Thursday, February 11, 2016

Alumni insiders back Penn State slate vs. PS4RS insurgents

Business backers rally to reclaim board

Alumni insiders back Penn State slate vs. PS4RS insurgents

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Julie McHugh, Endo Pharmaceuticals´ president.
Julie McHugh, Endo Pharmaceuticals' president. DAN Z. JOHNSON / File photograph

Julie McHugh, who recently stepped down from the chief operating officer post at Chester County-based Endo Pharmaceutical Solutions "to spend more time with my family and my philanthropic interests," is one of the candidates backed by the Upward State group, started by three past Penn State alumni association presidents. Her fellow ticket members are Hilton Hotels hiring chief Matt Schuyler and PwC consultant Dan Cocco. Polls open April 10, close on May 9, for alumni. 

They are running against, among others, three endorsed by Penn Staters for Responsible Stewardship,(PS4RS), which blames Penn State's board for agreeing too quickly with the Louis Freeh report blaming ex-President Graham Spanier and late football coach Joe Paterno for the sports-made environment that led to the Jerry Sandusky child-rape scandal and costly NCAA sanctions. PS4RS has endorsed ex-Sallie Mae CEO Albert Lord, ex-State Sen. Robert Jubelirer and St. John's U Prof. Alice Pope (spelling corrected).

PS4RS has won seats in (corrected) the last two board elections and is pushing to reconsider the Freeh report, roll back sanctions, and change the way the Penn State board is chosen (several members by the Governor, six by business groups, six by farm groups, nine elected by alumni -- a good thing, says McHugh, because grads "have a deep affection for the University and an important perspective.") Lord, one of the few insurgents who's run a big company (and its board) in real life, says he's also focused on Penn State's future, its relentless expenses and declining affordability.

That's the Upward State party line, too. McHugh's group represents a reaction to the PS4RS reaction: "We're trying to represent a more positive point of view," she told me. "As trustees, we want to get the dialogue focused on what's going right at the University and get the dialogue away from the backward-looking negative dialogue of the past two years that isn't serving anyone."

Some change is needed, she agreed: more "transparency in dialogue between the board and (Penn State) constituencies" so alumni and students understand what they're up to, and "much more focus on the University" and fiscal challenges such as "affordability."

What else? 78% of the Penn State budget comes from tuition -- an "incredible value" for some students but hard to raise for many others, McHugh says.

What to do about the financial squeeze? Penn State need more taxpayer aid? State subsidies have been going "the wrong direction," McHugh says, and she plans to lobby for more: College aid offers "a pretty solid return on investment" by taxpayers.

Maybe the school needs more emphasis on new online classes, at least for adults -- but not as a replacement for existing brick-and-mortar classes, she added -- though she noted incoming Penn State President Eric J. Barron has a reputation as a cost-cutter and her group could welcome "restructuring" if it comes from Barron's admistration.

How's the endowment doing? McHugh says she's looking forward to learning more about that, now that the University is coming to the end of its latest $2 billion capital campaign. "A lot of alumni associate philanthropic opportunity with (their) name on a buidling," she told me. There should be more credit given to building the University-wide endowment and "increasing student aid. Philanthropists don't necessarily need a building in their honor."

How far should alumni trust their past officers and allies like McHugh to light the way? The Penn State Alumni Association benefited from Paterno-era arrangements: the Association raised more than $30 million in the 1990s-2000s by selling its membership lists to MBNA Corp., the credit card bank where Freeh worked before he wrote the Freeh Report. MBNA was headed by Freeh's friend Ric Struthers, a Penn State grad and booster who was also the most prominent national businessman on the board of Sandusky's nonprofit organization, the Second Mile, which was mostly spared the Freeh report's attacks. (McHugh told me she didn't know much about that and it's not what she's focused on.). More here.

McHugh and her supporters are betting Penn State grads have had enough looking back at embarrassing times and are ready to move forward, supporting President Barron, and pointing out how popular and prosperous Penn State remains.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

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