Scandal in Vermont

When the late Dr. Guy Winfred Bailey, after 20 years as president of the University of Vermont, died in a Boston hospital last October, frugal Vermonters applauded his administration. They applauded too soon. He had raised the university's buildings and endowment from about $1,000,000 to nearly $9,000,000, left it with a trifling deficit of $33,502 on the books. But last week the university's financial affairs were in such a tangle that nine of the 18 trustees (among them: U.S. Senator Warren R. Austin) resigned and Vermont's Governor William H. Wills called a special session of the Legislature. It turned out that instead of $33,502, the university had a deficit of nearly $1,000,000 and was on the edge of bankruptcy.

The university, founded 150 years ago by Green Mountain General Ira Allen, has nine self-perpetuating trustees, nine elected by the Legislature. When the Legislature meets next fortnight, it will have to decide whether to 1) let the university go out of business, 2) take it over as a 100% State university, or 3) approve a plan proposed by a special committee whereby the State would appropriate $500,000, alumni would raise $250,000 and the university would be authorized to borrow $1,000,000 more to pull itself out of its hole.

From the university's fantastic financial records, which only doornail-dead Dr. Bailey could have explained, auditors deduced that:

> Dr. Bailey concealed big annual deficits (averaging $200,000 in the last three years) by using restricted funds for current expenses, taking credit for unrealized paper profits, putting inflated values on the university's property.

> He took $69,038 from a scholarship fund for university expenses.

> He handed out unsecured loans (totaling nearly $23,000) from university funds to two friends.

> He paid Senator-Trustee Austin $27,173 in legal fees. Senator Austin explained: "There was not a time in ten years that the university was not in litigation, and I represented it."

> Most mysterious item was a payment of $28,767 to a Boston detective, James R. Wood. Detective Wood explained his fees were for services in ferreting out possible contributors and obtaining endowments. The Brattleboro Reformer acidly observed: "It must be said . . . that the university enjoyed a certain measure of success in getting endowments, and perhaps other college presidents would like to try a detective in place of the conventional and tedious method of salesmanship. ... As for the general public, there may be only a feeling of regret that the detective work didn't take another direction."

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