An interview with President Tilghman on the Robertson case

On Dec. 12, 2008, a N.J. Superior Court judge approved a settlement in the case of Robertson v. Princeton, a lawsuit filed 6 ½ years earlier by members of the Robertson family. The suit challenged the spending of funds by a foundation created in 1961 to oversee a $35 million gift by A&P heiress Marie Robertson, to support the graduate program of the Woodrow Wilson School. The week after the settlement was approved, President Tilghman sat down with PAW to discuss the case.

How do you feel about the resolution of the case?

I’m enormously pleased with the resolution of the case. I’m enormously pleased to have it behind us, particularly at a time when the challenges facing Princeton, along with the rest of higher education, are the greatest that we’ve seen since probably the Depression. So this gives all of the senior leadership at the University the opportunity to focus on what is most important to us right now, which is ensuring that the University is strong and vital coming out of this economic downturn. But I would also say that I am enormously pleased that we achieved our primary goal in fighting this lawsuit that was filed against the University, and that is to preserve the right of the University to pursue the education of men and women for public and international service in the way that we believe that it should be done and has been done over the last 75-plus years.  

It was not an insignificant cost to come to that conclusion: $40 million to be paid for the Robertsons’ legal fees, and $50 million plus interest to be paid to their new foundation.

It’s actually less than that, because if you look at the structure of the settlement, we do not begin to pay into the new foundation until the third year, and that continues for nine years. So if you net present value, that $50 million is significantly less than $50 million.  

In today’s dollars?  

In today’s dollars.

It’s still not a small amount of money.  

It’s a great deal of money.

Does that give you pause?

Let me say that the University was prepared to settle this case on many occasions during the last 6 1/2 years. And had the other side been willing to agree to the terms that we ultimately settled on much earlier, we would have been able to save a great deal of money that ended up going toward legal fees. But the terms that the other side proposed during these 6 1/2 years were so outlandish and so out of proportion that we had no recourse but to continue defending the University, until finally their demands came down to what we were prepared to spend in order to have the vast majority of the endowment of the Robertson Foundation to come to the University as a restricted gift over which the descendants of the original donor would have no longer any say.  

How quickly did things come together at the end?

I think what led to the final agreement was the intercession of a lawyer outside the current litigation – the Robertson family, we believe, engaged Milbank Tweed to essentially lead their side of the negotiations. And in David Gelfand [a partner with Milbank Tweed] we had someone who could negotiate with us dispassionately. … It took about a month.

Where were you when the word came that the deal was done?  

It actually happened in what we call a Monday-morning meeting. We have these meetings of the senior leadership of the University on the administrative side meet with me every Monday morning, and Pete McDonough [the University’s general counsel] is a member of that group. He got a telephone call; he left the room; he came back and said, we have a deal. So it was quite dramatic. … It was fair to say this was the first time we’ve had applause at our Monday-morning meeting.

That was certainly the point where we knew we had a firm deal. In these kinds of negotiations it builds to a crescendo in that every back and forth leads to a stronger likelihood that you’re going to get a deal at the end, but that was the real signoff.

Did it become apparent early in the case that this was a case of irreconcilable differences?

No, I don’t think it was clear early on in the process. As the litigation dragged on, and as a consequence the relationship between the University and the Robertson family became more and more difficult, it became clear to everyone that some kind of a divorce was going to be in the best interest of the University certainly, but I believe that the Robertsons also believed that that was the only outcome that they would accept.  

You told The Daily Princetonian that you had come to the conclusion that the foundation was no longer supporting the educational goals of the Wilson School. What did you mean by that?

Well, the foundation board was completely dysfunctional. Our meetings were held with a mass of lawyers around the table; every word was taken down by a court stenographer; almost every vote taken during the 6 1/2 years of this litigation were 4-3 votes with the University trustees voting in favor and the Robertson trustees voting against, including proposals that went to the heart of the educational mission of the Woodrow Wilson School and that had the very strong support of the dean of the school, Anne-Marie Slaughter [’80]. This was untenable.

What is your reaction to the recent positive statements by Bill Robertson about some of the programs begun by Anne-Marie Slaughter?  

I am very pleased that they are finally able to publicly recognize the extraordinary work that Anne-Marie Slaughter has done at the Woodrow Wilson School in the time that she has been dean. I could not be more pleased that finally there is some public recognition of her accomplishments.  

You’ve said that the University plans to further enhance programs at the Wilson School. Can you give any specifics?  

Let me give you an example of the kind of opportunity that now exists at the Woodrow Wilson School but that would have been very difficult to achieve – not impossible, but very difficult to achieve – had we still had the Robertson Foundation in place. One of the most important public-policy issues facing not just this country but the world is global warming. And we have a very strong group within the Woodrow Wilson School of scholars who are largely scientists who are interested in energy policy, environmental policy, climate-change policy, and for them to be really effective, they are going to want to collaborate with engineers in the Andlinger Center and with scientists in PEI. And those collaborations would have been very difficult to get through the Robertson Foundation, because the argument would have been it has nothing to do with training foreign-service officers. And yet, our view, this is a global issue, and it is an issue that every public-policy school should be working on in collaboration with scientists and engineers. So I think you will see an expansion of those programs now in a way that would have been very difficult for us to do with the Robertson family defining the mission of the school so narrowly.  

What have you heard in terms of reaction to the settlement, especially from alumni?

