Patrick T. Harker PhD, the former Wharton dean who is President of the University of Delaware, is leaving the Newark school July 1 to serve as President of the Federal Reserve Bank of Philadelphia, the bank's board of directors (Harker is a member and his colleagues, led by investor James Nevels and Comcast CFO Michael Angelakis, chose him) and the Fed Board of Governors in Washington said this morning.
The move will give Harker a voice, on a rotating basis, in interest-rate decisions in Washington. As President of one of the smallest of the 12 Fed districts around the country, Harker will also be in charge of taking the pulse of the Philadelphia-area economy (for the Third District Fed region: eastern Pa., South Jersey, Delaware), and reporting it to chairman Janet Yellen and other Fed officials. The Philly Fed also has a staff of bank examiners, though no major banking companies are still based in the district. The Philly Fed board hopes Harker will also prove a unifying leader for the region's often fractious business and government.
Harker's predecessor at the Philly Fed, Charles I. Plosser, ended his term March 1. Plosser, a leader of the Shadow Open Market Committee of free-market economists, was a professor at the University of Rochester, who argued for a limited and well-structured role for the Fed. While most of his colleagues sought ways to revive the stalled economy in the late 2000s, Plosser warned his colleagues against the danger of inflation, which largely failed to materialize during Plosser's term.
With Harker, Fed directors are signalling their interest in putting a well-connected, local, public figure with a record of engaging with government and the private sector into the bank's top role. Harker's "deep roots in the region, his distinguished career in academia, his drive for innovation, and his passion to make our region an economic engine for the future truly impressed our board," Philadelphia Fed board chairman Nevels, founder of the Swarthmore Group, an investment firm, said in a statement. Plosser's predecessor, Anthony Santomero, was like Harker a Wharton professor.
On Harker's watch, UD sought to grow beyond its traditional strengths in chemical engineering, accounting and art -- programs the state of Delaware's long-dominant DuPont Co. and du Pont family had supported over the years, and which also expanded under Harker -- to increase its focus on nursing and health-related fields (including through an alliance with Philadelphia's Thomas Jefferson University; there is no medical school in the state of Delaware), business technology (including a close student-intern and graduate-recruiting relationship with JPMorgan Chase & Co., now Delaware's largest corporate employer), green energy, start-up companies and security technology. He also oversaw construction of a $200 million engineering building and expansion of the Lerner business college.
Harker considered adding a law school, a move that was opposed by legal prominenti tied to Delaware's Widener Law School and a part of the state's influential legal establishment, and was effectively stopped by the 2008 recession. Harker advocated improvements to Newark's modest Amtrak and Septa train station, which he hoped will attract Maryland commuter trains that would put Delaware in easy reach of the military's Aberdeen Proving Grounds and other government employers where UD sought research and development contracts and graduate recruitment. Last week the Wilmington News Journal reported a "tentative agreement" to spend $35 million upgrading the station.
Harker helpled lead UD's acquisition of the former Chrysler plant adjoining the campus; on his watch UD moved nursing and technology programs to the former office in the northeast corner of the ex-Chrysler ground, and debated additional uses for the site, which Delaware Gov. Jack Markell saw as a home for industrial employers. Harker agreed to consider a data center project that was backed by Markell, but the large natural-gas-fired power plant attached to the center provoked unanimous faculty senate opposition, and Harker's administration ended up scuttling that plan, whose backer is now suing the university.
His ambitions for UD faced institutional limits on borrowing, which, Harker said in a 2013 interview, drove him toward corporate partnerships. A column Harker published in the Inquirer last month was criticized by the UD faculty union for suggesting universities need to cut costs and add standardized online courses.
"Managing a University is not an easy task. He's made his mark. It's not surprising a person at that level is changing jobs," State Sen. Greg Lavelle, leader of the Republican minority in Dover and a graduate of Delaware and Penn, told me. As always in such case, "some people will be glad, some will be sorry he's leaving."
Ted Peters, retired chairman and ceo of Bryn Mawr Bank Corp. who served on the Fed board until the end of last year and now runs the Bluestone Financial Institutions Fund, which buys bank stocks, called Harker a "terrific choice," combining "high intellect and financial expertise" with "the practical experience of running a large state university. His integrity is unquestionable, and as a member of the FOMC will do the right things for the right reasons."
As with Penn State in Pennsylvania, the state of Delaware supplies something under 20% of UD's yearly budget of nearly $900 million, and legislators often press the school to admit more Delaware residents (it is already cheaper and less selective in-state than for out-of-state residents), and UD sometimes provides a convenient target for elected officials.
Said Gov. Markell in a statement: "President Harker's tenure has been marked by progress in areas most important to building a stronger economy and workforce. I look forward to working with the university's next president to build on these achievement and to continue pursuing greater educational and economic opportunities for the people of our state."
Harker holds professorships in business administration at UD's Lerner business school, and in civil engineering at UD's engineering college. He moved to UD in 2007 from Wharton, where he was Reliance Professor of Management and Private Enterprise and had served as dean since 2000. At Wharton, Harker told me, his students included future Tesla founder Elon Musk and other latter-day captains of industry. Harker also had served as acting chair of Wharton's operations and information management department.
Harker is a director of Pepco Holdings Inc., the utility company that owns the former Delmarva Power & Light Co. in Wilmington, and Huntsman Corp. (chemicals), whose founder, Jon Huntsman, is a Wharton grad and namesake donor of the building hosting Wharton's MBA program. Harker is also on the board of advisors for Decesion Lens Inc. Harker has a Ph.D. in civil and urban engineering (1983), a master's in economics, and masters and bachelors (1981) degrees in engineering from Penn. He worked as a consulting engineer, and spent a year as a special assistant to the FBI director under President George H.W. Bush. He's a graduate of Gloucester Catholic High School in South Jersey.
-- Joe D.:Full disclosure: I have three