U-Va.: A donor in the crisis
By Donna St. George,
Helen Dragas was under fire. As rector of the governing board at the University of Virginia, she had led a secretive effort to force the resignation of the institution’s popular president. By mid-June, the Charlottesville campus was demanding answers.
Then a lonely voice of support emerged, saying it was time for a revolution.
Paul Tudor Jones II, a billionaire hedge fund titan and U-Va. alumnus, had been acquainted with Dragas for about a month, according to associates of Jones’s who spoke on the condition that they not be named. She had called him in May to ask if he wanted to join U-Va.’s Board of Visitors. He declined, but he urged a focus on strategic planning.
President Teresa Sullivan’s “departure is a clarion call from the Board of Visitors that business as usual is not acceptable anymore,” Jones wrote in the June 17 edition of the Daily Progress of Charlottesville, one week after the announcement that Sullivan would be leaving. He asked: “Why be good when there is outstanding to be had?”
The commentary turned heads. It was not just at odds with a rising fury about what was seen as the board’s lack of openness and candor. It also came days after a widely circulated e-mail showed that powerful alumni knew about the move against Sullivan weeks before the rest of the world.
Sullivan was reinstated June 26, but many in Charlottesville were left believing that influential donors had a hidden hand in the turmoil. With his op-ed, Jones, a Wall Street superstar who famously predicted the stock market’s 1987 collapse, became a lightning rod for suspicion.
Few others had publicly cheered the board on.
Jones, 57, who rarely speaks to reporters, declined an interview, but new details of his role have emerged from those who know him. Many did not have authorization to speak for attribution. Still, the details fill in more of the picture and point to the complexity and tension of relations between governing boards and big-money donors.
These associates say that Jones did not orchestrate the removal of the president, contrary to what many in Charlottesville believed. He was told in advance about a possible leadership change, but he was not asked for his opinion.
Later, amid the uproar, Jones weighed in because he supported the power of boards to make such decisions and the long history of board governance at U-Va., according to Jones’s associates. He saw board members as volunteers acting in good faith and was dismayed that the board was being vilified.
In Jones’s view, too, U-Va. needed “stakeholder-driven” strategic planning and a transformative change in attitude and vision to better position the school to compete aggressively with the Yales, Stanfords and MITs of the world.
What Jones did not realize as he wrote the piece, however, was that the full Board of Visitors had not met to discuss the president’s removal or taken a roll-call vote on the matter before she was asked to resign.
Jones, who lives in Connecticut, where his hedge fund firm is based, has acknowledged to associates that he should have known the process was flawed before he wrote the piece. Had he known, he would not have written it.
The relationship between Jones and Dragas goes back to the second half of May, when she phoned him, associates said, to determine his interest in a seat on the board. Jones was a 1976 graduate of U-Va. and one of the university’s most generous donors.
But he was stretched thin.
He sat on the boards of the Everglades Foundation, the Fish and Wildlife Foundation, the anti-poverty Robin Hood Foundation and StudentsFirstNY, the education reform group whose founders include former D.C. schools chancellor Michelle A. Rhee. He presided over the company he founded, Tudor Investment Corp., with $11 billion under management. He served on the executive committee of U-Va.’s $3 billion fundraising campaign.
In a statement Saturday, Dragas explained her interest.
“I spoke with Mr. Jones about potential nomination for volunteer service on the Board of Visitors,” she wrote. “His belief in the power of excellence in education to transform lives has been the guiding compass of his civic life, and mirrors the Board’s own aspirations for U-Va.”
She added: “Regarding the op-ed piece he wrote, I do not recall the origin of the idea — he may have suggested it, or I may have in a response to an offer to assist in sustaining high standards of excellence at U-Va.”
In his piece, Jones invoked the spirit of Thomas Jefferson and talked about the messiness of change. He cited a favorite quotation by John Keats: “I would sooner fail than not be among the greatest.”
In its theme, the op-ed was classic Jones — driving hard to hit the high mark. But in an important way, it was a departure. Jones had made his fortune partly by understanding the psychology of other traders and the forces at work in critical moments.
This time, his read of unfolding events was not as accurate.
Hedge fund wizard
Jones grew rich in the Wall Street of the 1980s. He was a colorful, hard-charging whiz kid from Memphis who at one point, for important trades, donned shoes once worn by Bruce Willis; he created so much lore and profit that he became the subject of a documentary titled “Trader.”
In Sebastian Mallaby’s 2010 hedge fund history, “More Money than God,” a chapter devoted to Jones captures his youthful flamboyance. “He changed the shape of the hedge-fund business,” says Mallaby, a former columnist and editorial writer for The Washington Post.
With such wealth, Jones has lived large — with a waterfront mansion in Greenwich, Conn., known for its elaborate Christmas light shows, and a sprawling hunting retreat on the Chesapeake Bay in Maryland, which locals say includes three islands shaped like his initials: PTJ. He bought a vacation home in the Florida Keys, and he created an ecotourism destination in the Serengeti in Tanzania. Forbes magazine estimates his net worth at $3.4 billion and ranks Jones 107th among the 400 richest people in America.
He has pursued philanthropy, too, on a grand scale. He took on 86 sixth-graders in Brooklyn’s Bedford Stuyvesant neighborhood, funding trips and activities and college scholarships. He started the nation’s first all-boys charter school. He founded the Robin Hood Foundation, which has tapped the wealth of Wall Street to fund poverty-fighting efforts and has raised $1.1 billion since 1988. Noted for melding investment principles with philanthropy, Robin Hood is New York City’s largest private funder of job-training programs, emergency food services and homeless shelters.