The reaction of our alumni has been congratulatory, both in e-mails and in letters and when I’ve seen individuals in the last few days. The overwhelming reaction has been to congratulate the University for settling the suit in such a positive way that frees the Woodrow Wilson School to continue to do what it has done in the past. I think the only regret I hear is the regret that you began with, which is we are paying a price for this victory, in particular in the amount of dollars from the foundation that have ended up in lawyers’ pockets.   It’s regretful, but I have to say, as I look back on this, I cannot see that the University had any choice but to defend the Woodrow Wilson School in the way it did – aggressively, and with the conviction that the Woodrow Wilson School is one of the jewels in the Princeton crown.  

Are there any lessons to be learned about the way the foundation was structured?  

I think one of the major lessons is that the structure that Charles Robertson [’26] and [former president] Bob Goheen [’40 *48] devised for this gift is one that is flawed, and the University is unlikely to embark on another one of these in the future. Here’s the flaw: I think the foundation works exceedingly well as long as the original donor is alive and can sit at the table and can express his intent clearly. And if you go back in the record, this is precisely what Charles Robertson did for the years that he was alive after the foundation was created. The problem arose when Charles Robertson died, and his son became the major representative of the family on the foundation and began to reinterpret what his father’s intent was, and to reinterpret the nature of the discussions that happened between Bob Goheen and Charles Robertson. And because the foundation’s structure gave him standing to sue, we were extremely vulnerable to someone essentially reinventing history.  

Looking back over the history of this case, is there something the University could have done differently that might have made a difference?

I think the only thing the University could have done to avoid this suit would have been to continue the past practice of investing the Robertson Foundation endowment the way it had been done over the years with a volunteer committee. This would have been against the strong recommendation of the two most important people on that investment committee, Jay Sherrerd [’52] and John Beck [’53], and I think one could argue it would have made the University vulnerable to a charge of fiscal irresponsibility. And all you have to do is look at what has happened to the value of the stock market, both on the up years after Princo began investing the endowment, and in this downturn, to see that the foundation’s resources were enhanced in the up years and have been protected in the down years by very prudent professional management. So I could have been sitting here today with a very much smaller endowment for the Robertson Foundation, and I think I could have been rightly criticized for having taken no steps to protect the endowment from the volatility on both the up side and the down side of the markets.

After the settlement, one commentator wrote: “Princeton blinked.” Is there something to that assessment?  

I think Princeton did not blink. I think the Robertson family blinked, and I think they blinked because they ran out of money. And of course they didn’t run out of their own money; they ran out of the money of the Banbury Fund. And had that not happened, we would still be in litigation today, of that I am sure.

There has been a legal side to this case, and a public-relations side. How do you think the University fared on the public-relations side?  

I think it depends upon who the audience is. One of the things that I have been most struck by as I’ve read commentary about the suit – not just in its resolution but over the years – is that the more knowledgeable you are, about the suit and about issues surrounding philanthropy, the more positive the coverage was for the University … The second thing I have been struck by over the years is how little interest this suit has engendered among our alumni. I spend a lot of time with alumni on the road all over the country, in fact all over the world, and this case rarely came up in my conversations with them. Where the Robertsons were most effective in presenting the University in a negative light is in a subset of the press, where they were able to place a lot of op-ed articles, but those had remarkably little effect on the alumni. I think the evidence for that is what has happened to giving at Princeton during this suit, where the rate of giving has gone up and the absolute dollars have gone up.  

How much time have you spent on this case over the last 6 1/2 years?

There have been periods where I have been spending 10 percent of my time in concentrated periods on this – maybe even more than 10 percent in a time when things were very, very active. And then there have been months where I haven’t thought about it or had to really deal with it at all. So it’s been highly variable. But I will say that the burden for this case at Princeton fell on a lot of shoulders, most significantly on Anne-Marie Slaughter’s shoulders. As the dean of the school, she could not make a single decision or a single statement that wasn’t going to be viewed in light of the litigation. They were in a scorched-earth discovery process for many years, which meant literally every pronouncement, every e-mail, every piece of paper was being scoured by the other side for the litigation, and this put an enormous burden on Anne-Marie and on her faculty and on her staff. I think the other individuals for whom this really fell as an enormous burden were Steve Oxman [’67] and Peter Wendell [’72], two defendants along with me in the case, trustees with day jobs who spent an inordinate amount of time on this case completely pro bono, with no reward whatsoever except the reward of defending the University.

And a great unsung hero is Dick Scribner, Class of 1958. Midway through the litigation I asked him to be the secretary-treasurer pro bono of the Robertson Foundation, and I asked him because he is a man of immense character and integrity. I was asking him to walk this extraordinarily fine line between the two sides and to be completely nonpartisan, and very few people would have had the ability to execute that well. And Dick did it brilliantly, just brilliantly. And for his service he was rewarded by the Robertsons with horrible accusations about his character that made me weep. He was at the center of the storm in that he had to adjudicate all these board meetings; he had to sign off on the books of the Robertson Foundation, which as you can imagine were in contention; and he did this with such grace and dignity and in a truly nonpartisan way. This University will never be able to repay Dick Scribner, in my view.

Are there any other points about this case you would like to make?

The message that I really want to convey is that the Woodrow Wilson School is one of the finest schools of public and international affairs in the world, and I firmly believe that if Charles and Marie Robertson were alive today, they would take immense pride in what the school is doing, and they would consider Anne-Marie Slaughter their dream dean.

– Interview conducted and condensed by W. Raymond Ollwerther ’71