June 29, 2006

A Withdrawn Gift Rankles at Harvard

Larry Ellison has abandoned his planned $115 million gift to Harvard University — and there is widespread skepticism at the university about the technology guru’s profferred reason for doing so.

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Ellison, the CEO of Oracle Corp., told Britain’s Daily Telegraph this week that he no longer planned to contribute funds to create a global health institute at Harvard. He attributed the decision to the departure of Lawrence H. Summers, whose tenure as Harvard’s president was cut short largely by faculty disenchantment. “The reason I didn’t finish my gift to Harvard was because of the way Larry Summers suddenly left Harvard,” he told the newspaper. “I lost confidence that that money would be well spent.”

That news came at roughly the same time that Ellison said he would give $100 million to his medical foundation (which will then distribute the funds to other charities) to settle a lawsuit brought against Oracle by unhappy shareholders.

Harvard officials had little to say about the news. Sarah J. Friedell, director of media relations for Harvard’s office of alumni affairs and development, said university officials had received no formal word from Ellison or Oracle about the decision. Beyond that, she offered only this terse statement: “We are disappointed with Mr. Ellison’s decision to withdraw his commitment.”

But some other officials at Harvard say Ellison’s rationale for abandoning the gift don’t quite ring true, given how events unfolded in the more than two years since Harvard and Ellison reportedly began talking.

Although the discussions apparently began in 2004, they did not make their way into the public eye until May 2005, when Ellison, in an interview with the San Francisco Chronicle’s editorial board, boasted that his Ellison Medical Foundation was preparing to make a “big announcement” with Harvard. A month later, TheWall Street Journal published an article with this headline: “Oracle’s Ellison Gives $115 Million to Harvard Study.”

Harvard officials say that lawyers for Ellison and the university worked through the early summer on documents to wrap up the deal, and that they sent paperwork to Ellison. But in the fall, they say, Ellison went strangely silent. Christopher Murray, the Richard Saltonstall Professor of Population Policy, who had been tapped to head the new institute, told Bloomberg Wednesday that Ellison had cut off communication with Harvard officials — including Summers — last November, months before Summers resigned in February.

“I am not sure what to make of Ellison’s remarks as he was not willing to speak with Summers on this topic despite repeated attempts,'’ Bloomberg quoted Murray as saying. Murray did not reply to messages seeking comment.

Harvard officials also said it struck them as odd that Ellison seemed to cut off talks with Harvard at about the same time last fall that he settled the shareholder lawsuit and was ordered to pay $100 million to charity.

In an interview Wednesday, Bob Wynne, a spokesman for Oracle, stood by and amplified Ellison’s comments. He challenged the suggestion that Summers’s departure could not adequately explain Ellison’s change of heart, given that the Oracle honcho seemed to lose interest in the Harvard gift long before Summers’s resignation but then did not formally abandon the donation until months afterward. Ellison “was well aware of the troubles that Summers, who he saw as the source of the whole effort, was having,” Wynne said. “He might not have had a conversation with Murray since November, but he was watching the Summers situation unfold. He considered it for a few months, but ultimately decided that the situation was not right.”

Wynne also said the Harvard gift and the settlement of the shareholder lawsuit are “totally unrelated.” “I know the number amounts are similar, but one is a court-ordered settlement that Larry’s meeting the requirements of, and the other is a contribution to Harvard under the guidance of Summers, who is no longer there.”

The Oracle spokesman also noted that there was “never a signed agreement” between Harvard and Ellison.

That is true. But what is also true, some at Harvard noted, is that Ellison may be be developing a pattern for undelivered big gifts. In 2001, he told The Wall Street Journal that he would give $150 million to either Harvard or Stanford Universities for a center to study the interplay of technology, politics and economics. That gift never materialized.

— Doug Lederman

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