Times have changed since 1961, when Charles and Marie Robertson, heirs to the A&P grocery store fortune, donated $35 million in company stock to Princeton University.

A dashing young John F. Kennedy was in the White House. It was the era of Camelot and the Peace Corps, when many an Ivy Leaguer actually dreamed of becoming a government bureaucrat.

So the Robertsons targeted their gift to the graduate program of the Woodrow Wilson School of Public and International Affairs, one of the nation's premier centers for the study of politics and policy. Their largesse, everyone agrees, made the school what it is today.

Now, the Robertsons - more precisely, Charles and Marie Robertsons' heirs - want their money back. All $500 million of it.

Their complaint: The Wilson School has not fulfilled the couple's vision of a school that trains graduate students to work in the federal government, particularly in international affairs.

More Wilson alumni work in business and finance, they say, than in the U.S. government - even though the Robertson endowment pays almost every graduate student's tuition.

"My parents' purpose was to try to help train the very, very finest individuals to serve the federal government, to promote peace, to promote democracy, to defend peace, and to defend democracy around the world," said William Robertson, who, along with his two sisters and a cousin, is suing the university.

If they prevail in court, the heirs say they have no intention of keeping the money for themselves; instead, they will bestow it on another school that agrees to follow the family's wishes.

Students and faculty say the dispute has not disrupted their scholarly research and earnest discussions of national security, Third World poverty, and transportation policy. But it does raise basic questions about the Wilson School's purpose, and more broadly, the country's love-hate relationship with Washington.

The Robertsons' emphasis on federal employment as the epitome of public service was rooted in the ethos of the early Sixties.

"Everybody was going to go to Washington and change the world," said William H. Branson, who has taught at the Wilson School since 1967. "Well, we have a different world now. And the school has to adapt to a changing world."

What changed? The university, in its legal papers, cites the Vietnam War, Watergate, and the resulting "negative public image of government" - an image that made federal employment considerably less appealing to idealistic young people.

In addition, the university says, Uncle Sam isn't hiring like he used to, leading many civic-minded folks to seek work at private think tanks and non-profit organizations. Such groups, says Ana Echevarria, a second-year Wilson student, are "key to the way government functions."

Echevarria wants to be a community organizer, either here or abroad. Although she doesn't rule out a career in government, she is more interested in working on the outside - to make sure government is serving the people.

"Unfortunately, government is shrinking, and the non-profit sector is increasing," she said.

And then there's politics. Students, especially those who study public affairs, tend to lean left, while Republicans have controlled the White House for 14 of the last 22 years.

"My interest is international environmental climate change," said a 29-year-old woman who started at Wilson this fall and did not want to give her name. "I would love to work for the federal government, but our federal government doesn't really care much about climate change right now. So most of the career opportunities for me are going to be in the non-profit sector."

The Robertson heirs, using information from the Wilson School's most recent alumni directory, found that 13 percent of those who had graduated since 1948 - the year the graduate program began - worked for the U.S. government, and only about 7 percent were federal employees dealing with international affairs.

The largest share, 15 percent, worked in banking, finance, or industry. When combined with those in consulting and law, the percentage jumped to 34 percent.

To William Robertson, those numbers amount to a betrayal of his parents, and of the foundation set up to administer the gift.

"The charter itself is really very, very clear," he said. "And it specifically provides for training students for government service. It doesn't say 'public service,' it says 'government service,' and then it goes on to say more specifically federal service in international affairs."

In legal documents, the university contends that federal service in international affairs has been an "aspirational goal," not a requirement, and that Charles Robertson always recognized that his endowment could be used to train students "for more broadly defined public service."

Under that expansive definition, the school is far more successful: Forty-one percent of alumni worked for state or local governments, non-profit organizations, educational or research institutions, multilateral organizations, or foreign governments.

Nevertheless, William Robertson says his father was continually disappointed by the school's placement record. In 1972, the elder Robertson wrote to the university president: "The time has come to face up to the obvious fact that the school has never come within shouting distance of achieving its goal and I personally doubt that it ever will as long as it continues on its present course."

"They kept placating us and placating us and making more excuses, but our purpose never changed," said Robertson, who lives in Naples, Fla., and is a Princeton alumnus, like his father.

Robertson, who said he will be satisfied with no less than 50 percent of Wilson graduates going into federal service in international affairs, now doubts that Princeton ever really intended to follow his parents' wishes.

