Biden’s German envoy raises concerns with hefty UPenn payments.
Controversy Surrounds Ambassador Gutmann’s Payments Before Taking Office
President Joe Biden’s ambassador to Germany, Amy Gutmann, is once again at the center of controversy. This time, it’s over the payments she received before leaving her previous position as president of the University of Pennsylvania.
Gutmann, who served as president for 18 years, received two substantial sums from the university before assuming her role as ambassador. In October 2020, she obtained a $3.7 million home loan from the Ivy League school with an interest rate of 0.38%. Additionally, in 2021, Gutmann received $23 million in deferred compensation earned during her tenure.
While these payments are legal and were disclosed on ethics reports, they raise concerns about priorities within higher education and the Biden administration. Critics argue that it highlights the lucrative nature of associations with President Biden.
“Though this situation doesn’t appear to run afoul of any federal ethics laws or the Biden ethics pledge, it’s hard to see it not stirring up quite a tempest in a different administration,” said Michael Chamberlain, director of the right-leaning watchdog group Protect the Public’s Trust. “For one, it certainly looks like another example of how lucrative it is to be associated with Joe Biden.”
Gutmann’s ties to UPenn and controversies surrounding her have drawn attention in recent years. In 2017, she named Biden a professor at the university, despite him not teaching any classes, and he was paid $911,000 over three years. After winning the election, Biden appointed Gutmann as ambassador to Germany, along with former UPenn Board of Trustees chair David Cohen as ambassador to Canada.
“The American public could be forgiven for thinking this could be part of the fulfillment of the Biden administration’s vow to return to old norms,” Chamberlain said, “like the spoils system in which plush jobs were distributed to those close to those in power.”
Gutmann’s involvement in establishing the Penn Biden Center think tank has also attracted controversy. The center received significant donations from China, raising concerns about foreign influence.
Regarding the recent controversy, higher education observers note that major payments to university administrators like Gutmann are problematic, though not uncommon.
“Do I think it’s unethical? Yes. But I think a lot of compensation packages for presidents at elite institutions are unethical,” said Joni E. Finney, retired director of the Institute for Research on Higher Education at UPenn. ”The practice of having these [home] loans even as you’re leaving is fairly common at elite private universities.”
Furthermore, the timing of Gutmann’s payments and the need for a substantial loan while serving as ambassador raise additional questions. Critics argue that it undermines public trust and raises concerns about the Biden administration’s priorities.
As the Biden administration tackles student loan issues and college affordability, these reports add to the scrutiny. Critics argue that the administration’s plans primarily focus on reducing the amount students need to repay rather than addressing the actual costs of attending college.
Despite the controversy, Gutmann’s supporters highlight her successful tenure at UPenn, during which the school’s endowment quintupled and a significant percentage of undergraduates graduated debt-free.
When questioned about the payments, the State Department referred inquiries to UPenn and the Education Department, while the Education Department directed questions to the White House, which did not respond.
“Amy was an extraordinary president for Penn,” said former UPenn Board of Trustees chair Scott Bok. “When you have a really extraordinary performer for a very long period of time, in a period of strong investment returns, yes, it adds up to quite a substantial number.”
While the controversy surrounding Gutmann’s payments continues, it raises important questions about ethics, priorities, and public trust.
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