One of Gerald Cassidy's biggest clients became one of his best friends -- John Silber, the long-time president of Boston University. Ultimately, the friendship led both men into an embarrassing public debacle.
By Robert G. Kaiser
Relationships between lobbyists and their clients are usually just business arrangements. Occasionally, they blossom into something much richer and more complicated.
Such was the case between John R. Silber, the driven president of Boston University for a quarter century, and Gerald S.J. Cassidy, who has helped BU win earmarks from Congress worth more than $100 million in exchange for as much as $15 million in fees, including nearly $1 million last year.
John Robert Silber is one of a kind, and the kind has no name. He is a smallish man who, at age 80, still radiates energy, determination and an argumentative self confidence. His most striking physical characteristic is his abbreviated right arm -- because of a birth defect it ends where most people have an elbow. His suits and shirts are altered so the stump is always visible.
Silber is a Texan with an unusual Texas pedigree. His father was born and trained as an architect in Germany; he emigrated to the United States early in the 20th Century. He married an American schoolteacher, and they made their home in San Antonio. John was the younger of their two sons. When the Great Depression destroyed Paul Silber's architecture practice, the family lived on the paltry teacher's salary of his wife. They had to move several times to ever-smaller homes. Silber's childhood mirrored Cassidy's: Both grew up in poverty.
Starting college at 16, Silber charged through academia, acquiring a PhD from Yale in philosophy, becoming the dean of arts & sciences at the University of Texas. In 1971, he became president of Boston University. From the outset, he was determined to transform the third-rate institution then crowded into a homely campus along the Charles River.
Silber, as he explained in an expansive interview, believed that federal support for specific university projects could help him fulfill his dreams for BU. He copied the University of Texas by opening his own Washington office with three employees. "It was worthless. The person in charge didn't know how to do it . . . and I'm paying a quarter of a million dollars a year . . . and I'm getting nothing for it."
He had watched Schlossberg-Cassidy win federal grants for two other Boston universities, first Tufts, then Boston College. Why not BU? In 1981, Silber hired the lobbyists. Kenneth S. Schlossberg recalled that Silber signed a two-year contract, agreeing to pay them $250,000 a year. "He made a point of slipping it into his drawer and saying 'nobody knows about this but us,'" Schlossberg said. [See comments from Silber and Schlossberg below, and a response from Kaiser.]
First they helped Silber get control of an old National Guard armory on the edge of BU's campus from the state and federal governments. Next came two federal earmarks totaling $27.5 million to build a new center for science and engineering, one of the biggest earmarks won by a university in the 1980s.
With that facility, Silber said, "we were able to recruit . . . five brilliant physicists who brought in by themselves five million dollars a year in grants and contracts. . . . So you had a mushrooming effect. Once that was done we started recruiting people in chemistry and biology who never would have come, and engineering. . . . Then we followed that with a grant for the engineering school, and we followed that with the Photonics Center [a grant of $29 million in 1992, an earmark in the Defense Appropriations Bill]. So it has been one thing after another that have allowed us to develop into a major scientific and engineering center, which Boston University simply wasn't before. Then you've got a person like Shelly Glashow, who's a Nobel prize winner at Harvard [who joined the BU faculty in 2000]. . . . No professor at Harvard leaves Harvard to come to Boston University unless it were excellent. And it wouldn't have been excellent except for these facilities we were able to build through these congressional earmarks."
Had Silber ever done a "cost-benefit analysis" of paying millions of dollars for lobbying over the years?
"We did," he replied emphatically, picking up a little calculator from his desk and punching numbers into it. "Now if you take $27 million," the amount of that first grant for the science and engineering building, "that would bring in, at five percent [interest], about $1.35 million a year. On average we've always been able to get at least five percent interest rate on our money. So just take that first $27 million and regard it as an endowment. That endowment generates $1.35 million every year, and Gerry [Cassidy] at that time was billing us about $300,000. It's gone up since then to about $500,000. That first grant, by itself, produced about twice as much as was necessary [to pay for all of BU's lobbying]. . . . So if you talk about a cost analysis, it's a damn good investment."
Silber, now retired, understated Cassidy's rates; in 2006 BU will pay the firm $960,000. But his point remains accurate. That first $27.5 million earmark is twice as much as the total BU has paid to Cassidy & Associates over 25 years. According to the firm, it has helped BU win $106.1 million in earmarks from Congress in that period.
