Harvard U. and Justice Dept. Agree to Settle Lawsuit Over Russian-Aid Project By ERIC WILLS
Lawyers for the U.S. Department of Justice, Harvard University, and two other defendants reached a tentative agreement on Monday to settle a civil lawsuit in which the university, a professor, and a staff member were accused of conspiring to defraud the federal government through a program intended to help Russia make the transition to a market economy.
It is unclear how much money Harvard or the two men will pay, or if the defendants will admit wrongdoing, according to a spokeswoman for the U.S. attorney's office in Boston. Details will be made public within 60 days after an agreement has been signed, she said.
A federal judge ruled in July 2004 that Andrei Shleifer, then as now an economics professor at Harvard, and Jonathan Hay, at the time a staff member, had invested and helped their wives invest in Russian companies while serving as managers of a project for the Harvard Institute for International Development.
The project was designed to aid the building of a capitalist economy in Russia and was financed by the U.S. Agency for International Development. The investments made by the two men and their wives created a clear conflict of interest, said Judge Douglas P. Woodlock of the U.S. District Court in Boston.
The judge also ruled that Harvard had violated its contract with the federal agency. But he dismissed the more serious charge that the university had knowingly committed fraud.
Under the judge's ruling, Harvard could be held liable for as much as $34-million. The two men could be liable for as much as $102-million.