The IRS is now investigating the pay that those at Harvard Management earned, while being a tax-exempt institution. Jack Meyer, Harvard Management head from 1990-2005 earned as much as $7.2 million a year, and some folks got $35 million.
Furthermore, Harvard set up staffers with their own management firms; and then they "farmed out business to them."
And then, Harvard, which had jammed their endowment with hedge funds, put the income in offshore entities, so it wouldn't be subject to UBTI-(unrelated-business taxable income.) Why was that important? Because what hedge fund doesn't use leverage? Thus the offshore entity to avoid paying UBTI because debt financed income isn't excluded.
A whistleblower resigned from Harvard in 2001, because of the UBTI, and sent his concerns to Larry Summers, and now that Harvard's endowment has taken a dump, the whistleblowers want the spotlight, so they can pretend they are the next endowment Markopolos.
But does anybody really think that Harvard hasn't lawyered up these concerns?
And these concerns will soon fade, because the markets aren't.