harvard University should immediately disclose information on its ties to the Enron Corporation over the past 10 years. This includes, but is not limited to:

- Funding from the Enron Corporation, its executives, and its directors to Harvard University. This includes direct contributions to Harvard as well as any of its schools and centers, including the Harvard Electric Policy Group, the Belfer Center and the Harvard Business School.

- Provision of consulting services by researchers at Harvard University and its various Centers to Enron Corporation¡Xincluding the nature of such services and the compensation paid by Enron.

- A list of all financial transactions conducted by Harvard Management, its subsidiaries, and Highfields Capital involving Enron or any of its partnerships.

- Disclosure of any Harvard investments in private companies, partnerships or special purpose entities affiliated with Herbert Winokur.

- A full account of any contact or communication between fund managers at Harvard Management and its officers and Highfields Capital regarding Enron or its subsidiaries.

- A full account of contact or communication between officers of Harvard Management Company or Highfields Capital and Enron executives and officers.

- Disclosure of the participation of Enron executives and board members at sessions at HEPG and the ENRP.

5. Harvard University should outline a participatory process for selection of Harvard

Corporation members. This should involve all stakeholders¡Xfaculty, workers, and students.


Relevant Biographical Information

Robert Belfer

Harvard affiliation: JD, Harvard; Patron of Harvard’s Belfer Center for International and Strategic Affairs; Harvard Committee on University Resources (1982-1989); Member of Visiting Board of Harvard’s John F. Kennedy School of Government

Enron affiliation: Enron’s largest stockholder, Enron Director since 1985

Sanjay Bhatnagar Harvard affiliation: MBA, Harvard

Enron affiliation: CEO of Enron India

Peter Fisher Harvard affiliation: JD, Harvard

Enron affiliation: Undesecretary of the Treasury; implicated in Enron scandal Citgroup Chairman Robert Rubin (see below) called Mr. Fisher to inquire about the possibility of Federal intervention in support of Enron. The New York Times reports: It was Fisher’s role as the administration's liaison to the markets that led Robert E. Rubin, the former Treasury secretary who is now chairman of the executive committee at Citigroup, one of Enron's two main lenders, to call him about the situation. It also made Mr. Fisher a natural point of contact for Enron itself. Whether simply to keep the government informed of financial problems at the dominant player in the burgeoning business of trading energy, as Enron says it was doing, or seeking assistance as it fought to survive, as the administration has suggested twice in recent days was the case, Mr. Fisher was clearly the go-to guy. In a government filing, Fisher recently disclosed that he owns at least 10,000 shares of Enron stock.

Pankaj Ghemawat

Harvard affiliation: Professor, Harvard Business School; MBA, Harvard

Enron affiliation: Member, Enron advisory council

William Hogan

Harvard affiliation: Professor, Kennedy School of Government; Director, Harvard Electric Policy Group (HEPG)

Enron affiliation: HEPG receives Enron funding

Jonathon Jacobson

Harvard affiliation: AB, MBA, Harvard; currently manages in excess of $2 billion of Harvard’s endowment through Highfields Capital

Enron affiliation: Highfields Capital, and Harvard in-turn, short-sold nearly 3 million Enron shares just prior to the collapse of the stock

Lawrence Lindsey

Harvard affiliation: MA and Ph.D, Harvard; former Harvard faculty, Department of Economics

Enron affiliation: Chief White House economist; Enron advisory board; Citigroup consultant Lindsey’s proximity to the president place him at the center of inquiry regarding Enron’s relationship to the White House before and after the company’s collapse. The New York Times reports, “Before he became the president's top economic counselor, Lawrence B. Lindsey was a paid adviser to Enron.” Lindsey’s position at Enron and consulting for Citigroup, Enron’s banker, will continue to raise questions about the White House’s relationship to the Enron scandal.

Rebecca Mark

Harvard affiliation: MBA, Harvard

Enron affiliation: Former Chairman of Enron International, Former CEO of Enron subsidiary Azurix Once lauded by the business press, Mark took the fall for Enron’s failed effort to privatize the world’s water supply through its Azurix subsidiary. Ms. Mark is named as a defendant in the most prominent lawsuit against Enron. She executed insider trades of 1.4 million shares, pocketing $79.4 million before the company collapsed.

John Mendelsohn

Harvard affiliation: AB, MD, Harvard

Enron affiliation: Enron Director The New York Times reports, “Also on the board is Dr. John Mendelsohn, president of the M. D. Anderson Cancer Center, one of Houston's most prestigious institutions. Enron has donated more than $600,000 to the center in the last five years.” Mr. Mendelsohn’s ability to serve as a director while receiving large donations from the company has been questioned.

Paulo V. Ferraz Pereira

Harvard affiliation: MBA, Harvard

Enron affiliation: Enron director; Former President and CEO, State Bank of Rio de Janeiro, Brazil

William C. Powers, Jr.

Harvard affiliation: JD, Harvard

Enron affiliation: Enron director

Robert Rubin

Harvard affiliation: AB, Harvard, 1966; Honorary Doctorate, 2001; former Director, Harvard Management Company;

Enron affiliation: Chairman of the Board, Citigroup (Enron’s largest creditor)

John M. Seidl

Harvard affiliation: MPP and Ph.D, Harvard

Enron affiliation: Former Enron COO and director

Marc Shapiro

Harvard affiliation: AB, Harvard

Enron affiliation: Vice Chairman, Chase Manhattan Bank (major Enron creditor) In recent profiles, both the New York Times and the Wall Street Journal have focused on Shapiro’s awkward position as Chase’s conduit with Enron, its major creditor.

Jeffrey Skilling

Harvard affiliation: MBA, Harvard

Enron affiliation: Former Enron CEO; former Enron Director Perhaps the pivotal figure in the Enron scandal, Skilling is considered the architect of Enron’s high-risk trading system. The New York Times reports that Skilling, “received $66.9 million for 1.1 million shares. Beginning in December 2000, Mr. Skilling began to sell his holdings at a pace of 10,000 shares about every seven days. He still owns about 600,000 shares and options, according to public filings.” While at McKinsey in the 1980s, Skilling reported to Harvard Corporation member and Harvard Treasurer D. Ronald Daniel.

John B. Wing

Harvard affiliation: MBA, Harvard

Enron affiliation: Former Chairman, Enron Power Group and Enron Cogeneration Co. (owner)

Herbert “Pug” Winokur

Harvard affiliation: A.B., Ph.D, Harvard; Member of Harvard Corporation; Director, Harvard Management Company

Enron affiliation: Enron Director since 1985; Chair, Enron Finance Committee; Former Chairman, Azurix Corporation (Enron subsidiary)

Robert B. Zoellick

Harvard affiliation: J.D., MPP, Harvard; former director and faculty member of Harvard’s Belfer Center

Enron affiliation: U.S. Trade Representative; Enron Advisory Board; board member of Alliance Capital, major Enron shareholder Zoellick sits precariously at the nexus of Harvard, the Bush White House and Enron. While at Harvard, Zoellick directed a pro-corporate energy research center funded by Enron’s largest shareholder.


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