(Alex) It's Thursday, February 22. And this is the 1909 state news weekly podcast featuring our reporters talking about the news. I'm your host, Alex Walters. This week, I'm joined by state news administration reporter, Owen McCarthy.
(Owen) Thanks so much for having me. Alex
(Alex) It's great to have you back to nine, you have had quite the week, you've done some great reporting a little bit. We've been tagged him in it. That's just been some solo and stuff. Great. So I don't know if you want to talk about it. We've got two things on the docket today. Sounds good. First, you're following for longtime followers of MSU news. You know, there was a hazing related death a couple years ago, and one of them misuse fraternities. And you know, that was why they covered their criminal charges all that, but it's, you know, sort of reemerged as an issue as there's been more new criminal charges. So you're gonna talk us through both? What all that is for people who are totally new to this whole thing? Yeah. And also the new stuff that's been going on right now. Yeah. And the two of us together have been some coverage about, you know, the effort to get MSU to divest from both the State of Israel and also from a group of weapons manufacturers that this that some students alleged the university's endowment is funding. Yeah. And we did some reporting on that. And how exactly that would work. If MSC was even open to their demands? It turns out endowments are quite complicated. Yeah, we'll make it simple for you. Don't worry, don't turn off the power, you guys. Anyway, I want. Let's get started. I want you to tell me, as if you know, for if people don't know anything about this, that happened a couple of years ago, there's this tragic death at an MSU fraternity tell us, you know, state news did some great reporting, talking to people who are actually there, who were able to tell us what happened that night? I want to talk us through that.
(Owen) Yeah. So basically, back in 2021, there was a frat party. And it was a party that, you know, the purpose of it was to sort of initiate for new pledges. Okay, the name of the fraternity was was pi alpha phi. And basically, you know, they have this party, and, you know, there's hazing that's going on, and kind of the idea for some of these parties in and I guess, just behind hazing in general is that like, at least in this specific case, these people, the idea was to kind of like black out, and then come back in sort of be like, rebirth. And initially, it's called a crossover across crossing the threshold from pledge to brother through this, like ritualistic backing out from excessive drinking. Yeah, that's exactly right. But it has dangerous, and in this case, you know, fatal consequences. So there was, you know, there was a broke college student at the time who, who died this night in 2021. And then the other pledges also, you know, really high blood alcohol levels. They were hospitalized there, there. Okay. But yeah, they're actually kind of involved still, you know, testifying and things like that. But yeah, so that was what happened back in 2021. And you know, it closer to that date in 2021, early 2022. There were criminal charges brought right against members of FRAC. You talked through that initial round of charges. Yeah, so the initial round of charges, it was three individuals. And they were all, you know, sort of frat leadership, right. Charges against one of the people was dropped back then. And basically what the idea was, was that he, you know, had no direct involvement. He was not, you know, telling anyone to drink more. Right. So the charges against him were dropped. But there are still two people who have been awaiting sentencing since 2022. And they're charged with, you know, the most severe charges, hazing, resulting in death. And that specific criminal charge, yes, I see. There's not a ton of precedent for it either. You know, it's something that is, is kind of, you know, newer, and it's, it's 15 years in jail. These are the individuals, you know, sort of like elder members of the frat who are directly involved with, I guess, kind of designing and encouraging this ritual that ended in the death. Yeah. And then there's one person who, you know, the idea was they were, you know, there's a great story in the Lansing State Journal today that talks about this. But you know, it was this one person who was kind of in these group chats saying that he was going to be buying the alcohol for the partners supply. Yeah. Means of the death. Right. Yeah. But there's discrepancies over that, you know, I would encourage you to anyone to read the story and LSJ. But basically, you know, the defending attorney of that individual is saying, there's actually no proof of a transaction of any alcohol being talked about it in the group, just that he expressed that he would buy some alcohol for the party, but then talk about what you've been covering this week. Here's later it's 2024. Yeah, and there's a new round of charges, but not against those most directly involved. It's a sort of a broader group of them. MSU students, somebody who's graduated now former MSU students, MC alums who are being charged, talk me through what are those charges? Yeah. So, you know, the truth is there's not a ton of detail. As far as what exactly these people did or what their involvement was. We're kind of waiting on that. All we've really gotten so far is a statement from from the prosecutor's office, basically just saying, you know, through further investigation that ELP D was doing, they, you know, they revealed that there were these people who are also involved in they need to be