November 20, 2017

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MONDAY, NOVEMBER 20, 2017 VOL. CXXXIII NO. 88

THE INDEPENDENT STUDENT NEWSPAPER OF THE UNIVERSITY OF PENNSYLVANIA

DOZENS STUCK IN HOUSING LIMBO

FOUNDED 1885

UChicago grad students unionize ahead of Penn Phila. National Labor Relations Board has slowed Penn students’ efforts to form a union MANLU LIU Staff Reporter

SEE U. REALTY PAGE 3

More than five months have passed since graduate students at Penn petitioned the Philadelphia’s National Labor Relations Board to hold a formal union recognition election, but the process has yet to move forward. These delays were made clear in light of the recent unionization of graduate students at the University of Chicago, who launched their petition just weeks before Penn did. On May 30, the pro-union group called Graduate Employees Together - University of Pennsylvania, filed a petition with the regional NLRB to facilitate an election determining if Penn’s graduate and professional students could form a union. According to NLRB’s website, 98.5 percent of elections in fiscal year 2017 occurred within 56 days of a petition’s submission. The median number of days for a contested case from a petition’s submission to an election is 36 days. However, as of Nov. 19, GET-UP’s petition has gone unanswered for 173 days. “We’ve been waiting for three times longer than normal.” GET-UP member and Graduate School of Education Ph.D. student Miranda Weinberg said. University spokesperson Stephen MacCarthy said in an email that the University had no comment on the delays. To form a labor union, an interested group must present the regional NLRB with signatures from 30 percent of those who they think the union will protect. The NLRB then facilitates a simple majority vote to decide on whether the union can be established. Details of the proposed union can be contested, delaying the process. After GET-UP submitted its petition in May, the University challenged the petition, resulting in three weeks of hearings starting in mid-June. Penn questioned the composition of the group of students that GET-UP wants to represent, Weinberg said. She added that the filing of post-hearing briefs, which summarize the arguments made in the hearings, delayed the process for an additional two weeks. Even accounting for this initial five-week delay, the Philadelphia NLRB has taken months longer to issue a decision than other offices legislating similar petitions. David Rose, a field attorney with the Philadelphia NLRB, said he is not currently authorized to make a

CAMILLE RAPAY | VIDEO PRODUCER-ELECT

SEE GET-UP PAGE 7

Delays on the construction of a new residential building have left students housed in a hotel for months

F

MADELEINE NGO | Contributing Reporter

ree breakfast and housekeeping come at a severe cost for the 70 Penn students displaced because of delayed construction on their apartment building. For over three months, students who were told that they could move into a new building at 4046 Chestnut St. on Aug. 15 have been shuttled from one temporary location to another as construction on the building continues to delay. Many students affected by this situation have been residing at an apartment without Wi-Fi located at 3201 Race St., which is a 25-minute walk to campus. On June 8, the real estate agency University Realty informed tenants who had signed leases for the building that they would not be able to move into their new apartments until mid-October, which was nearly two months after the original start date on their leases. Residents were given the option to cancel their lease and receive a full refund or live in the Homewood Suites hotel located at 4109 Walnut St. until the building’s completion in October. They were also told that rent for all residents would be reduced from the original rates of $800-$1,000 to $650 for the dura-

June 8

Tenants informed that their move-in date was moved a month later to mid-October

October 10

Move-in date was moved back another week to Oct. 21

October 21

Move-in date was pushed back again. Residents asked to move from one temporary location to the next

November 13

Residents were told the move-in date would be moved to Nov. 18 or 19

November 14

Move-in date pushed back to Dec. 1

Original Move-In Date: AUG. 15 Latest Stipulated Move-In Date: DEC. 1 Difference of 107 Days

tion of their hotel stay. On Sept. 22, University Realty sent another email informing residents that they should be able to move into the building between Oct. 10 and 15 while waiting on the city inspection. Various students have said the conditions at the hotel were less than ideal. Wharton and Engineering junior Varun Jain said he appreciated the free breakfast offered at the hotel, but added that it was difficult to accommodate three people with one king-size bed and one sofa bed. Others have noticed mice in their rooms as well as in the common eating areas. Another email dated Oct. 10 notified tenants that due to a change in the city inspection date, University Realty was “targeting” Oct. 21 for move-in and that they would “confirm 100 percent” on Oct. 17 after the inspection. The next day, residents received another email notifying them that “due [to] these unforeseen circumstances that are completely out of our control, the delay has been extended past” Oct. 21. University Realty also informed tenants in the email that the com-

