June 29, 2009

The May Report: 6/29/2009: The 1st of 5 reports for today: Connecting the dots:
Kass plus emergency meeting minutes: UIUC’s Chancellor Richard Herman’s head to
roll very soon, maybe as soon as today.

Editor and publisher: ron@themayreport.com, ronaldmay@aol.com,
www.themayreport.com, 773-525-3944.

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________________________________
TABLE OF CONTENTS

The Scoop section:

— Minutes of the University of Illinois Board of Trustees meeting on June 25th
— John Kass: Admission-jobs swap has old-school stink
— Jack Stripling: Foxes Guard Illinois Henhouse

[Editor's note: Ron May here. This is a pretty straightforward connect the dots
story. Corruption appears to be rampant at the University of Illinois and it
now implicates several members of the board of trustees who were pressuring the
law school dean to admit students who were not qualified and one quid pro quo
that was offered is that in exchange for admissions favors, the dean would get
some "loser" students at the bottom of the class good jobs at high salaries
which of course helps the law school in its ratings nationally. If I were a law
school grad from U. of I. I would launch a class action suit against the school
and the university for this.

Anyway, here are the two dots to connect. John Kass wrote on June 26th that
"Within days, perhaps sooner, you'll hear a few thudding sounds, like lonely
bowling balls tossed down a dark alley, and you'll realize you're listening to
the political heads of Chancellor Herman and his crew rolling into history."

Kass may be right. Those emails are so incriminating, I can't see how they can
keep Dick Herman on as Chancellor. Herman is not the only one who should get
the guillotine.

My personal list is topped by the whole Illinois Ventures crew starting with
John Banta, followed by Rob Schultz, John Regan and Kathryn Hyer. They have had
no successful deals that I know about (but I will look into it further) to
justify their huge salaries and even larger bonuses. That is my project for
this next month, first to investigate them, and then to see what action can be
taken to correct the situation.

Several people I have spoken to off the record in the VC industry were appalled
to find out how much they were being compensated for running a state fund of no
more than $16MM.

I'm sure that Tom Churchwell, Matt McCall, Ellen Carnahan, and Bob Geras would
all love to be making Banta's money, especially based on his track record.

Illinois Ventures is our own tech community's contribution to the corruption of
the Illinois and Chicago way. That does not leave out others who deserve
scrutiny like TiE and the CEC, and our buddies Adarsh Arora and David
Weinstein, and all those DCEO grants, but Illinois Ventures is just a most
egregious case.

So, what are the dots here? Kass says that Dick Herman's head will roll. Then
look at the minutes for the University of Illinois board of trustees meeting
for June 25th at 11am. The minutes indicate an emergency executive session was
called at the start of the meeting to discuss pending litigation and an
employment matter. You don't have to be a Ph.D. in computer science from UIUC
to figure out that the employment matter is probably the severing of Richard
Herman's head from his body.

He could be gone as early as today. That is my "scoop" which is really just a
matter of combining info. that is already out there.

There will be five reports today, all short. The next report is on Matt McCall
and his inability to raise a fund and how he subsequently joined New World
Ventures as a partner. I am still working on understanding how New World is
structured as a VC fund.

In preparation for the next report, read these two articles.

www.vcconfidential.com/2009/06/vcs-mathematical-challenge.html

www.techcrunch.com/2009/06/27/the-top-100-networked-venture-capitalists/
This is an excellent article based on a serious study of the top VC firms and
well worth reading.

And while you're at it, read this too. The is where the famous Chicago School
of economics and law goes off track and is out of touch with the real world.
Posner's scheme is cockamamy.

www.becker-posner-blog.com/

And then this.
How To Save The Newspapers, Vol. XII: Outlaw Linking
143 Commentsby Erick Schonfeld on June 28, 2009

Of all the misguided schemes put forth lately to save newspapers
(micropayments! blame Google!), the one put forth by Judge Richard Posner has
to be the most jaw-dropping. He suggests that linking to copyrighted material
should be outlawed.

No, Posner does not work for the Associated Press (which also has some strange
ideas on linking). He is (normally) considered to be one of the great legal
minds of our time. Posner is a United States Court of Appeals judge in Chicago
and legal scholar who was once considered a potential Supreme Court nominee. He
is someone who should know better. Yet in a blog post last week on the future
of newspapers, he concludes there may be only one way to save the industry:

Expanding copyright law to bar online access to copyrighted materials without
the copyright holder's consent, or to bar linking to or paraphrasing
copyrighted materials without the copyright holder's consent . . .

Let me repeat that. He wants to "bar linking" to newspaper articles or any
copyrighted material without the "copyright holder's consent." I am sorry Judge
Posner, but I don't need to ask your permission to link to your blog post or to
a newspaper article online. That is just the way the Web works. If newspapers
don't like it, they don't need to be on the Web.

