Larry is a Busy Man

I spent part of yesterday in a discussion with my faculty colleagues in computer science about how we could mount a new course. An unusual opportunity had arisen and several professors were interested in helping out with it but everybody is overbooked. We are enjoying huge student interest in our field, but the size of the faculty has not increased in proportion, so between undergrads, PhD students, proposal writing, and committee work, people are out flat. 

Then a little further down in my inbox was a Bloomberg Businessweek article about the wealth Larry Summers accumulated during the period from 2001 (when he stepped down as Treasury Secretary and, five months later, became president of Harvard) and 2009 (when he became Director of the National Economic Council). The change in net worth, from less than a million dollars to somewhere in the $17-40 million dollar range, is based on comparison of the disclosures he filed when he became Treasury Secretary in 1999 and his 2009 appointment to the Obama administration. That appointment ended December 31, 2010 and Summers has been back to consulting since then--we know of some of his activities but not how his wealth has increased in the past three years. (We would find out, i suppose, if he were nominated to be head of the Fed and had to do another disclosure.)

How did he make all that money? For five of those years he was President of Harvard. Now the president of Harvard used to stay away from outside commitments, compensated ones at least, but there is at least one report that Summers was an advisor to a hedge fund, Taconic Capital, while he was serving as Harvard president. Perhaps there were others; no way to know for sure. But let's assume that most of the moneymaking happened after he left the presidency, that is during the years 2006-2009.

Here are the consultancies we know about from the Bloomberg story: Citigroup, Nasdaq OMX, DE Shaw (from which he earned $5.2 million in 16 months as "managing director"). He also earned $2.7 million in speaker's fees, from Goldman Sachs and others. That is all prior to 2009.

Since the beginning of 2011, his consulting clients include Citigroup, Nasdaq, D.E. Shaw, and Andreessn Horowitz. He is also back on the speaking circuit.

Now the Bloomberg article focuses on the question of whether we should be worried that Summers' sympathies as a powerful federal official might just be influenced by the cozy and profitable relationship he has developed with these firms. Damned right we should be, especially given his poor track record in getting the very idea of a conflict of interest. 

But my question today is different. Why does Harvard put up with this level of outside activity? The consulting and speaking activities are not the only one he has picked up lately. He joined the boards of electronic payment service Square and person-to-person lending company Lending Club. He chairs the advisory board of online education company, the Minerva Project, is a member of the board of governors of the Broad Foundations, and is a director of Teach for America. I got tired of chasing these down one at a time and just stole the rest of the list of board memberships from his for-profit web site, larrysummers.com:

At Harvar