Paradise Papers reveal Penn’s private offshore investments

Penn invested nearly $85 million in one such fund CAROLINE SIMON Senior Reporter

Movie stars, business magnates, and princes aren’t the only ones who take advantage of offshore tax havens to hide their money and grow their wealth. Universities like Penn do it too. Earlier this month, the International Consortium of Investigative Journalists released over 13 million documents identifying a range of individuals and organizations that have stored trillions of dollars in offshore tax havens — these documents are commonly referred to as “The Paradise Papers.” Among the entities identified were over 100 top United States universities, including Columbia University, Princeton University, and Penn. Penn’s most recent Form 990, a tax document that nonprofit organizations must file annually, identifies four “related organizations taxable as organizations or trusts” in the Cayman Islands, a British territory with virtually no taxes.

The four funds, which are called Naya 1740 Fund, Pine River 1740 Fund, Pine River 1740 Tactical Fund, and PAM 1740 Fund, are entirely owned by Penn. The “1740” in each of their names serves as a nod to Penn’s founding date. Though obscure, these funds handle massive amounts of money. In the fiscal year of 2015, Penn made a capital contribution of $84,463,005 to PAM 1740 Fund. These funds almost certainly qualify as “blocker corporations,” said Samuel Brunson, a law professor at the Loyola University Chicago who specializes in tax policy. Blocker corporations are commonly used by wealthy individuals or organizations looking to skirt American taxes. While Penn’s status as a nonprofit exempts it from taxes that it might otherwise pay on its endowment returns, it is still taxed on income from investments made with borrowed money, including money invested in private equity funds and hedge funds. These private funds, while riskier than the government equities

that universities have traditionally placed their money in, can also be much more lucrative. In order to secure the larger returns associated with private funds but avoid their associated taxes, universities can set up special corporations — called blocker corporations — in tax havens like the Cayman Islands. Those corporations then invest the money in private funds, effectively establishing a layer between the university endowment and the funds in which it invests. “Because it’s in the Cayman Islands, the corporation won’t pay taxes,” Brunson said. “It pays a small annual fee to the Cayman Islands, but it doesn’t pay taxes, so it’s as if it were a pass-through for tax purposes.” The arrangement, while completely legal and common among nonprofit organizations with large endowments, raises questions of how colleges should be handling their money, especially in an era of climbing tuition prices and mounting student debt. Critics argue the purpose of an endowment is to fund research and learning, not to pursue risky private invest-

OPINION | Holding Penn accountable “… we should ensure that, when we hold ourselves accountable, it doesn’t come at the cost of neglecting to have Penn do the same.” - Cameron Dichter, PAGE 4

SPORTS | The perfect Saturday for Penn Penn Athletics hosted a triple-header with both basketball teams and football competing Saturday — and they got three huge wins BACKPAGE

ments that avoid taxes. “For universities specifically, they are the institutions that think about how society should work and determine how society should work, and if universities are avoiding taxes and are already given a tax exemption, then they’re setting a bad example for the rest of society,” said Dan Apfel, a senior associate at the Croatan Institute who formerly directed the Responsible Endowments Coalition. Universities already benefit from many tax exemptions, Apfel noted. “Universities have started acting more like Wall Street investors,” he said. “Really, their primary focus shouldn’t be how to get involved in risky investments; it’s about education and research, and they should be focused on that.” Peter Ammon, Penn’s chief investment officer, said the University’s investment strategy isn’t concerned with the structural aspects of funds — what is important is their ability to maximize returns and adhere to ethical standards. “Penn’s portfolio is broadly

SAMMIE YOON | DESIGN ASSOCIATE

Penn has four private investment funds in the Cayman Islands, all with references in their names to 1740, referring to Penn’s founding year.

diversified across strategies and geographies,” Ammon said in a statement. “We hold investments in many types of funds and partnerships as the managers we invest with choose to structure their investment vehicles in a variety of ways. Ultimately, Penn partners with investment managers based on their investment capabilities and ethical standards, not because

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of the structures of their funds.” The funds, whose names link them to major American firms like Pine River Capital Management, were likely set up in partnership with those firms, Brunson said. But the fact that they are 100 percent owned by the University suggests they were set up for Penn’s SEE PARADISE PAPERS PAGE 7


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