Q&A: Former Princeton General Counsel on Cuts, DEI, Trump Effect

Peter McDonough has had a bird’s-eye view of the Trump administration’s funding freezes for several universities — both real and threatened — in his role as general counsel of the American Council on Education (ACE). Prior to joining ACE in 2015, McDonough served as Princeton’s general counsel from 2002-14.

PAW spoke with McDonough about President Donald Trump’s impact on higher education, what it means for Princeton, and how current issues compare with those he worked on while at Old Nassau.

We’re seeing Title VI of the Civil Rights Act being used more than ever before to target universities in lawsuits and to drive settlements. What’s your view of these actions?

I guess we could put it in context because objectively speaking one might say we’ve seen something like this from prior administrations, indeed prior Democratic administrations, relating to Title IX. Title IX, of course, relates to gender equality. And we had plenty of efforts during the Obama era and again during the Biden era.

Some would say they were efforts to strong-arm universities into settlements under the threat that if the settlements weren’t entered into with the Department of Education, there could be a referral to the Department of Justice, and the Department of Justice might or might not undertake action that could result in the future of some level of federal funding being reduced or withdrawn.

The difference between then and now is then — certainly at Princeton and probably at every other institution in America — there was a presumption that the rules of the road would be followed by the government. In other words, there wouldn’t be an actual stripping or reduction of federal funds without going through a process, without the Justice Department following the rules.

These days the threats are being made primarily, but not exclusively, in the area of Title VI without a level of confidence at institutions that the rules of road will apply or be respected. And the fact that we’re even talking about it is a crisis.

When you have unilateral threats from an executive branch ... you can’t have any reasonable planning because you can’t be comfortable about whether what you thought you would be receiving from the federal government will indeed be forthcoming. Colleges, including Princeton, need predictability in order to function.

We’ve seen several settlements in recent months, including at Columbia, Brown, and Penn. Should universities be fighting back in the courts if they believe cuts are politically motivated?

ACE has been around for 100 years, and we’ve never been a plaintiff on behalf of our members until this year. We have done that now multiple times in the area of research dollars where the executive branch literally late on a Friday announced it would cut research dollars that universities not only are entitled to under the law and under their agreements with the executive branch, but rely upon in order to pay their employees, to make sure the research continues unabated.

And we needed to step in and call out what was without a doubt unprecedented and illegal action by the executive branch. Each and every judge that has encountered these issues has agreed that the executive branch is proceeding in these cases outside the bounds of the rule of law.

These are very, very hard cases for individual institutions to contemplate bringing themselves. You and I can count on one hand and frankly on one finger the number of schools [doing that], and that’s Harvard.

Princeton has announced budget cuts over the next three years ranging from 5% to 10% due in part to the potential of federal funding cuts. How might these cuts impact the University?

The idea of doing something over three years and recognizing that there is logic to doing it is certainly something that … any sensible institution in this era of uncertainty would undertake at least as a consideration.

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For different reasons, 15 to 20 years ago we had various financial challenges in the country that affected higher education. Princeton made some cuts in that context that probably, if one looks back, served Princeton quite well. And so, looked at through another lens, these are responsible actions.

Princeton has been and remains better situated than most institutions to exalt principle over pragmatism. But at the end of the day, you need to be both principled and pragmatic.

Can you put the current concerns into perspective and compare it to anything that you faced during your time at Princeton?

When I was general counsel, Princeton was faced with a challenge relating to the funding of the graduate program of what was then called the Woodrow Wilson School of Public and International Affairs.

There was about half a billion dollars in a supporting organization that was the result of a wonderful gift back in the ’60s from Charlie Robertson 1926 and his wife Marie. That gift essentially funded the graduate program of the School of Public and International Affairs.

The lawsuit lasted for 78 months. Who was counting? Well, I was. And the value of that foundation increased from $500 million into excess of $800 million during those 78 months.

On its surface, the issues related to the family looking for, if you will, more control and not have the University have as much as it did. But looking back what really it was about in the post-9/11 era was what I might call a conservative, elite perspective that was at odds with a Princeton view of how to educate, and how to research, and how to think about the problems of the world.

The Robertson view in 2002 was that the graduate program should be training more folks for public service, essentially in the State Department or maybe the CIA. The school’s view was that there’s a whole, broad set of issues that impact international security, the welfare of the United States, and the foundation’s dollars are very appropriately spent on those sorts of things.

That was an existential threat. It was resolved in Princeton’s favor some years later. There was a heckuva lot of attention given to it not only administratively, legally, and financially, but I’m certain by the faculty whose research was potentially in jeopardy.

That’s chump change compared to what we’re dealing with now, though at the time it seemed quite extraordinary, and I think any board member at Princeton would have said it’s the biggest threat Princeton’s experienced in anybody’s memory.

Editor’s note: The settlement called for Princeton to pay $50 million plus interest to private foundations controlled by the Robertson family and $40 million in legal fees, while the rest of the money (more than $600 million) remained under University control. Read PAW’s coverage.

How do you imagine the general counsel job at Princeton has changed since you left more than a decade ago?

On so many levels. Almost every piece of legislation carries with it these days some sort of reporting obligation. There’s just so much more to be aware of not only on the federal level but also on the state level. It’s just a bigger set of responsibilities and a bigger job.

But also, and we’re seeing this right now, it’s a more politicized environment not only in terms of the national political environment, but the campus constituencies. Social media and other vehicles having a lens into what’s being discussed everywhere creates a whole set of challenges as well as opportunities. And so there’s this expectation that there’s an answer to everything and, geez, maybe we’ll get that answer from the lawyer.

Also, we’re seeing a sea change in what intercollegiate athletics means, how it’s being delivered, and that’s going to continue to be a challenge. Unfortunately, on a lot of levels, there are legal inputs. … Happily Princeton is not as worried about [antitrust issues or conference realignment], but it’s still impacted by that in terms of some of the teams it competes against, the resources that those teams will bring to bear. That’s made the job of a lawyer more complex at Princeton and elsewhere.

What are your thoughts on DEI programs and how they have come under fire?

Who would have ever thought we would even be debating whether being equitable was problematic, that equity shouldn’t be something to aspire to?

The day before the Supreme Court ruled in [Students for Fair Admissions v. Harvard], virtually every campus leader in America would have agreed that a diverse learning environment beats the alternative. And the day after the Supreme Court ruled, those leaders didn’t think any differently about that.

We should be proud of our efforts to create and maintain diverse learning environments. We should be proud of our efforts to be equitable and inclusive, and those things need to be probably separated from the acronym and talked about in a different way and not in a defensive way.

This interview has been edited for length and clarity.