Author: Scott Weaver

When The New York Times revealed Virginia Commonwealth University’s secret deal with Richmond-based Philip Morris USA, the story surely sent a shiver through other universities. In exchange for undisclosed millions, VCU agreed not to publish—or even discuss—research without the company’s approval.

In the story, Senior Vice President Rick Solona said that Philip Morris had similar arrangements with other universities. He didn’t, however, name any other names.

UVA spokesperson Carol Wood says that UVA isn’t one of those universities.

“Our agreement strongly encourages the University of Virginia to publish the results of research before sharing the results with Philip Morris,” she says. The agreement does stipulate that UVA attribute the funding source for its research.

Wood says that she was contacted by The New York Times prior to the story’s publication. She walked the reporter through the University’s agreement with Philip Morris. UVA wasn’t mentioned in the story.

But that doesn’t mean UVA won’t take Philip Morris’ money. In Febuary 2007, UVA announced a $25 million gift from the tobacco company, the largest single corporate gift at that time. In accepting the donation, President John Casteen said that the gift built on an existing relationship between Philip Morris and UVA.

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For three days in September, Charlottesville will become ground zero for finance leaders from around the world. This fall, The Miller Center of Public Affairs will host “The New Financial Architecture: A Global Summit” on September 7 to 9.

Miller Center Director and former governor Gerald Baliles announced the summit May 29 as part of an event during which he interviewed John Snow, former treasury secretary under the George W. Bush administration.

Snow, who holds a Ph.D. in economics from UVA, is now the chairman of Cerberus Capital, a private-equity firm that made headlines last year when it bought a controlling stake in Chrysler for $7.4 billion. He will host more than 12 former financial ministers from Europe, Asia, Africa, South America and the Middle East.

The summit, which will be covered by CNBC, is scheduled a month prior to the fall meetings of the World Bank and International Monetary Fund. At its conclusion, the summit participants will issue a joint statement that assesses global economic challenges, as well as offer ways to address them.

The group, which Baliles said represents three quarters of worldwide economic activity, will focus on the issues involved with Sovereign Wealth Funds, changes in the world economic power and influence, the subprime crisis, the credit crunch and the future of the new financial architecture. Both Baliles and Snow said that financial leaders will come unfettered by their former official government positions, and therefore will be able to address these issues in a more open and honest way.

After the announcement, Baliles tossed Snow a number of questions that more or less served as a promo for the coming summit. And one of the issues that Snow tackled first was the subprime crisis and credit crunch, briefly describing how risk for loans was chopped up and distributed widely, to the point where people aren’t even sure who services their loans.

“Low and behold,” said Snow, “somebody woke up and said, ‘I’d like to get paid.’ Now we’re going through a huge correction that won’t end soon.”

Snow placed the majority of blame on the banks for not having the risky loans on their books, and therefore having little incentive to make sure the loans could be repaid. “My suggestion,” he said, “is to require the banks to keep some skin in the game.” Snow advocated banks keeping roughly 10 to 20 percent of risk from loans on their books.

Snow pointed to one common factor in the bundle of economic problems that the global economy is facing: the growth of China and other developing economies. He called China’s economic transformation, which in the last decade has created a giant middle class of more savvy and rabid consumers, the largest in the history of the world. And one of the commodities that the U.S. finds itself competing against China for is oil.

When Baliles asked Snow if he saw a bubble in energy prices (one that might burst soon and send gas prices down), Snow said that we’re stuck with the ever-rising price of energy commodities for the foreseeable future. Instead, he said, high prices will invite changes in behavior and new technologies.

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Feel free to insert a corny “Georgia On My Mind” reference here: UVA continued its role as tennis whipping boy to the University of Georgia. In the NCAA men’s semifinals tennis championships in Tulsa, Georgia knocked the Cavaliers out of the NCAA tournament with a 4-3 victory, the first and only loss of UVA’s season.

Based on performance, Somdev Devvarman, the reigning NCAA singles champion, is the best men’s tennis player to have ever worn a UVA uniform. By press time, he was still competing for the NCAA singles and doubles championships.

