As Stanford’s Class of 2016 Graduates, An Unresolved Conflict Lingers

This commentary is written by James A. Phills Jr. who, from 2000 to 2015, was a faculty member at the Stanford Graduate School of Business, where he was a professor of organizational behavior and the director of the Center for Social Innovation. He was fired by Stanford and has since sued the university alleging that he was unfairly dismissed from his job. It is the first time Phills has broken his silence to speak or write publicly about the controversy.

This Saturday, June 11, the MBA class of 2016 will graduate from Stanford University’s Graduate School of Business (GSB) — a special day for these talented young women and men.  Unfortunately, the day will be tainted because the ceremony will be presided over by the GSB’s outgoing dean, Garth Saloner, who sullied the school’s reputation and was forced to resign last October amid a sex and leadership scandal. The story garnered national coverage in major publications, including an extensive article in Vanity Fair. The sordid details embarrassed everyone involved. As one of the key protagonists, I should know.

But the coverage largely missed the most disturbing aspect of the story: the complicity of Stanford University and its provost, John Etchemendy, in endorsing, concealing, and defending Saloner’s misconduct. Such flagrant dishonesty and cronyism do not befit an institution of Stanford’s stature — and, I believe, contribute to a culture of privilege, arrogance, and impunity that is corrosive to the values of a great university.

Those familiar with the GSB case know the basic facts: In the summer of 2012, Dean Saloner began a clandestine romantic relationship with one of his direct subordinates, a faculty member, who was married to another GSB faculty member (me), and he failed to recuse himself from decisions about these two subordinates. Further, I believe he used his power as dean to implement punitive employment actions, including manipulating a GSB-funded mortgage that his office controlled in an attempt to advantage my wife in our divorce, and ultimately to drive me out of the GSB. Three years later, as a journalist who had sifted through public records of the subsequent lawsuit was preparing to publish details on Sept. 14, 2015, Saloner resigned as dean.

The narrative of a leader whose sexual indiscretions, abuse of power, denials, and cover-ups are followed by the inevitable revelations, media frenzy, and ultimately a fall from grace, is archetypal.  In the world of government, the sagas of Anthony Weiner, John Edwards, and Eliot Spitzer come to mind. Examples from the upper echelons of corporate America abound as well: Darren Huston of Priceline, Mark Hurd of Hewlett Packard, and Harry Stonecipher of Boeing. Despite the distinguished nature of this pantheon, the New York Post recently counted Saloner among its top ten fallen leaders, placing him fourth between Best Buy’s Brian Dunn and Lockheed Martin’s Christopher Kubasik. The article, published May 5, 2016, was titled, “The bosses who got screwed for boning in the corner office.”

COMMENTARY: THE DEAN’S FALL IS THE ‘TIP OF THE PROVERBIAL ICEBERG’

Saloner’s fall from his position as head of what was then the No. 1 ranked business school is the tip of the proverbial iceberg. Documents and evidence that have emerged through litigation suggest that, from the outset, Saloner’s conduct was endorsed and concealed by Stanford Provost John Etchemendy. The record also shows that other university leaders participated in withholding and/or misrepresenting evidence relevant to my allegations, and contributing to a campaign of retaliation and intimidation directed at me. Yes, these are incendiary allegations, so let me lay out a few of the many facts supporting them.

1) Provost Etchemendy endorsed the dean’s conduct.

Etchemendy’s response to the dean’s disclosure of his relationship with my wife was, “I trust you to make any decisions wrt [with regard to] Jim.” I see this as a dispensation to ignore university policies, and Saloner said as much to my wife afterward. The provost also lied to me about the timing of Saloner’s disclosure, claiming, “Garth had, before you originally contacted me, notified me of his personal relationship with [your wife].” This was patently false. I had first contacted Etchemendy about the matter on October 28, 2012. Saloner informed Etchemendy about the relationship on October 31, 2012.

The provost continues to insist that Saloner “recused” himself from any oversight of me on October 31, yet emails between members of the dean’s office on November 7, 2012, clearly show that Saloner participated in and endorsed the decision to illegally call my mortgage, defying the meaning of the term “recusal.”

2) The provost and Stanford engaged in an extensive effort to conceal evidence of Saloner’s misconduct.

On November 30, 2012, I notified the provost of my refusal to return to Stanford from an unpaid leave of absence because of concerns about my boss’s relationship with my wife — in particular their shared animosity toward me. At that time, I asked Etchemendy and Stanford’s general counsel to ensure evidence relevant to my complaint was preserved. I specifically referenced all communications between Saloner and my wife. Despite this request, the general counsel failed to do this for six days, during which time Saloner, as he has admitted under oath, and my wife engaged in a coordinated (and successful) effort to delete text messages and chats that they exchanged during September, October, and November of 2012. Later, the university even went so far as to file its own motion in the divorce proceeding to prevent my wife from having to turn over these communications. Stanford lost and was ordered to produce all of these documents. As of today, despite multiple subpoenas, confidentiality agreements, and court orders, with a few exceptions virtually none of the communications from that critical period has been turned over.

In response to my original complaints, Stanford retained an outside attorney to conduct a “confidential investigation,” which I consider to have been a sham. For example, the investigator was supposed to evaluate my claim that the relationship began long before the dean told the provost — perhaps as early as July or August of 2012. The investigator concluded it had not — but this conclusion appears to have been based only on interviews with Saloner and my wife. The investigator never spoke to, nor even contacted, me. Moreover, the university withheld seemingly flirtatious emails from June and July of 2012 in which my wife and the dean bantered about going to a yoga class together and taking a walk in an isolated nature preserve. The university also asked the investigator to look into allegations that I did not make. A number of critical actual allegations were never examined, so of course the investigator concluded there was “no evidence” for my “complaints.” Finally, despite being charged with evaluating the GSB decision to call the loan, the investigator — an attorney — concluded it was proper and not discriminatory. Yet at her deposition, confronted with actual loan documents, she acknowledged the decision was not consistent with the terms of the loan, explaining that while she had reviewed the loan documents she “didn’t analyze them in any specificity” to evaluate whether the dean’s decision was legally justified.