As he built BU, Silber pursued his ambitions beyond its campus. He became active in politics, and in 1990 ran for governor of Massachusetts as a conservative Democrat; Republican William Weld beat him. In 1996, Silber became chancellor, a new title for BU, and turned over the presidency to a hand-picked successor. The successor lost the trustees' support, and in 2002 Silber was brought back to run the university again.
This time he wanted to find a successor who could effectively fill his shoes. At 76 he was too old to be running a big university. He led a search with a group of trustees. One of them, David D'Alessandro, recalled that Silber wanted "a younger version of himself: a hard-driving visionary who thinks differently, not afraid to be confrontational, intellectually superior, the courage to deal with difficult circumstances, the ability to take enormous risks -- that's pretty much it. Even with a DNA match it would be hard to find."
Prof. Lawrence R. Sulak, chairman of BU's physics department and a Silber ally, was a faculty member on the search committee. He advanced the name of Daniel Goldin, who had been the director of the National Aeronautic and Space Administration (NASA) from 1992 until 2001.
Silber was intrigued. Goldin was a hard-driving executive with a reputation for toughness. Silber consulted one of his newest trustees, a man who had joined the board in January 2003: Gerald Cassidy.
The two men had a long history of collaborating on business ventures. Five years earlier, when Cassidy tried unsuccessfully to take his lobbying firm public, Silber had agreed to serve on the board of the public company, which never came into existence. The two also invested together in a biotech firm called Seragen. Silber had put $25 million of BU's money into the firm, which never made any money. These investments led to lawsuits against both men by disgruntled stockholders. A judge in Delaware entered a decision against them last year.
Episodes like the Seragen gambit, aggravated by Silber's bullying self-confidence, made him controversial on his own campus, but his trustees, most of whom he had hand picked, continued to support him. He had a higher salary and more benefits than most university presidents.
Goldin, it turned out, was both a friend and a paid consultant of Cassidy's; their wives were pals. Cassidy had "frequently advised him on political matters" as Cassidy put it, when Goldin was at NASA. Silber used Cassidy as an intermediary to arrange a telephone conversation with Goldin.
"The conversation must have gone well," Cassidy recounted, "because Dan agreed to go up there and visit with John and meet some faculty. . . . Both of them asked that I accompany him."
Suddenly, Cassidy found himself playing a central role in a drama that promised a happy ending indeed for BU's longtime lobbyist -- replacing one personal friend with another in the university's presidency. Cassidy told Lester "Ruff" Fant, his longtime lawyer and close associate, "I've found the perfect person for BU," Fant recalled.
From the outset Goldin's candidacy divided the BU faculty; scientists and engineers generally supported him, but many professors in the humanities considered him inappropriate. He had no academic credentials and only a bachelor's degree himself. He had worked for 25 years for the defense contractor TRW before joining NASA, where he succeeded at cultivating the politicians on whom the agency depended, but he had a mixed record administering space projects.
Cassidy served as Goldin's personal envoy, in effect, to the BU board. "He had his own shill on the board," said trustee D'Alessandro. Trustees remember Cassidy pushing Goldin in their meetings and in individual conversations. "You'd be lucky to get him," D'Alessandro remembered Cassidy telling the group. But as the process continued, both Cassidy and Silber developed misgivings about Goldin's personality. At a key trustees' meeting, when Goldin was asked what role he foresaw for Silber if he became BU's next president. "Dan surprised everyone by saying he wanted John out," Cassidy recalled. One trustee remembered Goldin replying, "I'll call him . . . for advice and counsel, but he will have no role."
Silber would not let even this act of defiance against his sponsor queer the Goldin deal; the trustees voted (narrowly at first, then unanimously) to offer him the job in August 2003. But there were immediate regrets. "I began to get calls about what a mistake this was, with some implication that it was in no small part my mistake," Cassidy said. On Oct. 24, the trustees reversed themselves. It fell to Cassidy to tell Goldin the offer was being withdrawn. "He was clearly stunned," Cassidy recounted.
