New Era trustee replaced by U. Law School grad

The University's involvement with the Foundation for New Era Philanthropy case has just become even more complex. The group's creditors held their first meeting on Monday, during which they voted to reject interim bankruptcy trustee John Carroll III, and replace him with former federal Judge and University Law School Graduate Arlin Adams. Adams is also a trustee emeritus of the University, an honorary title given to the most distinguished Trustees upon their retirement from the Board. But although some of the creditors raised the question of conflict of interest during the election because of his potentially biasing ties to the University, University Spokesperson Barbara Beck said there is nothing to be concerned about. "Judge Adams is a man of sterling character," she said. "He is a trustee emeritus -- an honorary designation so he does not vote and he does not chair committees." And to avoid any unnecessary controversy, Adams announced at the elections that he would resign from his position as trustee emeritus trustee if he were selected. Last week, Carroll released calculations which showed the University making $2.1 million from New Era. These figures were in direct contrast with the $1.55 million loss that University officials had originally projected. The $1.55 million figure represents the amount of money the University invested in New Era. But University officials will not be able to confirm or deny this gain until it completes its own investigation, which is being conducted by Coopers & Lybrand. University spokesperson Phyllis Holtzman said last week that the firm will be investigating two major issues. "They are going to look at the University's procedures that led to this involvement with New Era," she said. "And they are also looking at this whole money issue to try and figure out what the different funds represent." Along with his bankruptcy figures, Carroll also submitted a set of rules requiring organizations that made money from New Era to return some or all of their gains to help offset charities that were devastated. But it is possible that these rules will not remain under Adam's leadership. "We do not know if there will be changes in procedures," Beck said. "We will have to wait to see who the new trustee will be. "Once a permanent trustee is appointed, he or she will decide," she explained. New Era, which is based in Radnor, Pa., with offices in London and Hong Kong, promoted itself as an innovative new charity capable of doubling nonprofit institutions' money by soliciting matching funds from a pool of anonymous wealthy donors, who supposedly relied on the charity to find worthy causes. Along with the University, hundreds of nonprofit organizations deposited their money with New Era, which said it would hold the funds for six months in brokerage accounts -- rather than in escrow -- and claimed to be investing it in certificates of deposit or treasury bills while finding matching donors. But John Bennett Jr., the charity's president, admitted to his staff last month that the anonymous donors did not really exist.

Please note All comments are eligible for publication in The Daily Pennsylvanian.