charged. I want to find the actual statement, if I can I, yeah. Let's see, I know what's right here in this story. When, when. And so when they talk about so they've been investigating this over, because, you know, we thought this was sort of wrapped up that this was done, but it seems by this announcement that they've actually been sort of further investigating and trying to build charges against a wider array of people involved. But anyway, you have the statement. Yeah. So you know, this statement was originally given to analyze. Ingham County prosecutor John Dwayne said further investigation by East Lansing police resulted in the development of additional suspects suspects that further information was reviewed by the Ingham County Prosecutor's Office, which filed the additional charges? I see. Yeah. And there was actually somewhat someone I talked to in my story. He's an attorney who's representing someone who's been, you know, awaiting sentencing sentencing sits since 2022. One of the first people charged, directly involved. Yeah, exactly. And he basically said, you know, I'm also looking for that. He basically said that he thinks there's a sort of, here's his quote, all of these people that were in or even at a fraternity where something happened by their mere presence. They're being charged criminally, on everything I've seen, I don't see a basis for that, at least with respect to my client. And this is using these new people that are charged or bystanders who are present that night. Exactly. involved in sort of designing or carrying out this ritualistic crossover. Yes, exactly. And that was the person who said that was Brian Morley, the attorney who's representing Andrew Wynn, who, just to clarify is not related to fat one who was who was the person who died. But yeah, Brian Morley has been representing this individual since 22. And yes, he he is saying like, he thinks that these implying that these people were kind of bystanders, but he also makes sure to sort of clarify that, at least with regards to my client, like, you know, yeah, my client was not, you know, involved. But yeah, he said he described as like a mob mentality in bringing charges against people who may have been bystanders, and this is this is this sort of precedent, you know, because they've been talking about these charges they put together for the deaths related to hazing, that that's a new thing that prosecutors able to do. Is this also being charging these, you know, allegedly as bystanders, as lawyers are the same people who weren't directly involved? Yeah. Is that is that new? Is that precedent? And is there a way that we can figure out how this is gonna look like or is this something that's sort of new territory? Yeah, it is new territory. I don't I don't know if there's maybe like a super niche example somewhere. But you know, all indicators are that yeah, this is this is not something that happens. Really, it's also worth noting that, you know, the family of fat one who was who was killed. Or I don't know if that's how we should phrase it. But you know, who died that night? You know, they are being represented by a law firm that actually specializes in frat hazing litigation. And there's not a lot of firms out there that do that, you know. So it's, it's it's definitely kind of a new territory.
(Alex) Yeah. Well, it's interesting, you know, something for people to watch if they're interested. And it's always almost trying to, you know, there's been so much tension in this crumbly trial. Right, as you know, the country reckons with the idea of school shootings of how can we throw the criminal legal system maybe charge a broader a wide array of people with their sort of participation in it, maybe this case, which I'm sure you'll be closely following, for state news can be example for people looking, you know, as we deal with, you know, changing conceptions of hazing, and you know, Greek life, you know, what prosecutors can do in these situations? Yeah. So I'm excited to see what else you cover as this develops over the next, you know, months and years and such. Yeah, for sure. But that's not our only topic of the day. We've got you for a couple more minutes. Oh, yeah. divestment. Yeah, you and I, you know, so people not familiar over the past few months, since October 7 is conflict Israel and Gaza, there's been a lot of activism on campus, asking MSU to divest from these investments, you know, some directly with the State of Israel, some with these weapons manufacturers they believe are tied to the conflict and sort of broader conflicts across the world. And we've covered a lot of students demanding this students saying they want this right, that university being relatively resistant to those demands, what we hadn't done until now. And what you and I set out to do over the last week or so, is write a story that's like, alright, let's say MSU was clearly into this mess. You said students that are protesting and demanding this. We agree with you guys. We want to do this. We want to divest. Could the university actually do that? If that's even possible, what would that look like? And if it's not possible, why is it not possible and that's the story we wrote a story that I think is an important read for anybody who's interested in this issue for sure. But before we get into that, and we will get into that, and spoil are those listening endowments, they're complicated. You and I think are gonna do a great job. I hope and I think we've already done our story, you know, better. Before we get into that, I want you to tell me about what exactly these investments are that students are saying MSU needs to pull out of?