BU paid Golden a $1.8 million settlement. The trustees were held up to public ridicule in the news media. Smoldering resentments at aspects of Silber's authoritarian regime, including his personal and business relationships with members of the Board of Trustees, came to the fore. According to D'Alessandro, vice chairman of the Board of Trustees during this period, he and three other trustees received threatening phone calls from Washington telling them not to "drag Gerry Cassidy into this." D'Alessandro declined to identify the callers. Cassidy said he knew nothing about the calls.
The trustees appointed an "ad hoc committee on governance," which recommended new rules generally prohibiting the University from doing business with trustees.
A month later, BU announced that one-fourth of its trustees would be leaving the board in 2004. One of those leaving would be Gerald Cassidy. "I resigned," Cassidy said.
The end of a rewarding relationship? Not at all. Cassidy left the board but has remained BU's lobbyist. In 2005, he helped win $13.7 million in new earmarks for the university. For that year, BU paid him $940,000. No other university client pays Cassidy remotely as much as BU pays.
Silber had signed a five-year contract with Cassidy in 2003, which provided for a $20,000 raise for 2006. The man who finally got the job as BU's president, Robert A. Brown, the former provost of MIT, has been changing many of Silber's policies in his first 18 months in office, but not the university's relationship with Cassidy. Asked for an interview to discuss this, Brown declined in a written message: "I do not wish to participate in such an interview."
Washington Post research editor Alice Crites contributed to this report.
Tomorrow: Gerry Cassidy makes his biggest mistake.
Key Related Materials
John Silber comments:
Kenneth Schlossberg claims that on signing a contract with Schlossberg and Cassidy and agreeing to pay them $250,000 per year, "[I] made a point of slipping it into [my] drawer and saying 'nobody knows about this but us.'" To the contrary, I took the issue of hiring Schlossberg and Cassidy directly to the Board of Trustees and had their authorization to proceed. I pointed out that in hiring Cassidy, who had performed brilliantly with regard to the agricultural facility for Tufts, it would cost us no more than we had been paying for our amateurish Washington office. My success with the Board of Trustees turned on the fact that they were fully informed on everything I proposed to do, and on policy issues were consulted before those policies were adopted.
-- John Silber
Ken Schlossberg comments:
I was just informed today that John Silber posted another correction of Kaiser's reporting, denying a quote that Kaiser used from me. John is correct; Kaiser did misquote me. Everything John wrote about the process he followed on our original contract for $250,000 is true.
Unfortunately I guess, from John's point of view, that is only half the story. After we had obtained the federal funding for the three armories to replace the Commonwealth Armory for the state National Guard, I was waiting for people we were working with in Boston to obtain the legislative waiver of the state surplus property disposal act that would clear the way for BU to obtain title to the property. Nothing was happening. I came to Boston to assess the situation. I came to the conclusion that the Boston end would only get done in a timely fashion if we managed it as we had managed the Washington end. I went back to John's office and told him that we needed to take over the Boston end. He asked how much that would cost. I said it would cost him as much as the Washington end, another $250,000. He agreed on the spot and took the additional agreement and put it in his desk drawer, saying something to the effect of, "Nobody will anything about this except us." We were then paid at the monthly rate of the $500,000.
If John has evidence that he went through the same process of informing the Board of Trustees of the additional $250,000 at the time it happened, then I am sure he will be happy to produce it. But he said what he said, though to this day I don't know exactly why he felt it necessary to say it. When I read this installment and saw how Kaiser had used my quote, I emailed him immediately to inform him of his error. After John's post, he may want to include a correction in the installment.
-- Ken Schlossberg
Robert G. Kaiser comments:
My account was based on notes from a long interview with Kenneth Schlossberg in January, 2005.
According to those notes, "They [Schlossberg and Gerald Cassidy] asked Silber for a two-year, $250,000 contract. He signed it but made a point of slipping it into the drawer of his desk and saying nobody knows about this but us."
Schlossberg believes that I musunderstood, that this referred to a later, second contract raising the fee to $500,000 a year. This second contract is described in the next paragraph of my notes.
Since Schlossberg was my only source for this factoid, I happily accept his account now. I also accept President Silber's statement that in fact he got his trustees' approval, since I have no basis for challenging it. I should have asked him about this when we talked in January, 2006.
-- Robert G. Kaiser
An overview of Gerald Cassidy's life and career.
A "cast of characters" in the life and career of Gerald Cassidy.
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