By Max Stendahl | May 24, 2018
Calling the recent closure of Mount Ida College “a wake-up call,” Massachusetts Attorney General Maura Healey on Thursday urged state officials to create a new office within the state Department of Higher Education that would oversee financially struggling schools.
The statement by Healey comes as her office investigates whether Mount Ida leaders violated their fiduciary duties before the Newton liberal arts school closed, laid off all 280 employees and sold its campus to UMass for $75 million. Students, faculty and state regulators were caught by surprise when the deal was publicly announced on April 6.
“We need to take proactive steps to prevent future chaos and financial harm to students, parents, faculty, and staff,” Healey said Thursday. “Our experience working with Mount Ida students confirms that we need better oversight and accountability.”
Healey urged lawmakers and Gov. Charlie Baker — who have also criticized Mount Ida’s abrupt shutdown — to provide adequate resources to fund the work of a dedicated financial oversight office within the DHE.
In a statement, a representative for the Higher Education department pointed out that the department previously had announced plans on May 1 to establish a “working group” to make recommendations “aimed at averting future sudden and damaging closures or interruptions” at private colleges in the state. The DHE, along with Healey’s office, has also been working to ensure that Mount Ida students can continue their studies at other colleges in the fall.
Meanwhile, Healey is investigating whether the president of Mount Ida, Barry Brown, and other members of Mount Ida’s leadership and board “violated their fiduciary duties in addressing (the college’s) financial condition and in carrying out its educational mission.” Two weeks before striking the agreement with UMass, Mount Ida rejected a takeover offer from Lasell College that would have allowed it to remain open.
The Boston Business Journal reported on Saturday that one of Mount Ida’s major lenders had a pre-existing relationship with Brown, potentially sparking conflict of interest concerns. A subsequent report in the Boston Globe outlined that relationship. According to the Globe, the lender, a shell company called Carlson Property LLC, was controlled by Rosalie Stahl, a “real estate investor and longtime personal client” of Brown’s. Stahl was also the anonymous figure behind an $8 million donation to Mount Ida in 2015, the Globe reported.