Kings Pointer Summer 2011 : Page 2

CHAIRMAN’S MESSAGE This is ordinarily a time of year when there can be only good news to report from Kings Point. Graduation came off spectacularly, held on Barney Square for the ﬁrst time. The close quarters of the gathering provided an air of intimacy that was never captured with previous graduations held on Tomb Field, which was being resurfaced. It was a particularly nostalgic and proud moment for me to watch a select group of Midshipmen toss their hats in the air--Midshipmen that had never heard of Kings Point until receiving a recruiting letter from me, including the valedictorian and two national wrestling champions (sorry if it sounds like I’m patting myself on the back, but I really am very proud of these Midshipmen and the validation that each of us can have a profound effect on the lives of young men and women if we make the commitment). Two weeks later we were back on Barney Square for Indoctrination Day for the class of 2015, which also happened to be my 50 th anniversary of my own entrance into Kings Point (I’m not really that old as I was only seven when I entered). My class of 1965 is the legacy class for ’15 and this was the ﬁrst of many events that we will share with this class as it makes the journey towards graduation. Again, a very special day. The Superintendent is to be congratulated for his leadership in putting both of these events together and remaining unﬂappable in the face of a series of unanticipated obstacles. We were also again privileged to hold gatherings after both events for graduates and their families at the alumni house. The Babson staff did a terriﬁc job in organizing the activities. If you are still with me I will now shed the above qualiﬁer, “ordinarily,” because there is much to report that is not “good news.” So, without pointing any ﬁngers of blame (who am I kidding) here are some of the exciting events to be reported since I wrote my last column:  Because the method of funding for assistant coaches had been found improper, most (plus the Sports Information Director) were terminated by MARAD, leaving three coaches for football and only the head coach for each of the other sports. Some, to all, assistants would be re-hired (if they are still unemployed) when a new method for funding is implemented at some undetermined future time. The Foundation has offered to bridge the gap with a gift to pay the salaries of the terminated coaches; but, of course, that would be subject to the several months black hole of the “gift acceptance” process. Since most recruiting for the Academy is done by coaches, unless this is rectiﬁed quickly (hold your breath), the quality of the next class will be a big question mark.  The recently hired Academy Legal Counsel was mysteriously terminated by MARAD; although there is some talk of him competing for another position at Kings Point. This would be a sad, unnecessary, loss of a talented, eminently qualiﬁed and dedicated professional; and, once again, hamstrings a Kings Point Superintendent without an on-site, conﬁdential legal resource—a deﬁciency that has been recognized for many years (i.e. one step forward, then one step back).  Authority to issue Secretary’s/Superintendent’s appointments, which had been under review by MARAD, was withheld until May, causing many to go unused and putting a dent in the recruitment of athletes.  The varsity awards ceremony at Ackerman Auditorium (itself downgraded two years ago from the former traditional banquet at Melville Hall) was cancelled because, with the termination of the Sports Information Director, there was no one to organize it. Instead, most of the awards were presented at a lunch without parent attendance.  Subsequent to the publishing of the last Kings Pointer , the Administrator asked for the opportunity to address the Foundation Board (asking the Board Members, all of whom are volunteers and pay their own expenses, to travel to Washington or Kings Point). His request was granted but, since few Board Members could spare the travel time, he was invited to participate in the regular teleconference meeting in June. However, at the last minute, due to a scheduling conﬂict, he advised that he would be an hour late. As this was to put an unreasonable burden on the schedules of the Members, out of respect for their time, the Board voted to cancel his address, and reschedule it for a later date.  It has been reported, but not conﬁrmed, that MARAD will not consider the public/private program used so successfully by West Point and the Naval Academy in constructing new facilities (and which I described in detail in the Fall 2010 issue of the Kings Pointer ). If that position is not changed it is unlikely that any signiﬁcant funds will be raised from private sources and the taxpayers will bear the whole burden (or the facilities will not be built).  And in the unﬁnished business category, at this writing we are now at six months plus and counting, awaiting MARAD approval of the Foundation’s gift-of-service of a strategic plan. This is now the fourth Chairman’s Message (thus, over the time-span of one year) that I have devoted space to “planning” for the strategic plan. Can things move any slower? Nothing will surprise us. As I wrote in my last column: “One would think that a gift of this nature would take no more than three hours to approve much less three [now six] plus months.” We do not know the “ofﬁcial” reason for the delay as MARAD has had no direct communication with the Foundation (other than asking for a copy of the Foundation’s contract with consultant Alvarez and Marsal four months into the process—which had previously been given to them in January). We have concerns that if MARAD controls the process and the committee, it will also control the results. And, since MARAD has a stake in maintaining its own position and control over the Academy (more on that later), it would have a major conﬂict of interest. It is, of course, possible that MARAD has not understood that the Foundation is making this gift to Kings Point, not MARAD; and, therefore, should have been communicating with us as the donor over the past six months.  