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Friday, Dec. 19, 2014

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Response filed by University in Robertson Foundation lawsuit

Responding to a lawsuit filed by William Robertson and other members of the Robertson family in July 2002, the University joined President Shirley M. Tilghman and three other University-appointed trustees of the Robertson Foundation in filing a motion in New Jersey Superior Court today asking that the lawsuit be dismissed.

The filing by attorneys for the University and the trustees argues that, under the law, members of a foundation board of trustees are required to give the board an opportunity to investigate and resolve potential problems before turning to the courts. In this case, Robertson, one of three family-appointed trustees on the seven-person board, made a number of requests for additional information and changes in operating procedures at the April 2002 annual board meeting (the first board meeting chaired by Tilghman) and the board responded by agreeing to attend to the requests.

The University was in the process of responding affirmatively to requests made to it by the foundation's board when the lawsuit was filed in July. At that point, board operating procedures had been changed, additional information was being provided, and, as today's filing notes, the University-appointed members of the board were "taking additional steps to assure that the foundation remains true to its objective of supporting, maintaining and advancing the mission of the graduate program" of the Woodrow Wilson School of Public and International Affairs. According to the filing, Tilghman and the other University-appointed trustees have faithfully fulfilled their responsibilities as foundation trustees and "should be permitted the opportunity to continue to discharge their fiduciary duties to the foundation and to the University that it supports, without judicial intervention."

The filing also points out that only individuals who were members of the board at the time of the acts cited in the complaint can sue in the name of the foundation. In this case, only two of the five plaintiffs (Robertson and his cousin, Robert Halligan) meet that requirement. Yet even the claims of these two plaintiffs should be dismissed, according to the filing, because, as members of the board for 28 and 20 years respectively, they actively participated in and either approved of or acquiesced in many of the actions challenged by the lawsuit and on repeated occasions expressed their support and admiration for the Woodrow Wilson School and its leadership.

In public statements, Robertson has alleged that his prime objection to current board operations is that the board is actively pursuing a recommendation to delegate responsibility for day-to-day oversight of the management of the foundation's assets to an investment firm or to PRINCO, the University office that oversees investment of the University's endowment, subject to continuing oversight and control by the foundation's board and its investment committee. This recommendation was made by the other two members of the foundation's three-member investment committee who, like Robertson, have served on the committee since its inception in 1978. They believe that the foundation has a fiduciary responsibility to add such a layer of professional management now that the foundation's endowment exceeds a half billion dollars.

The filing moves to dismiss this aspect of the complaint, noting that the foundation's articles of incorporation (approved by Robertson's father, who served as the foundation's president for many years) clearly authorize the foundation to seek investment advice that it deems will most effectively serve the interests of the foundation, and that there is no prohibition against selecting PRINCO for this assignment. At the same time, it also points out that, at the April meeting, the trustees agreed to postpone any decision until there had been a thorough analysis and discussion of investment options among all foundation trustees, and that they subsequently asked the investment committee to interview a variety of investment managers and then make a report and recommendation to the full board. That interview process has not yet been completed and no recommendation has yet been made.

The Robertson Foundation was created in 1961. To secure tax-exempt status for the foundation and comply with University policy, the Robertsons established the foundation in a manner that later enabled it to become what is known as a "support organization" of the University. Under IRS regulations, this requires that it must be operated and controlled by the University. To meet this requirement, the president of the University serves as one of seven board members and as chair and appoints three other members. The Robertson family appoints the other three board members.

As the filing points out, with the support of the Robertson Foundation, the Woodrow Wilson School "has become a major international center of advanced training and research in public affairs." Its graduates "pursue challenging careers as policymakers, administrators and managers in government at all levels and in non-governmental organizations, multilateral organizations, foundations, policy and research institutes, and other endeavors - both in the United States and abroad."

Contact: Lauren Robinson-Brown (609) 258-3601

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