Much of what Posner wants to outlaw is public discourse. Why is it okay for
people to talk about the day's news in a bar or barber shop, but not online?
People should be able to discuss the day's news on the Web without fear of
violating copyright law. The natural way people discuss things on the Web is by
quoting and linking to the source. (Except maybe Posner, he doesn't seem to
link to much of anything in his blog posts).

Posner never squares his position with freedom of speech or fair use rights. He
doesn't even mention them. Yet those are precisely the rights which allow me to
paraphrase his argument without his permission so that I can disagree with it.
Posner is more concerned with the "free rider" problem. You know, all of those
"vampires" and "parasites" supposedly sucking the life out of newspapers by
quoting from them or linking to their stories. Blogs and other sites just take
content from newspapers, Posner asserts, but they share none of the costs of
news gathering.

Of course, that blanket assertion is simply not true. A growing number of
blogs, including TechCrunch, do their own news gathering and send writers to
cover events at their own cost. But even if we limit the discussion to
cut-and-paste sites, the free rider argument still doesn't hold much water. You
can't be a free rider if you are giving something back of value. A link on its
own is valuable.

Where does Judge Posner think all of these newspaper sites get their readers?
It is mostly through links, not direct traffic. Removing the links would
obliterate the majority of the online readership for many newspapers.

Beyond that, extending copyright law to criminalize linking would cripple the
entire Web. In all of these debates, newspapers are always placed somehow at
the center of the Web, completely ignoring the millions of other sites out
there which have nothing to do with news. Yet changes to copyright law to make
linking illegal would have much wider, unintended consequences. I can't believe
I even have to explain why this is a bad idea.

(Hat tip to Jay Rosen).
++++++++++++++++++++++++
May again. Then I will have a report on the memorial service for John Callaway
who died last week of a heart attack in Racine, Wisconsin and who was
remembered Sunday at Rockefeller Chapel on the campus of the University of
Chicago. I was able to attend that even though I missed four or five events
last week that I wanted to attend but was not able to go because of my two
surgeries.]
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The Scoop section:
_______________________
Minutes of the University of Illinois Board of Trustees meeting on June 25th
[Editor's note: May here. This was a pdf so it comes in rough, but you get the
general idea.]

www.uillinois.edu/trustees/agenda/June%2025,%202009/

UruIVERSITY oT ILLINoIS

Urbana-Champaign r Chicago . Springfielcl

The Board of tustees

352 Henry Administration Building, MC-350

506 South Wright Street

Urbana, IL 61801

Iune25″2009

NOTICE

An emergency meeting of the Board of Trustees of the University of

Illinois will be held on Thursday, Jvne25,2009, beginning at 11:00 a.m., in
Room 206 A

& B at Student Center West, 828 South Wolcott Avenue, Chicago campus, Chicago,

Illinois. After the meeting convenes in open session, the first order of
business will be a

motion to hold an executive session.

In closed session, the Board of Trustees will consider University

employee matters, and pending, probable or imminent litigation against,
affecting, or on

behalf of the University.

Michele M. Thompson

Secretary, Board of Trustees

c. Members of the Board of Trustees

President Joseph B. White

Mr. Lester H. McKeever, Jr.

University Officers

Members of the Press

Urbana . (217) 333-1920 . Fax (2I7) 244-2ZBz

Chicago ‘ 414 Administrative Office Building,MC-975,1737 WestPolk Street,
Chicago, IL 60612 . (g1Z) g-IZTs

============

Meeting of the Board of Trustees

flniversity of lllinois

Specìul Meeting

Thursday, June 25, 2009

Cntc¿co C,q,upus, UIC Srunnur CnwrnnWEST, Roous 206 A & B

B2I Sourn [4lorcorr AvENu4 Cnrc,q,co, Ituuots

Teleconference phone number : 866-209-64 38

Partícípant Code: 887 205*

Thursdayo Jun e 25r 2009

1l:00 a.m. l!flee,ting sf the Beard Convenes

o Roll Call

11:05 a.m. W.Ietion f,or Exeeutive Session

The Board meets in Executive Session to consider:

1. University employee matters

2. Pending, probable or imminent litigation against, affecting, or on

behalf of the University

t2.00 noon NÏeef.ing of'the Board A-djourns

*The only btrsiness in open sessio.r,r will be a nrofion to hotrd an executive
session.
__________________________________
John Kass: Admission-jobs swap has old-school stink

www.chicagotribune.com/news/columnists/chi-kass-26-jun26,0,3798890.column

Admission-jobs swap has old-school stink
John Kass
June 26, 2009
If there were any doubts that Illinois is the diseased poster child of
political corruption, those doubts are long gone.