(Owen) Yeah. So for one, it's, it's a US Treasury bond marked as giving aid to the State of Israel, and it's valued at $236,114. And then the other one, it's about $600 million in private portfolios from the following firms, Lockheed Martin, Northrop Grumman, Boeing, BlackRock and being why Mellon, which the students, they fund weapons manufacturing, it's important to note, some of those companies, namely, you know, Boeing and Lockheed Martin, they are weapons manufacturers.
(Alex) Yeah. Okay. Other ones are more complicated. Yes, we'll get into that. And the treasury bond is complicated, too, because what MSC tells us is that it's a bond funding aid to Israel. But it's it's a US Treasury bond, but it's not necessarily military aid. It's actually earmarked only for refinancing Israeli debt. Yeah. And that was sort of one of embassies, responses to these students, you know, is that like, well, it's not necessarily military. It's just sort of a debt thing. Yeah. I don't think the students are necessarily appeased by that. Exactly. But anyway, okay. So now let's get into this right. And kind of the thesis, the central finding of our story is that, you know, the conflict here isn't necessarily students saying, MSU need to divest from these investments and MSU saying, No, we don't want to do that. We've learned that the university endowment isn't like, you know, the investment you or I might have, if we were just saving money for, you know, whatever, where we choose, let's put our money in this or that, and we can pull it out at any time, right? It's kind of sold off to these third parties, these asset managers who control it for them. And so our conversations with university officials about this, they basically said, it's not even our thing. We can't we don't control it. And I think one of the details almost, it's the lead of our story. And incredibly telling detail about this whole thing is that MSU is own CFO, the top financial administrator at the university, didn't even know they had these investments until students started posting an Instagram about it. Yeah, we have this email from her in December. But we got through FOIA where she's saying, like, I didn't even know we had this till I saw it on Instagram. Yeah, it was some asset manager who did that, right. But talk me through with these specific investments, the private funds and the Treasury bond at MSU. What did they say, you know, when we asked the officials, you know, responsible for this, what is it possible to pull out of these funds? And if so, how would that work?
(Owen) Yeah. So you know, the first is something we highlight in the story is that this gentleman named Jeff Reyes, He's the assistant vice president of financial management, he described it as chaotic, at least in the terms of the Israeli bond. Because basically, the idea is, you know, these, at least what's, you know, indexes and bond indexes, a lot of times they follow things like the s&p 500. You know, they follow these large bond indexes where things are constantly coming in and out, based on how well they're performing. And you know, for example, like being why Mellon is one of these asset managers, they have these indexes, and they're constantly fluctuating, right? In MSU. You know, it's unclear if they have a contract that says this or exactly how it works, but MSU cannot alter the portfolios.
(Alex) Yeah, I mean, he's basically saying MSU can't, can't or won't tell its asset managers, you know, don't do that. One, don't do that. One could do that. One, they just might have these funds, what those funds actually include the individual line items, MSU, feels they don't have actual control over
(Owen) Right and what they can do is, you know, they can they can flag it for these asset managers and bring it to their attention. And, you know, and he said that they have done that, he said that MSU has reached out to asset managers, and basically asked, like, are other institutions asking you about this? Are other people bringing this to your attention? And he said that the asset managers replied and said, No, we haven't heard anything, yet.
(Alex) No one else has asked them to look at this.
(Owen) Exactly. That's what he said.
(Alex) Yeah. And then he says, you know, it's not necessarily an MSc, who's completely blind in this process. They're not just telling people like, put our money where you want to put it, right. But he says, you know, they give him this criteria. And what he says is that it's, he says, we don't select them with a political component, or her words, he says, are his words he says it does not exist in the criteria. He's just looking for a purely fiduciary, what can you do with the university's money so that tomorrow the university has more money than it did yesterday? Exactly. And so what are the students who have protested for so long? What did they have to say about this whole network of asset managers that prevents MSU? From really going through this divestment?
(Owen) Yeah, well, for one, you know, there's there's a somewhat, you know, kind of prominent activists on our campus named Saba Saeed who said that, you know, this was news to her. She had an event in her where she said they haven't even given us given us the time of day to give us an excuse. Yeah, it was
(Alex) as a manager thing isn't even something they had been thinking about previously. ectly And then what about, you know, cuz some of the other students we talked about were ones who have been involved. This is not the first time students have seen investments, I'm assuming that they don't like and protested and said MSU needs to divest. You know what I'm talking about, you know, talk to Jesse Stroud, a white man who's done this in sort of a, an environmental context. Yeah. Is this the first time that Missy has talked with these asset managers? Or is this coming up multiple times?