As a donor to U-Va., Jones has supported an array of initiatives. He ranks as one of the school’s top five all-time donors, officials said. His best-known gift to U-Va. was $35 million toward construction of the John Paul Jones Arena, a basketball and special-events facility named for his father, who graduated from the university’s law school.
In all, Jones has given more than $100 million — to prestigious Jefferson Scholarships, endowed professorships and environmental sciences and conservation projects. He once talked about appreciating U-Va. for a balanced education — not just academics but the experience in ethics and character-building. He was a top welterweight boxer as a student and received a degree in economics.
“He was very clear that he very much valued the time he spent here as an undergraduate,” said James H. Wright, president of the Jefferson Scholars Foundation, of which Jones was the first substantial benefactor. He remains the largest, Wright said. “He is passionate about education. . . and wants U-Va. to be the best of the best.”
Shortly before the June crisis, Jones and his wife, Sonia, announced their latest project: a $15 million Center for Contemplative Sciences. That effort started with the couple’s voicing an interest in yoga. Sullivan developed the idea, convening professors from varied disciplines — medicine, nursing, education, religious studies — to explore broader academic possibilities.
There were whispers of skepticism among some faculty members, but David Germano, a Buddhist studies professor who will help lead the effort, said that in 20 years at the university, he had never before heard as much enthusiasm. “It was a very positive response,” he said.
A campus in chaos
In June, as the campus was thrown into chaos, Jones was drawn into the spotlight again.
There was already a wave of outrage about an e-mail suggesting that donors had early knowledge of plans for Sullivan’s removal — a message sent by Peter D. Kiernan, a former Goldman Sachs partner who was chairman of a foundation that supports U-Va.’s Darden School of Business.
In the June 10 e-mail, Kiernan wrote that he had been contacted by “two important Virginia alums about working with Helen Dragas on this project, particularly from the standpoint of the search process and the strategic dynamism effort. It pained me to keep this information from you . . . but I was sworn to keep the process confidential.”
Then came Jones’s op-ed.
Jones cited what he called “alarming facts” about U-Va.’s declining national ranking and weaker-than-the-Ivies admissions profile. The broadside put the university in the delicate position of rebutting him. His comments, “however well-intended, were misleading,” wrote Greg Roberts, undergraduate admissions dean, in a subsequent op-ed.
Theories about backroom maneuvering abounded. A Charlottesville weekly, the Hook, wrote about the power of donors. In Connecticut, a newspaper headline asked: “Did Greenwich tycoons take down a major university president?”
Both Kiernan and Jones, who are friends, live in Greenwich.
“We were distressed because it looked like somebody who wasn’t on the board was calling the shots,” politics professor David Leblang recalled.
Beth Meyer, an associate professor of architecture, said the confluence of the e-mail and the op-ed piece “made a lot of people think their suspicions about the process were credible.”
But Robert D. Sweeney, U-Va.’s senior vice president for development and public affairs, said he is convinced that Jones had no role in the ouster. Sweeney has known Jones for more than 20 years.
The op-ed, he said, was written when Jones believed that a decision had been made and that he could rally the troops to see it as an opportunity. “It was kind of a rallying call for, ‘Let’s be the best we can be,’ ” Sweeney said.
“I truly believe that Paul Jones had no involvement in the forced resignation of the president,” he said.
Reached by phone, Kiernan said he had “absolutely no role” in the decision to dismiss Sullivan. Kiernan resigned from the Darden School board.
New details from Jones associates and others suggest a complex sequence. Jones offered Kiernan’s name to Dragas as a candidate for a Board of Visitors position when Jones opted out.Then, Dragas called Kiernan to discuss a potential board appointment or role in strategic planning, according to people familiar with the conversation.
In a statement July 16, Dragas wrote: “Mr. Jones did not influence board decisions regarding President Sullivan. He has been a generous and steadfast friend to U-Va., and I hope he chooses to support President Sullivan’s initiatives in advancing the University as we move forward together.”
She has also said that Kiernan had no role in the move to oust Sullivan.
Interested in the board’s structure, Jones called Virginia Gov. Robert F. McDonnell (R) to suggest that he enlarge the Board of Visitors to deepen its higher education expertise. Jones’s idea: Add four members with such backgrounds, chosen by the existing board.
McDonnell declined to comment on his relationship with Jones or the conversation, said the governor’s spokesman, Tucker Martin. Jones gave $100,000 to McDonnell’s 2009 campaign.
Many people have called on the governor to make changes in the board’s governance structure. His office is reviewing the matter. In recent university board appointments statewide, McDonnell has boosted the number of educators.
In the aftermath, Jones phoned Sullivan to talk about what happened. He told her that he regretted the op-ed piece and that he supports her, associates said. He also has expressed support for Dragas.
Sullivan, for her part, has emphasized reconciliation. She has called many donors, assuring them that the university would tackle its challenges: financial stability, online learning, faculty compensation.
“There’s no question in my mind,” Sweeney said, “that he supports her presidency and has trust in her leadership to make the kind of bold change that is needed to transform the University of Virginia.”
Daniel de Vise, Jenna Johnson and Anita Kumar contributed to this report.