Friday's story in the Tribune exposes a widening pattern of corruption at the
University of Illinois. This time, with the trading of law school admission for
patronage-style jobs.

So any doubts about where this state stands should be erased. What remains is
the smell.

The state stinks, from Rich Daley's City Hall to Springfield, and now all
that's left, for taxpayers, is the smell and the stain. Corruption and
patronage, once thought to be the exclusive province of greasy politicians, now
reach into the law school of the state's premier public university.

John Kass Bio | E-mail | Recent columns

Friday's story details how University Chancellor Richard Herman forced the
university's law school to accept an unqualified student. That student had the
backing of former Gov. Rod Blagojevich. The student's relative dropped wads of
campaign money on ex-Gov. Dead Meat.

In exchange for corrupting his law school's admissions policy, Herman wanted to
get jobs for five of his law school graduates. University officials considered
the law grads so far at bottom of their class that they needed political clout
to get a decent salary at a good law firm. If that wasn't possible, the U. of
I. was willing to place them in government jobs.

"Yeah, I'm betting the Governorship will be open," Heidi M. Hurd, then dean of
the university's College of Law, wrote in an e-mail to Herman on April 29,
2006, perhaps joking that Blagojevich's time in public life was coming to an
end.

What followed in her e-mail was worse.

"Other jobs in Government are fine, since kids who don't pass the bar and can't
think are close enough for government work," Hurd wrote. In another e-mail to
other U. of I. officials, Hurd wrote:

"FYI: The deal is supposed to be that WE get to pick the students -- and they
are supposed to be bottom-of-the-class students who face a hell of a time
passing the Bar and otherwise getting jobs!"

That's law school the Chicago Way. If they can't pass the bar on the first or
second try, they're qualified to become mayor.

The latest e-mails from Herman, Hurd and other U. of I. officials were released
Thursday. The Tribune had asked for all such e-mails in April. But these
somehow were forgotten, until U.S. Atty. Patrick Fitzgerald issued subpoenas.
Then, magically, that which was lost was found. A miracle!

Did the U. of I. search by the light of Batman's beacon, Diogenes' lantern or
some other powerful lamp of truth?

Thomas Hardy, spokesman for the University and a former Tribune colleague whom
I know and respect, dismisses my skepticism and deserves his say.

"We've made a good-faith effort to respond to the Tribune's Freedom of
Information requests, and others," Hardy said. "Some documents were not
produced that apparently should have been. We don't know right now the reason
for that, but the fact of the matter is that in collecting documents and doing
interviews for the Quinn commission, we've come across these new e-mails and
made them publicly available."

Within days, perhaps sooner, you'll hear a few thudding sounds, like lonely
bowling balls tossed down a dark alley, and you'll realize you're listening to
the political heads of Chancellor Herman and his crew rolling into history.

But don't make the mistake of thinking that lopping a few heads and burning the
stumps will clean things up.

Not in the state where our boss Democrats in the state legislature -- guys like
state Senate President John Cullerton (D-DeLeo) -- are still slapping
themselves on the back for stopping the Illinois Reform Commission led by
former assistant U.S. Atty. Patrick Collins.

Not in the state where Mayor Daley can pretend not to know that his nephew
received $68 million in city pension money to invest, and then, without telling
his taxpayers, puts them on the hook for likely cost overruns in his 2016
Olympic dream.

Not in the state where -- just before the patronage abuse trial of Daley's top
aides a few years ago -- mayoral mouthpiece David Axelrod, now the media wizard
for President Barack Obama, defended political patronage by arguing it is the
grease that helps government run smoothly.

Think about your taxes. And all the fine students denied admission to the U. of
I., though they have the grades.

Think of the clout that's been reported by this newspaper. Consider the
thousands of excellent, hardworking students at the U. of I. who've been
dishonored by the corruption of adults who are supposed to protect them.

If you've read carefully here and elsewhere, you know about corrupt
politicians, corrupt cops, corrupt businesses. But the last line of defense for
the corrupt are kinky judges.

How do you get such judges? You begin in law school, with university officials
establishing corrupt practices, leveraging unqualified lawyers into jobs.

Lawyers become judges, don't they?

jskass@tribune.com
______________________________________
Jack Stripling: Foxes Guard Illinois Henhouse

www.insidehighered.com/news/2009/06/29/illinois

Foxes Guard Illinois Henhouse
June 29, 2009
When state university leaders lose trust on issues of integrity, it's usually
the job of trustees to show them the door. It's not that simple, however, in
Illinois - where nothing ever is.

As daily and damning reports illustrate, the admissions scandal at the
University of Illinois has engulfed senior administrators, as well as some of
the very trustees who would, under typical circumstances, be making heads roll.
Therein lies the quandary: as faculty and lawmakers are learning firsthand,
it's hard for trustees who are themselves implicated in a scandal to fire
anyone for their part in it.

