INDEPENDENT SINCE 1880
The Corne¬ Daily Sun Vol. 133, No. 18
THURSDAY, SEPTEMBER 29, 2016
!
ITHACA, NEW YORK
16 Pages – Free
News
Arts
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Close-Ups
Let Me Be Candide
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Rain Showers HIGH: 62º LOW: 51º
Teaching support specialist David Hartino discusses transfering to Cornell as an adult. | Page 3
Griffin Smith-Nicholas ’19 praises the Savoyards’ production of Candide. | Page 10
Sun editors pick who they believe will win this weekend’s football contests. | Page 16
Report: C.U. Lost $280M in Interest Rate Swaps Cornell’s costs over 16 years among highest of 19 universities analyzed By JOSH GIRSKY Sun News Editor
A report released by the Roosevelt Institute, Cornell’s first student-run think tank, asserts that the University may have lost as much as $280 million over the past 16 years due to interest rate swaps. An interest rate swap is a deal that colleges conduct with banks, often when universities issuing debt to raise money. The think tank asserts that this financial instrument was a major contributor to Cornell’s $25 million dollar budget deficit in fiscal year 2015. According to the report, Cornell’s $280 million lost was one of the most drastic out of the 19 schools examined in the study. Only Harvard, which lost over a billion dollars — but enjoys a significantly greater endowment than Cornell — lost more money. Interest rates on debt often correlate with broader national interest rates, but schools would often rather pay a fixed rate because they are less risky, so they buy interest rate swaps from banks. When schools buy interest rate swaps, they promise to pay the banks a fixed interest rate, while the banks pay the variable rate on the debt that the school issued. When the variable rate is higher than the fixed rate, the school makes money. However, when the variable rate is lower than the fixed rate, schools lose money. Therefore, in 2008 — when interest rates plummeted to nearly zero percent and Cornell had bought swaps at four percent — the University lost millions of dollars. Eighty percent of the deficit in 2015 was due to costs from interest
DOUG MILL / THE NEW YORK TIMES
C.U. losses | After the 2008 financial crisis, Ben Bernanke reduced interest rates, costing Cornell millions of dollars.
rate swaps, according to the University. Cornell is not alone, however, in losing money on interest rate swaps. The report shows that the 19 schools sampled in the report lost approximately $2.7 billion dollars due to swaps and based on a random sample, 58 percent of schools own interest rate swaps. Jack Polizzi ’18, one of the report’s contributors,
Firm Proposes Expanding North Campus Housing By ANNE SNABES Sun Staff Writer
The consulting firm U3 Advisors has developed a plan to build new dorms on North Campus that will primarily house sophomores, working with the Cornell Housing Master Plan, according to Todd Stern, Managing Director of U3 Advisors. Stern said at a housing master plan forum Tuesday that new student housing may be built where the CC lot currently sits, and
would house around 1,000 students. Student housing could also be made available on the Appel fields. The firm would plan
to make these areas, along with the townhouses and Low Rise buildings, a sophomore See HOUSING page 5
BRITTNEY CHEW / SUN ASSISTANT PHOTOGRAPHY EDITOR
Housing forum | Todd Stein, director of U3 Advisors, discusses a plan to create new North Campus dorms.
explained that the numbers are just estimates based on data on the swaps that Cornell provides on its website and the LIBOR rate, which was used as the benchmark variable rate in the swap deals. He said that he hopes Cornell will release the actual data on the interest rate swaps. “The thing that we want to see is transparency here,” he said. “We want to get answers, figure out why this happened, what we can do to prevent things like this in the See DEBT page 4
Cornell Police Report Stewart Avenue Stabbing Several local law enforcement agencies responded to a reported stabbing at 418 Stewart Avenue at approximately 7:43 p.m. Wednesday, according the Cornell University Police Department. The victim — a 27 year old Dryden Resident unaffiliated with Cornell University — was visiting someone in the area when he noticed people removing contents from his vehicle, according to an Ithaca Police Department release. After an altercation, the victim suffered a knife wound to the leg. The report says witnesses described the perpetrators as two black males. One was possibly wearing a red shirt and the other had a “man bun.” Both fled the scene toward the cemetery in the direction of West Campus and one may have been carrying a semi-automatic hand-gun. The victim was transported to a local hospital for further treatment and is expected to recover. CUPD Police Chief Kathy Zoner recommended that people avoid the area, where there was shelter in place, during the search
for the suspect. The area was declared cleared at 9:27 p.m. The suspects are reportedly still at large. Local police have increased patrols in the area and have increased the presence of blue light escorts, according to the report. Interim President Hunter Rawlings called the incident “jolting” and “particularly troubling,” especially after the fatal stabbing of Ithaca College student Anthony Nazaire in August, in an email sent out to the Cornell community. “One act of violence near our campus is one too many,” he said. “I want to assure you that the safety of our campus community is our number one priority, and we are committed to doing all we can to assist the police in bringing those responsible for these crimes to justice, and to taking all available steps to promote the safety and security of our campus.” Despite rumors to the contrary, police confirmed that there were no additional incidents on campus, Wednesday night. — Compiled by Josh Girsky