Branson, the professor, acknowledges as much. Like most of the Wilson students, he believes the Robertsons' insistence on federal employment is too cramped a notion of public service.

"I don't think the concentration on federal service was ever really felt by the university, by the students, and by the faculty," he said. "I think there was a concentration on public service, but public service would include working at the United Nations, working in the New York City mayor's office."

To anyone sitting in on "The Politics of Public Policy," a required course for first-year students, it's clear that public service of one form or another is foremost in students' minds.

Among the 16 students in the basement room of Robertson Hall are three Peace Corps veterans; a former staffer from Capitol Hill and the U.S. Environmental Protection Agency; a former aide to Oakland (Calif.) Mayor Jerry Brown; and an Army officer, just back from Iraq, whose next assignment will be teaching cadets at West Point.

Mimicking the teaching method of many business schools, this course uses "case studies" - real-life scenarios that illuminate universal themes. In the semester's first case, students put themselves in the shoes of a congressional aide who must advise his boss on an upcoming vote about space station funding. The dilemma opens up a panoply of larger issues:

How can a layman decide between dueling scientific experts? Is expert opinion more or less important than public opinion? Does the public even care? Should the decision be based on gut feelings - the wonder of exploration, the symbolic staking out of new ground - or a practical cost/benefit analysis?

"The point of the exercise is to make you aware of these other things going on around you," Agnes Schaefer, one of the course instructors, tells the students.

For all the varied careers that Wilson graduates ultimately pursue, government is clearly the object of their attention while they are here.

And some, like Jordan Tama, certainly embody the Robertsons' vision: This past summer, he was an intern at U.S. Embassy in Paris and is interested in working for the State Department after earning his degree.

But Tama, like his classmates, thinks it would be a mistake for the school to cater only to people like him. If it did, the school might lose a lot of its cachet.

"If the school were to narrow the focus," he said, "to require us to pursue jobs in federal government, a lot of students who come here now probably wouldn't want to, because a lot of students are interested in doing other kinds of work."

Big stakes as donor's heirs fight Princeton

Suit to regain gift could spark others

Sunday, November 28, 2004

BY KELLY HEYBOER

Star-Ledger Staff

In higher education circles, Robertson vs. Princeton University is the kind of epic lawsuit that could make Ivy League history.

The dispute is simple: Members of the Robertson family, heirs to the A&P supermarket fortune, are unhappy with how Princeton officials have spent their late parents' enormous donation to the school and want the money back.

What sets the case apart is the amount involved ($600 million), the stature of the players (one of nation's wealthiest families and one of the world's most prestigious universities) and the severity of charges (misuse of funds, fraud and a 40-year cover-up).

Experts say that if the increasingly nasty case, one of the largest "donor intent" lawsuits ever, makes it to court, the public could get an unprecedented behind-the-scenes look into the world of elite institutions and their wealthy benefactors.

"This case is unique for Princeton, unique for higher education," said Peter McDonough, the university's general counsel.

The list of supporting players is a who's who of higher education. Nearly 60 individuals have given depositions or are scheduled to do so, including three former Princeton presidents and some of the nation's top scholars.

Though case isn't scheduled to go to trial for 16 months, the Robertsons already have spent $5 million in legal fees, and Princeton officials say their tab is approaching that level. If the case makes it to trial, those costs could double.

Amid the backdrop of the lead plaintiff sitting in Roseland last week for three days of depositions, the Robertsons and Princeton officials blamed each other for forcing what should have been a closed-door dispute into the courts.

"We are in full battle mode," said William Robertson, the family's eldest son and a 1972 Princeton graduate.

Robertson, of Naples, Fla., is president of the Banbury Fund, another foundation established by his parents. That foundation (named after the street where his parents once lived) is financing the Princeton lawsuit. But Robertson said family members will put up personal fortunes to fight Princeton if needed.

THE 'X FOUNDATION' The relationship between Princeton and the Robertsons began much more positively.

In 1961, Marie Robertson and her Princeton-graduate husband, Charles, anonymously donated $35 million in A&P stock to a foundation that would fund the university's Woodrow Wilson School of Public and International Affairs, one of the nation's most prestigious public policy schools.

The school, named after the former Princeton and U.S. president, was founded in 1930. Its graduates include Senate Majority Leader William Frist (R-Tenn.) and numerous diplomats and ambassadors. The Robertsons' gift, to be used to train international diplomats to work in public service, was at the time the largest ever given to an American university by an individual party.