Since the Chicago Tribune first broke the story of widespread political
favoritism in the admissions process at the University of Illinois
Urbana-Champaign, the tentacles of the scandal have reached into the highest
corridors of power: The governor's office, the system's board of trustees, the
campus president and the system chancellor have all - in one way or another -
been connected to what the Tribune called Illinois' "clout" list. But the two
men at the top of the university's pyramid - system President B. Joseph White
and campus Chancellor Richard Herman - have retained their jobs, and no trustee
has publicly suggested that they step aside.

"Obviously it's a huge problem," said Cary Nelson, an English professor at
Illinois and president of the American Association of University Professors.
"The board is thoroughly implicated, or at least certain members are thoroughly
implicated, and they cannot under those circumstances exercise independent
judgment."

With one exception, the current non-student trustees at Illinois were all
appointed by either Gov. Rod Blagojevich or Gov. George Ryan, both of whom left
the governor's office in disgrace amid corruption charges. The scandals of the
two preceding governors have prompted some movement in the Legislature to
simply undo all appointments both men made while in office, including
university trustee appointments.

While the legislation passed the House, it has been locked up in the Senate and
is competing for attention with a large agenda of budget initiatives.

Rep. Mike Boland, chairman of the state House Higher Education Committee,
supported the effort to undo the Blagojevich and Ryan appointments. Absent
passage, however, Boland says he'd settle for the resignations of all those
implicated in the admissions scandal.

"I called for the resignation of any of the trustees and actually even those
higher administrators in the University of Illinois who are directly implicated
in this," he said Friday. "I don't mean the paper pushers that just fill out
the admissions forms; I'm not interested in that, but in particular the
trustees. In my eyes they violated the reason they were appointed."

Even trustees who aren't implicated have some answering to do, Boland added.

"I would say even in those who weren't [involved], what is the story here?” he
said. “Did the others not know about it? Were they as naive as you might say
the rest of us, thinking we have a meritocracy admissions [system] instead of,
as it turns out, some episodes of favoritism?”

There are plenty of suggestions that trustees took advantage of their influence
over the admissions process. Trustee Kenneth Schmidt, for instance, admitted in
a 2006 e-mail that his forwarding of applicant names had reached “epidemic”
proportions, adding that he’d like to “check up on my crop en masse,” the
Tribune reported.

The communications office for Illinois’ Board of Trustees did not respond to
inquiries Friday.

Governor May Have Power to Oust

Absent from the conversation thus far are the powers of Gov. Pat Quinn, who
replaced Blagojevich after his impeachment and serves as an ex officio trustee.
The Illinois Constitution grants the governor power to “remove for
incompetence, neglect of duty, or malfeasance in office any officer who may be
appointed by the Governor.” It’s unclear whether those powers would extend to
officers Quinn did not personally appoint, however, and the governor’s office
did not respond to queries on the matter.

Rather than calling for ousters, Quinn has formed a panel to investigate the
admissions controversy. Asked whether Quinn had faith that trustees implicated
in the scandal could be trusted to exercise their oversight duties – or hold
administrators accountable – the governor’s press office issued a short
statement.

“Governor Quinn looks forward to that panel’s report. Upon reviewing its
findings, the governor will take appropriate action,” Marlena Jentz, Quinn’s
deputy director of communications, wrote in an e-mail to Inside Higher Ed.

Faculty Yet to Formally Condemn

With nearly each passing day, more stories have emerged about the depth of the
“clout” scandal. Newly released e-mails, for instance, showed Chancellor Herman
pressuring the law school to admit one of Blagojevich’s favored candidates in
exchange for the governor securing jobs for five law graduates with subpar
academic credentials. These revelations, however, have not provoked the sorts
of formal faculty rebukes one might expect: No resolutions. No votes of no
confidence. No formal condemnation of any kind.

So where’s the outrage? Nicholas Burbules, chairman of the Urbana-Champaign’s
Faculty Senate executive committee, said he does not expect any formal
statements until after the Quinn panel issues its report. That’s in part out of
respect for the process, but also because the story has had so many twists and
turns that faculty don’t want to point fingers until they better know where to
point them, Burbules said.

“I think people are being very leery about saying anything until we have more
information,” he said.

But once they see where to point fingers, faculty may find themselves pointing
just about everywhere.

“The more that I hear about this, the more this seems to me a systemic
problem,” Burbules said. “I’m not minimizing individual people’s individual
responsibilities, but the more you look at this story the more it looks like a
web … I don’t want to talk about blame, but I will say there is plenty of
responsibility to go around.”

– Jack Stripling
__________________________________________
end of report