Stanford Confidential: Sex, Lies And Loathing At The World’s No. 1 B-School

‘POLICIES ARE FOR OTHER PEOPLE’

Etchemendy’s emailed response to Saloner appears to grant the dean authority to make decisions about Phills. “I am absolutely supportive of anything you decide wrt Jim,” Etchemendy writes.

In a Facebook chat with Gruenfeld that divorce court filings indicate took place shortly after Saloner’s correspondence with Etchemendy, Saloner discusses his and Gruenfeld’s relationship – “Can’t risk letting your kids walk in on us” and “I could meet you on your street for one late night hug, but I know better than to think we could limit ourselves” – then reports to Gruenfeld on his disclosure to Etchemendy. “He basically ignored what I said about the two of us and, not in these words, that he trusts me to make any decisions regarding Jim . . . I think it is his way of saying ‘you have done what the policy says you have to do, I appreciate it, but the policy wasn’t written with you/this in mind and so I’m respecting your privacy and ignoring it.’”

THE ‘DISCREET AND RESPECTFUL’ PROVOST

Gruenfeld replies, “Love that. So discreet and respectful,” and after the pair exchange a few more comments, Saloner declares, “I want to hold you,” and Gruenfeld responds, “I want you to hold me.”

Later, in what Phills’ lawyers say is a reference to “Etchemendy’s lack of concern about Saloner’s ongoing role as Dean supervising both Gruenfeld and Phills,” Saloner writes to Gruenfeld to say, “As predicted, Etch is totally cool,” a court filing says.

Lawyers for Saloner and Stanford refer on multiple occasions to a recusal by Saloner, saying in two filings that it occurred at “the outset” of the relationship between the dean and Gruenfeld. In a March filing, the lawyers provide a more specific time-frame. “In October 2012, Dean Saloner timely and properly recused himself as to employment decisions concerning Phills and Gruenfeld,” the lawyers state. “Phills alleges that Dean Saloner did not in fact recuse himself from involvement in decisions that affected the terms and conditions of Phills’ employment, including those related to university housing… At no time did Dean Saloner comment on or ‘approve’ any decision related to the repayment of the exceptional loans.”

WHEN IS A RECUSAL NOT A RECUSAL?

Etchemendy also maintained that Saloner had fully recused himself from duties involving Phills. In a letter last year to Phills over Phills’s employment status, Etchemendy says that “the dean recused himself from all supervisorial duties in October 2012. Those duties have been handled by Senior Associate Dean Madhav Rajan in consultation with me or by me alone since that time.”

On Nov. 8, 2012, about a week after Saloner’s exchange with Etchemendy and his report to Gruenfeld, Saloner agreed with a decision to deny Phills the $250,000 in exceptional loans that had been granted to Gruenfeld when the couple jointly signed for the loans, starting the process in which the GSB demanded repayment, court records show. Rajan had emailed Saloner to tell him that he and the other senior associate deans (SADs) unanimously opposed granting housing-loan exceptions to Phills. “I wanted to find out whether you wanted me to do anything different, and in particular if you felt that we should give Jim the housing exceptions,” writes Rajan, who according to documents filed in the lawsuit had not at the time been informed of Saloner’s affair with Gruenfeld. Saloner replies, “I agree with the view of the SADs on this.”

The same day, Rajan informs Phills of the decision. “As for the housing exception, I’m afraid this is not going to be possible,” Rajan writes in an email. “I have now spoken to the other SADs, to Claudia (associate dean Claudia Morgan) and to Garth . . . about the matter. The dean’s office is not willing to petition the university for an exception to the standard Stanford housing program.”

SALONER LAWYER ADMITS CLIENT’S INVOLVEMENT IN ONE DECISION

Phills’s complaint also refers to an email from Rajan to Phills, about the school’s demand for loan repayment. The message purportedly says all decisions Rajan communicated to Phills represented the “collective opinion of everyone in the dean’s office.” Phills’s lawyers italicized “everyone” in their court filing.

Saloner lawyer Lucey concedes in his Sept. 12 statement to Poets&Quants that Saloner had been involved in the decision about Phills when the dean “agreed” with his SADs to deny Phills the loan exceptions, but Lucey says Saloner’s was not the last word. “Dean Saloner forwarded that decision to the Provost, who made the final decision,” Lucey says. “No non-tenured faculty at the GSB has ever received these special loans, so the decision was routine.”

Phills argues in his complaint that under Stanford’s faculty loan policy his position on the university’s Academic Council makes him eligible for the extensions, so denying them violated the policy.