And last, but not least, in the event MARAD rejects the Foundation’s offer of a gift-of-service of a strategic plan (or changes it in such a way that the Foundation determines that it would be wasting its money and withdraws the offer), there has been no suggestion by MARAD of a plan B. The value of the Foundation’s offer is approximately $1 million, a sum that the taxpayers would have to fund with any plan B. Which all brings us back to the role of MARAD in the governance of Kings Point. MARAD directly controls ﬁnance, personnel and legal from Washington (as well as reserving the right to make any key decisions). What organization could effectively be run with these three key functions controlled by some other entity; or with the legal department making operational decisions instead of acting in an advisory role? More rhetorical questions. In my last column I stated that I feared that MARAD might be an “obstacle in Secretary LaHood’s goal to make Kings Point the jewel of the service academies.” There is now no question in my mind that it is; and changes must be made at MARAD before additional lasting damage is done to the Academy. Indeed, the problem of lack of visibility to the general public and the block deterioration and obsolescence of the physical plant of the Academy can be attributed to this perverse structure of governance of Kings Point by MARAD over the past 65 years. As we have all witnessed, when we have had an effective Administrator the school moved forward; and, when we have had an ineffective one, we moved right back. If one were to design a governance structure on a blank piece of paper, this current situation is the last thing you would come up with. Anyone reading the GAO study that was so critical of the management of Kings Point several years ago has to wonder how MARAD, as the responsible oversight authority, escaped any criticism at all. Instead, it has expanded oversight into authority and control but maintained its lack of accountability. It has been suggested that the current problem with MARAD’s governance of Kings Point is its micro management (which anyone continued on page 4 2 / KINGS POINTER / SUMMER 2011

Chairman's Message

This is ordinarily a time of year when there can be only good news to report from Kings Point. Graduation came off spectacularly, held on Barney Square for the first time. The close quarters of the gathering provided an air of intimacy that was never captured with previous graduations held on Tomb Field, which was being resurfaced. It was a particularly nostalgic and proud moment for me to watch a select group of Midshipmen toss their hats in the air--Midshipmen that had never heard of Kings Point until receiving a recruiting letter from me, including the valedictorian and two national wrestling champions (sorry if it sounds like I'm patting myself on the back, but I really am very proud of these Midshipmen and the validation that each of us can have a profound effect on the lives of young men and women if we make the commitment). Two weeks later we were back on Barney Square for Indoctrination Day for the class of 2015, which also happened to be my 50th anniversary of my own entrance into Kings Point (I'm not really that old as I was only seven when I entered). My class of 1965 is the legacy class for '15 and this was the first of many events that we will share with this class as it makes the journey towards graduation. Again, a very special day. The Superintendent is to be congratulated for his leadership in putting both of these events together and remaining unflappable in the face of a series of unanticipated obstacles. We were also again privileged to hold gatherings after both events for graduates and their families at the alumni house. The Babson staff did a terrific job in organizing the activities. If you are still with me I will now shed the above qualifier, "ordinarily," because there is much to report that is not "good news." So, without pointing any fingers of blame (who am I kidding) here are some of the exciting events to be reported since I wrote my last column: Because the method of funding for assistant coaches had been found improper, most (plus the Sports Information Director) were terminated by MARAD, leaving three coaches for football and only the head coach for each of the other sports. Some, to all, assistants would be re-hired (if they are still unemployed) when a new method for funding is implemented at some undetermined future time. The Foundation has offered to bridge the gap with a gift to pay the salaries of the terminated coaches; but, of course, that would be subject to the several months black hole of the "gift acceptance" process. Since most recruiting for the Academy is done by coaches, unless this is rectified quickly (hold your breath), the quality of the next class will be a big question mark. The recently hired Academy Legal Counsel was mysteriously terminated by MARAD; although there is some talk of him competing for another position at Kings Point. This would be a sad, unnecessary, loss of a talented, eminently qualified and dedicated professional; and, once again, hamstrings a Kings Point Superintendent without an on-site, confidential legal resource–a deficiency that has been recognized for many years (i.e. one step forward, then one step back). Authority to issue Secretary's/Superintendent's appointments, which had been under review by MARAD, was withheld until May, causing many to go unused and putting a dent in the recruitment of athletes. The varsity awards ceremony at Ackerman Auditorium (itself downgraded two years ago from the former traditional banquet at Melville Hall) was cancelled because, with the termination of the Sports Information Director, there was no one to organize it. Instead, most of the awards were presented at a lunch without parent attendance. Subsequent to the publishing of the last Kings Pointer, the Administrator asked for the opportunity to address the Foundation Board (asking the Board Members, all of whom are volunteers and pay their own expenses, to travel to Washington or Kings Point). His request was granted but, since few Board Members could spare the travel time, he was invited to participate in the regular teleconference meeting in June. However, at the last minute, due to a scheduling conflict, he advised that he would be an hour late. As this was to put an unreasonable burden on the schedules of the Members, out of respect for their time, the Board voted to cancel his address, and reschedule it for a later date. It has been reported, but not confirmed, that MARAD will not consider the public/private program used so successfully by West Point and the Naval Academy in