A couple of days ago, in the course of surveying the grotesque spectacle of the three for-profit Infilaw law schools gorging themselves on hundreds of millions of dollars per year in federal student loans, I asked if being a traditional non-profit organized for “charitable” (501(c)(3) qualifying) purposes provided any meaningful ideological constraint in regard to ripping off the public fisc while the getting is good.
Let us take a guided tour on the wrong side of the East River, courtesy of Matt Leichter:
Freestanding Brooklyn Law School is selling six of its student dormitories due to declining enrollment. According to the Brooklyn Daily Eagle it’s unclear if the sale has reached agreement yet, though Brooklyn Law School (BLS) dean Nick Allard says it has. The purchase price is $36.5 million, and amusingly the city just assessed the properties’ combined market value at less than a third of that. . .
None of these numbers really matter since BLS availed itself of a student dormitory property tax exemption. The six properties could have been worth hundreds of millions and nary a dime would’ve been collected by the public—unless it got sick of subsidizing housing for law students whose odds of working in full-time, long-term, bar-passage-required jobs nine months after graduation were about even. In the last two years, one in five BLS grads was “unemployed-seeking.”
Leichter goes on to document how there’s a striking correlation between the federal government making unlimited amounts of GRADPLUS loans available to pay for post-graduate student living expenses and BLS jacking up its estimates of how much it costs to live in the very dorms it pays no property taxes for owning (the school will rent a student a one-bedroom in its dorms for $20,000 per year, electricity and wireless access not included).
Leichter also points out that BLS has horrible employment statistics (more than one in five graduates in the last couple of classes have been completely unemployed nine months after graduation, and only half the class is getting a legal job of any kind).
In addition to its success as a landlord to soon to be un-and-under-employed law graduates, BLS charges more than $50K per year in sticker tuition, which in FY2012 generated $65 million nominal dollars, and $40 million net dollars (after discounts). Into what personal rivulets is this glorious stream of taxpayer-funded rents being diverted?
In FY2012 the school (more precisely the school’s students, largely via taxpayer dollars) paid President and Former Dean Joan G. Wexler Esq. $1.3 million for her service to this tax-free charitable enterprise. BLS’s students and U.S. taxpayers provided Wexler Esq. with “a tax-free furnished apartment complete with designer kitchen and skyline views of Manhattan, a car, and a driver,” per a complaint filed by a non-gruntled faculty member.
But Wexler was far from the only BLS employee who was doing very well by doing good. At least a half dozen faculty members were pulling down in excess of $300,000 per year in compensation, topping out at the $420,000 paid to Aaron Twerski, a 70something former Hofstra Law School dean and current part-time lawyer who has published almost nothing since the Clinton administration, but who is clearly what in a related context would be known as a connected guy.
Update: Eric S. Riley, Communications Director at Brooklyn Law School, has asked me to correct this post to reflect the following:
• Since 2001, Professor Aaron Twerski has published 19 law review articles (either authored or co-authored).
• These articles have appeared in the Yale Law Journal, Cornell Law Review, Columbia Law Review, and the University of Michigan Law Review, among other prestigious journals.
• In addition, since 2001 he has co-authored two casebooks on Torts and Products Liability (Aspen Casebook Series).
For reference, one look at Professor Twerski’s bio reveals his many publications, honors, and other distinctions.
(My mischaracterization of Prof. Twerksi’s publication history was based on the fact that as of three days ago, the publications page on his faculty bio did not list any articles published after 2003. It has since been updated).
All of this suggests the answer to my initial question is, “in the new Gilded Age, not much.”