Last year, UVA was booted from the tournament at the hands of Georgia—just like the year before. This most recent defeat made for 14 consecutive losses to the Bulldogs.

The loss capped the best season in school history. UVA finished 32-1 and reached the tennis equivalent of the Final Four for the second straight year. In February, the Cavaliers won the National Team Indoor Championship. They spent the year ranked as the No. 1 team in the nation.

Heap onto that accolade pile its fourth ACC championship in the last five years and you get just the sort of high expectations that were dashed, once again, by Georgia.

UVA’s season came down to the last match. Georgia’s Jamie Hunt came from behind to beat UVA freshman Sanam Singh in a match where Singh was dogged by cramps.

After the loss, UVA Coach Brian Boland looked at the loss in terms of the future.

“This is tough to swallow, and we’ll see what Virginia is made of as we move forward, particularly that young man, Sanam Singh,” he said. “For anyone that knows him, this is very painful for him. He is one of the finest young men you’ll ever meet, and I know this is very difficult for him.

“We’ll see how tough he is.”

On May 20, Boland was named National Coach of the Year. Senior Somdev Devvarman, who spent the season ranked No. 1 in both singles and doubles with partner Treat Huey, was named National Senior Player of the Year.

“This is obviously not how we wanted it to end,” said Devvarman. “It’s just unfortunate for us, but like coach said, you can’t take away anything that we have achieved this season.”

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When Vice President and Chief Human Resource Officer Susan Carkeek stood up in front of a crowd of UVA employees to tout the University’s new human resources plan, she had to make one tough sell. Despite a lot of talk and info gathering, precious little was known about the plan prior to that May 22 meeting. And even afterwards, staff still had plenty of questions about a system that hasn’t been fully fleshed out.

Since UVA was granted more autonomy from the state in 2006, the University has had the option of two HR systems—the state system, and a new University system as yet undefined. Hence the “town hall” meeting in Newcomb Hall, which served as the kick-off to a review period of high concepts of the new HR plan that is still in development.

New workers hired after July 2006 will be automatically switched to the new HR system, slated for implementation in January 2009. The majority of UVA staff, however, must ponder a large and confusing decision of whether to switch to a new program about which they know precious few details. Come October, over 3,500 employees will each have to decide whether to switch to the new University HR plan or stay in the existing state system, known as the Classified plan.

An undercurrent of skepticism ran through the hour-and-a-half meeting, with staff members asking pointed questions about the funding of the new plan, employee leave and a written guarantee that salaries wouldn’t drop.

“When I look around the room,” said UVA staff member Michael Kidd, “I see people I’ve know for the last 14 years. A lot of them have been here a lot longer than I have. And they’re worried.”

“Slowly but surely, you’re going to see benefits decrease for University staff,” predicts UVA employee Brad Sayler.

In October, employees will have 90 days to enroll. Under the restructuring legislation, UVA must open the option to enroll at least every two years, though Carkeek suggests that enrollment periods could come more frequently.

“If people are not convinced in this 90-day period,” she says, “and they want to wait and see what it looks like, then they’ll have a chance.”

On the HR website, the University touts the new system’s “Career Paths” for providing pay based on capability, performance and market rates, eliminating “restrictive salary rules.” The implication is that under the new HR system, which boasts “market-relevant salary ranges” and is free from the old system’s pay bands, employees would see an increase in pay.

But UVA staff member Brad Sayler asked Carkeek how the University planned to fund this part of the system. Carkeek told Sayler that there is no plan to budget more money for the new system.

“It’s a matter of what we do with the funds we have now,” Carkeek says. She points out that roughly 70 percent of UVA’s budget goes to human resources. “As it grows—and it is growing—those are the funds that we’ll use.”

Sayler and others are concerned that once UVA has workers locked into the new plan, the University will begin to slowly roll back benefits, leave and possibly pay.

“These Career Paths are the carrot that they’re dangling in front of us here to get as many people as possible to switch over to the new University system,” says Sayler. “What I think will happen…and it won’t happen in one or two years, but the University has a consistent history of making small, incremental changes that, taken over the long term, amount to a huge change. Slowly but surely, you’re going to see benefits decrease for University staff.”

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