constructing new facilities (and which I described in detail in the Fall 2010 issue of the Kings Pointer). If that position is not changed it is unlikely that any significant funds will be raised from private sources and the taxpayers will bear the whole burden (or the facilities will not be built). And in the unfinished business category, at this writing we are now at six months plus and counting, awaiting MARAD approval of the Foundation's gift-of-service of a strategic plan. This is now the fourth Chairman's Message (thus, over the time-span of one year) that I have devoted space to "planning" for the strategic plan. Can things move any slower? Nothing will surprise us. As I wrote in my last column: "One would think that a gift of this nature would take no more than three hours to approve much less three [now six] plus months." We do not know the "official" reason for the delay as MARAD has had no direct communication with the Foundation (other than asking for a copy of the Foundation's contract with consultant Alvarez and Marsal four months into the process–which had previously been given to them in January). We have concerns that if MARAD controls the process and the committee, it will also control the results. And, since MARAD has a stake in maintaining its own position and control over the Academy (more on that later), it would have a major conflict of interest. It is, of course, possible that MARAD has not understood that the Foundation is making this gift to Kings Point, not MARAD; and, therefore, should have been communicating with us as the donor over the past six months. And last, but not least, in the event MARAD rejects the Foundation's offer of a gift-of-service of a strategic plan (or changes it in such a way that the Foundation determines that it would be wasting its money and withdraws the offer), there has been no suggestion by MARAD of a plan B. The value of the Foundation's offer is approximately $1 million, a sum that the taxpayers would have to fund with any plan B. Which all brings us back to the role of MARAD in the governance of Kings Point. MARAD directly controls finance, personnel and legal from Washington (as well as reserving the right to make any key decisions). What organization could effectively be run with these three key functions controlled by some other entity; or with the legal department making operational decisions instead of acting in an advisory role? More rhetorical questions. In my last column I stated that I feared that MARAD might be an "obstacle in Secretary LaHood's goal to make Kings Point the jewel of the service academies." There is now no question in my mind that it is; and changes must be made at MARAD before additional lasting damage is done to the Academy. Indeed, the problem of lack of visibility to the general public and the block deterioration and obsolescence of the physical plant of the Academy can be attributed to this perverse structure of governance of Kings Point by MARAD over the past 65 years. As we have all witnessed, when we have had an effective Administrator the school moved forward; and, when we have had an ineffective one, we moved right back. If one were to design a governance structure on a blank piece of paper, this current situation is the last thing you would come up with. Anyone reading the GAO study that was so critical of the management of Kings Point several years ago has to wonder how MARAD, as the responsible oversight authority, escaped any criticism at all. Instead, it has expanded oversight into authority and control but maintained its lack of accountability. It has been suggested that the current problem with MARAD's governance of Kings Point is its micro management (which anyone having anything to do with the Academy cannot fail to note). However, I am now convinced that the issue goes further–and that MARAD seeks direct control over all operations and activities–and views the role of a Superintendent as a fi gurehead (or possibly a convenient scapegoat). With the very real potential transfer of management of the Reserve Fleet from MARAD to MSC, MARAD could quickly become an anachronism as its relevance and purpose come under further scrutiny. Would we then have a MARAD hanging on to its authority over Kings Point simply to justify its own existence? A sure recipe for waste and mismanagement. MARAD's oversight role with respect to Kings Point made sense only in the context of its original larger mission in promoting the U.S. fl ag Merchant Marine, which it has largely abandoned. To remain relevant to the future of Kings Point, MARAD needs to demonstrate that: 1) it has the skill base to run a college; 2) its ranks are fi lled with staffers dedicated to the welfare of the Academy and its Midshipmen; and 3) there is accountability for its decisions, actions and inaction. However, all three of those elements are missing. The skill set is not there (with respect to background and performance); there are reportedly many staff members who hold hostile attitudes toward the Academy; and there is zero accountability, not only for decisions which harm the school, but for failing to provide for basic and critical services (like the delivery of textbooks in time for the start of a class). Thus, the problem for Kings Point is how to deal with what could become a self-perpetuating bureaucracy in search of something to do. And it is the responsibility of the graduate body and other stakeholders to propose solutions rather than simply watching this train wreck. We should not be exposing a problem without offering a solution. So, here I go further into the pit of controversy: One solution would be to set up a Board of Trustees to whom the Superintendent would report and be held accountable. This Board would function in the same manner as the boards for most colleges and universities. Its members would be appointed by, and report to, the Secretary of Transportation and come from industry, education, the military, etc.; and, most importantly, receive their appointments based upon their qualifi cations and interest in pursuing Secretary LaHood's vision of turning Kings Point into a jewel of the Service Academies. Would there be a role for MARAD? Perhaps. But not one that requires the current level of personnel and management. Fraternally, Charles J. Hill'65 Chairman United States Merchant Marine Academy Alumni Foundation

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