(Owen) Yeah. So So Jesse Estrada, white is someone who is an organizer with Sunrise, you know, it's a national movement that's been around for a handful years. And, you know, they've got a pretty active affiliate here at MSU. And so he's been, you know, talking about divestment from oil and gas companies for a while. And he says that this is the, almost verbatim the same thing he heard, were basically, you know, the university said, our hands are tied, you know, we don't have a ton of control over these, these companies, and our asset managers and everything, so so we can't necessarily just pull that out. In fact, they've said that can lead to breach of contract litigation, if MSU goes and says, Hey, asset manager canceled that right now, or we're done with you. It doesn't work like that, that would
(Alex) remember even you know, a year ago writing about direct investments. MSU is made into fossil fuel firms. MSU telling me like if we said today, we just took our money out of fossil fuel firms, we're going to get a breach of contract suit from the firm. And then we're going to end up paying that for more money than we otherwise would try to pay out some settlement for breaching that agreement. Yeah. And so it's kind of the same thing. But Jesse, I don't think he's accepting that no answer. He says in the story is great quote, he says, you know, that, yes, MSU feels that it's in this bind, where even if they agreed with the students, they wouldn't actually be able to do this divestment. But he said, it's still their policy that they chose to basically kind of sell the endowment away, right to asset managers that control it and kind of off you skate their own, you know, responsibility for the investments. Yeah. But what about, you know, this is not even further back than sunrise. Go back, you know, 50 years. Yeah, to divestment from apartheid. South Africa. Yep. That is successful effort. That's an effort where students told the university they didn't like investments, and MSU did divest the first university in the nation to divest a lot of historians say that MSU spurred the national divestment movement amongst universities, why is that different? Why could they do it then? And not now?
(Owen) Yeah, I mean, the main thing to understand, and this is what we've heard from these people who are really in this world, in the finance world, and kind of study it, yeah, academic Exactly. is, you know, the market, and the instruments that we have for investment now are just vastly more complicated than they were back then. And also, when it comes to endowments, you know, universities really used to have a team of people that sat around and said, where do we want to put our money? This is where we want to put our money for these X y&z reasons. That's not how it works anymore, though. It's sort of selling it to third parties. Yeah. In fact, you know, Harvard was one of the last universities, obviously a massive endowment, one of the last universities to have more direct control. But even Harvard now, you know, it's it's not in their hands.
(Alex) Yeah. And so why can't why couldn't a university go back to that? Because we talked to somebody who, you know, not only they study this, they run this nonprofit, all they do is activism and, you know, research around University endowments, you know, why can't a university go back to having a dedicated staff that runs its own endowment, instead of selling it away to third parties?
(Owen) Yeah. So so this guy, George George Dyer, um, who we talked to who's the executive director of the intentional endowments network, like you said, you know, they work with trying to, you know, allow universities to align their kind of institutional goals with their investments. Yeah. And, you know, basically, what he's saying is, the reason why they're not going to switch back to this model where they have control is because one single university could never match the level of expertise in all the sectors of the financial world, they could never match the level level of expertise of these, you know, massive, you know, asset managers that are all over the world and have a ton of employees and a ton of money behind them themselves. You know, so the idea is, you know, these asset managers, they really do in each sector, if it's whether it's global emerging markets, whether it's, you know, bonds, every single sector of the market, they have this expertise, and a university, one university just simply could not match that level.
(Alex) Yeah. Well, you know, I think over the next weeks and months, the students, you know, they are undeterred. We were at a, you know, an MSU student government meeting last week, where not unanimously but with a, you know, the only vote in opposition was one abstention. And one other student and the student government voted in favor of a resolution calling for MSU to do this divestment. This week at faculty senate at the university steering committee next month, there's going to be similar resolutions debated, it seems the pressure on MSU is not going to stall whatsoever, the pressure is still there. But you know, the university feels it's really in a bind, where this isn't something that's possible to do. So we'll continue to cover it. But I'm glad we could have this discussion today. Because it's important way to understand it, for sure. Thank you more broadly. Oh, and just for coming on the show. It's great to have you. Yeah. Thanks for having me, Alex. Yeah. Well, that's all for this week for the 1909. We'll be back next week with fresh reporting from the great minds here. At State News. Until then, all the stories we discussed and a bunch more are available at state news.com. Again, thank you to you Owen for coming on the show our podcast director Anthony Brinson, or video producer Brad the plant. And most of all, thank you for listening for the 1909 I'm Alex Walters