The donors kept their identity and that of the foundation secret for nearly a decade. The family finally acknowledged its donation after Marie's death in 1972, partly to quash rumors that the mysterious "X Foundation" funding the school was the CIA.

Through the decades, the Robertson Foundation had been run by a board of three family members and four university officials. Under their management, the gift has grown to $600 million.

Starting in the early 1970s, however, the family began clashing with Princeton over the number of international-relations professionals being produced by the school.

The Robertsons said Princeton was ignoring the mission and using the endowment as a "slush fund" for other projects. Though three family members sat on the board, the lawsuit contends Princeton officials misled them on how money was being spent.

The breaking point came when Princeton officials moved to bring in the university's investment company, PRINCO, to make investment decisions for the endowment, replacing William Robertson and two other board members.

William Robertson, his two sisters and their cousin filed a lawsuit in 2002 demanding the university give back their family's gift.

Princeton officials denied any wrongdoing and said they were honoring the Robertsons' wishes and even giving the family more control over money than required.

Princeton argues in court papers, "The university trustees have done their utmost to respond to the family trustees' requests for information, suggestions for changes in operating procedures and expressions of concern about the foundation's mission."

But William Robertson compares Princeton's actions to the corporate misdeeds of Enron and said his parents would have been horrified.

"I have been amazed by the amount of the misappropriated funds, the university's complete disregard for the mission of the foundation and the resentment shown toward donors," Robertson said. "My parents were betrayed."

McDonough, Princeton's general counsel, said the case is deeper than just a rich family fighting with a rich university. There are serious questions about who controls charitable donations, "issues that touch upon academic freedom, public service, corporate governance, institutional governance and fiduciary duties."

LEGAL ARMY Private giving is a serious, though secretive, business at the nation's colleges and universities. Princeton, which has an $8.7 billion endowment, is one of the best in the country at attracting gifts from wealthy alumni. Its last capital campaign, which concluded in 2000, attracted more than $1 billion in donations over five years.

At public and private colleges, donations fund everything from new buildings to professors' salaries and students' scholarships. Skirmishes between wealthy donors and university officials are rare but not unheard of.

Few, however, make it to court.

Last year, Boston University agreed to transfer a businessman's $3 million donation to two charities rather than face a lawsuit. The donor, David Mugar, had been feuding with school officials over refurbishing a campus library named after his grandparents.

For Princeton to give the money back to Robertsons would be unprecedented and could open doors for similar requests.

Princeton President Shirley Tilghman has been adamant that the Robertsons' gift belongs to the foundation run jointly the family and the university, and that the late donors' relatives cannot unilaterally dictate its fate.

The two sides are now in the discovery phase of the case, which is tentatively due to go to trial in March 2006 in the Chancery Division of New Jersey Superior Court in Mercer County.

Last month, the court ruled the Robertsons could amend their original complaint to add fraud charges, opening the door for the family to sue for millions of dollars in punitive damages in addition to the return of the $600 million.

The family has not alleged any criminal wrongdoing, but Seth Lapidow, an attorney for the family, said a copy of the lawsuit was sent to the state attorney general, who is routinely kept up to date on cases involving charities.

For now, a small army of lawyers is sorting through 40 years of documents and correspondence and questioning dozens of current and former Princeton administrators who have been directly or indirectly involved with the endowment.

"This is serious business. We're arguing about a corpus of $600 million and what we believe is fraud going back to 1961," Lapidow said. "Its scope is vast."

McDonough, Princeton's general counsel, called the discovery period "very intense and aggressive." The university brought in one of the state's top law firms, Lowenstein Sandler in Roseland, to handle the litigation.

Meanwhile, the business of managing the endowment continues. University officials and family members still meet every few months to make decisions about the money, which continues to fund the day-to-day operating expenses at the school.

The closed-door meetings, according to both sides, are tense and swarming with lawyers.

INTERESTED SPECTATORS Princeton officials won't say what will happen if they lose the money. The Woodrow Wilson School of Public and International Affairs, which enrolls about 170 graduate students, relies on the foundation for about 70 percent of its operating budget, according to the lawsuit.

Princeton could dip into its ample endowment or find another benefactor, but it would be difficult to match the Robertson fund.

Should Princeton lose, William Robertson said, the family is more than ready to give the foundation's money to other universities willing to use it to train foreign diplomats.

Perhaps not surprisingly, Robertson said, "a couple of schools have approached me."

He declined to elaborate.

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