Stevens Institute of Technology President Harold Raveché resigns as school submits to state oversight

Stevens Institute of Technology President Harold Raveché resigns as school submits to state oversight

By Statehouse Bureau
January 15, 2010

Stevens Institute of Technology President Harold Raveché, beset by allegations he accepted an exorbitant salary while improperly spending the school’s money, will resign in July, officials announced today. In addition, the school will submit to the state’s demands for increased financial oversight under a settlement agreement.

Attorney General Anne Milgram launched a 16-count lawsuit against the Hoboken school in September, alleging financial mismanagement and excessive compensation.

Raveché, after 22 years of running Stevens, will step down as president but serve as a consultant until 2014.

An audit committee will oversee school finances, while former state Supreme Court Chief Justice James Zazzali will provide legal counseling to ensure Stevens adheres to the settlement, which does not include any admission of wrongdoing.

Officials said Zazzali, previously retained by the school to review the state’s lawsuit, will issue regular reports on the school’s progress.

“The corporate governance structure agreed to by Stevens’ board of trustees will significantly reform past management practices and procedures and serve as an example to other not-for-profit organizations,” Ricardo Solano Jr., who is the acting attorney general while Milgram is out of the country, said in a statement.

In September, Milgram accused Raveché, whose annual compensation topped $1 million, of hiding the school’s poor finances from the board of trustees and misappropriating gifts donated to the school. Stevens retaliated with its own lawsuit against Milgram, saying she overstepped her authority by demanding changes at the private school. The settlement announced today also resolves that dispute.

Kathleen Boozang, a law professor at the Seton Hall University School of Law, said Milgram was within her power to sue the school, but said most people in her position don’t take that step.

“Attorneys general getting involved with the management of nonprofits is a very rare circumstance,” Boozang said. “She’s not the first, but she’s one of the few.”

The settlement does not meet all of the state’s original demands. Board of Trustees Chairman Lawrence Babbio will not resign, although he is restricted to three more years in his position under new term limits. Also, Raveché does not need to return any of his salary, but is required to pay back his vacation home mortgages to the school and similar loans will be prohibited in the future.

When Raveché arrived at Stevens in 1988, the chemist began to aggressively expand the school, investing in new construction and emerging academic and research sectors. But an examination of the school’s finances requested by a faculty committee found reports of sizable debt and operating losses.

Babbio issued a statement thanking Raveché “for his tireless efforts in support of the advancement of the Institute.” Saying the school has already made “significant progress,” Babbio said “the changes agreed to today will improve our internal controls even more and we look forward to continued success.”

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