Trustee and eBay CEO Meg Whitman '77, whose $30 million contribution to the University will support a sixth residential college, urged seniors to maintain their integrity and serve their communities during her address to the University in June as Baccalaureate speaker.
"Your school, your community and your country are relying on you," she said. "One check I have used in making all kinds of decisions throughout my professional career is to ask myself whether I would be proud for my mother to read about it on the front page of the next day's New York Times."
Whitman now has found herself amid allegations in the news that she gained special access to and quickly made profits on initial stock offerings because of eBay's banking relationship with Goldman Sachs, prompting authorities to investigate and business ethicists to ask questions.
Maintaining the behavior was not illegal, the House Financial Services Committee alleged Wednesday that Whitman was among 23 executives who got access to and made quick profits on initial public offerings of stocks because of their firms' ties to investment banks.
Reached at home yesterday, Whitman declined to comment on the allegations.
The University also declined to comment on the House allegations.
But though the Whitman situation is not "the same as going and stealing from kids' lunches" and then giving the money to the University, it still generates ethical questions, said William Black, a scholar at the Markkular Center for Applied Ethics at Santa Clara University.
The House allegations do not seem to have affected the plans for Whitman College. The University still expects to open the college in 2006, said Robert Durkee '69, vice president for public affairs.
The University has faced ethical issues with contributions before. In 1999, Gordon Wu '58, who pledged $100 million to the University, raised eyebrows when the University followed his advice to buy stock in a company at which he held a top post and had a large investment. Officials said that even though his investment advice was not immediately profitable, it was ethical.
Indeed, before accepting donations, the University scrutinizes contributors, though it does not have a policy on returning gifts, said Lauren Robinson-Brown '85, communications director.
"We don't have a written policy regarding returning contributions," she said. "Decisions would be made on the facts and circumstances."
"There are many policies about accepting gifts," she added, saying they are spread over various departments in the fund-raising office.
SEC chair Harvey Pitt and N.Y. Attorney General Eliot Spitzer '81 announced in a statement Thursday "a joint effort to bring to a speedy and coordinated conclusion the various investigations concerning research and IPO allocations."
The House committee alleges that eBay paid Goldman Sachs $8 million for banking services and that Whitman got access to and made profits on 100 IPOs, said Peggy Peterson, a committee spokeswoman. In contrast, the committee said average investors who later bought the stocks usually garnered only losses.
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