Letter to the Editor: A case of academic money laundering 

One of the world’s leading music schools, Westminster Choir College, which has for nearly a century educated many of the world’s pre-eminent musicians, seen its celebrated ensembles participate in history-marking events and brought endless joy to audiences worldwide. 

Yet, now, the Rider administration are attempting to sell the college and the 23–acre property it occupies in Princeton to a Chinese commercial business. The proposed sale, conducted through a secretive process, has provoked outrage and lawsuits, as well as calls from prominent figures in the world of music and politics for Rider to reconsider its plans.

In addition to the serious questions about Westminster’s future, raised by Rider’s board’s choice of a prospective buyer, there are significant doubts about the propriety of Rider’s scheme to sell a nonprofit institution, with its restricted gift of land and dedicated endowment, for tens of millions of dollars. These issues have been raised in two pending lawsuits. One brought by key Westminster stakeholders—including students, parents, donors and alumni—asserts that the proposed sale and the actions taken by Rider in connection with it violate the merger agreement and the restrictions on the use of Westminster’s assets. The second lawsuit was filed by the Princeton Theological Seminary, which has rights to Westminster’s Princeton property based on the use restrictions. 

Given all the problems inherent in this transaction, why has the board and Dell’Omo chosen to take this action? They claim that Rider faced insurmountable deficits that were caused by and could only be mitigated by the sale of Westminster.  But, in fact, Rider’s projected deficits have never materialized and, for the two years prior to the dramatic fall off in enrollments and donations caused by the board’s announcement of its intention to either sell or close the choir school, Westminster had a surplus. Westminster has an endowment of almost $20 million equal to half of the proposed sales price. This money is restricted both in how much can be spent in any year, 4 to 5 percent, and may only be used for the benefit of Westminster. The board and Dell’Omo cannot touch this money as long as it is designated as Westminster’s endowment but, if passed through a third party, it could return to them laundered of its restrictions. That this is their intention is made crystal clear by the following admission in the documents Rider provided in its application for its latest bond.

The only problem is that this form of money laundering is no more moral or legal than any other.

The purchase and sale agreement between Rider’s board and Kaiwen Education is, in fact, a conditional agreement. It is conditioned on the approval of the National Association of Schools of Music, the New Jersey Department of Education, the Attorney General of New Jersey, the Chancery Court of New Jersey, the China National Development and Reform Commission, the Chinee Ministry of Commerce and the Chinese State Administration of Foreign Exchange and the outcome of the grievance filed by the Rider Chapter of the American Association of University Professors. And all of those approvals must be in hand by July 1, 2019 according to the Purchase and Sale Agreement.

We can only fervently hope that one or more of these entities see this sale for what it is and exercise their stewardship obligations and put an end to this travesty. Until then stakeholders will continue to fight to preserve the educational and cultural icon that is Westminster Choir College.

        Jeffrey Halpern

Professor of Sociology and AAUP officer

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