(Adds comments from hearing in 11th, 15th paragraphs.)
April 9 (Bloomberg) -- New Jersey Governor Chris Christie, seeking a second term amid record popularity for his handling of Hurricane Sandy, is on the defensive for backing Rutgers University President Robert Barchi after disclosure that the state school’s former basketball coach abused his players.
The 50-year-old Republican, aiming to transform the eighth- oldest U.S. college into a top research institution with an annual budget of $3 billion, said critics should “move on” after the abuse cast Rutgers into a media spotlight on bullying.
Rutgers and the University of Medicine and Dentistry of New Jersey have a July 1 deadline to fulfill what Christie has called the largest public university merger in U.S. history. Further review of the men’s basketball coaching scandal, as some lawmakers and gay-rights advocates have demanded, risks “reputational damage to Rutgers,” Christie said.
Democrats control both the Assembly and the Senate, and voters will determine the occupants of all 120 seats in both later this year. An Assembly budget committee held a hearing today on the Newark campus of the Rutgers law school. The panel oversees the university’s allocation of state funds, $262 million in the fiscal year ending June 2012.
“I find it hard to believe that a full set of facts is available to him at this point,” Brigid Harrison, who teaches politics at Montclair State University, said of Christie’s remarks. The governor may be miscalculating by backing Barchi “in such a definitive and decisive way,” she said.
Men’s basketball coach Mike Rice, who ended the past season with 15 wins and 16 losses overall, was fired after video showed him kicking players and throwing basketballs at them while using gay slurs. Athletic Director Tim Pernetti, Rice’s supervisor, resigned shortly afterward. Christie defended a $1.2 million- plus payout for Pernetti, which Senate Majority Leader Loretta Weinberg called a “financial reward for bad behavior.”
Rutgers is already paying a price for the scandal in the $3.7 trillion market for state and local government bonds. Investors have penalized the school, demanding extra yield to own university securities since the video of Rice made headlines last week. Rutgers has about $1.5 billion in outstanding muni debt, according to data compiled by Bloomberg.
A tax-exempt revenue bond issued in 2009, and maturing in May 2022, traded April 3 at an average yield of 1.82 percent, the highest in almost a year, Bloomberg data show. Another revenue security sold in 2002 that matures in 2027 including interdealer trades changed hands yesterday at the highest yield since Sept. 18.
Debt issued by Rutgers, with about 57,000 students on three campuses, the main one in New Brunswick, has the third-highest grade from Standard & Poor’s and Moody’s Investors Service. Both have a negative outlook on the university, signaling the rating may be lowered.
In September 2010, Tyler Clementi, a Rutgers freshman, committed suicide after his roommate broadcast video of him kissing a man. Clementi’s death led Rutgers to establish a center to help students, particularly gay, lesbian, bisexual and transsexual, cope with the demands of college.
Garden State Equality of Montclair, a nonprofit group that successfully pushed for anti-bullying laws in New Jersey, called for an independent investigation of how administrators handled the Rice matter. During today’s legislative hearing, Troy Stevenson, the organization’s executive director, said the anti- bullying law hasn’t been adequately funded and urged lawmakers to allocate $3 million for the effort.
Barchi has said he was aware of the Rice recording in November, heeded a university lawyer’s opinion that he didn’t need to view it, and watched only after he and Christie discussed its content April 2.
As Barchi led a town-hall meeting yesterday on the Rutgers campus in Newark, five students held signs demanding his dismissal.
“Barchi needs to go, the same way Coach Rice and the athletic director did,” Christian McFarland, 36, a graduate student in jazz history, said in an interview. “The way we see it, it’s two down and one to go. He covered up for it.”
Barchi wasn’t at today’s Assembly budget panel hearing. The interim chancellor of Rutgers-Newark, Philip Yeagle, testified about funding disparities between the school’s three campuses and didn’t speak about the coach scandal. Rutgers also has a Camden location.
Christie is the first Republican elected governor of the Garden State since 1997. He’s running for re-election with 74 percent voter approval for his handling of Hurricane Sandy, the Oct. 29 storm that devastated New Jersey shore towns, according to Quinnipiac University polling. The surveys were conducted before the Rice video made headlines.
“My guess is that Governor Christie will not be caught in the net of this scandal,” Patrick Murray, director of the Monmouth University Polling Institute in West Long Branch, said by telephone. “I think it’s limited to Rutgers. Most voters see the governor as being separate from Rutgers.”
Ben Dworkin, director of the Rebovich Center for New Jersey Politics at Rider University in Lawrenceville, said voters are more interested in New Jersey’s 9.3 percent unemployment rate.
“Christie’s opponents are going to try to use this to embarrass him and to get themselves in the paper, because this is a national story that’s being covered on CNN and jokes are being made about it on ‘Saturday Night Live,’” Dworkin said by telephone. “Anybody who wants national attention is going to jump on this story and keep it going for as long as they can.”
Christie said Barchi had erred by not immediately viewing the video when it was first available, though he didn’t consider it a “fireable offense.” His remarks came yesterday at a news briefing in Trenton, the first since the scandal broke April 2, while he was vacationing in Jamaica.
“What parent would let this animal back into their living room to try to recruit their son?” Christie said of Rice. He said he hopes “he gets help” for his anger.
He called Pernetti’s resignation “both necessary and appropriate.” He recounted speaking with Pernetti from Jamaica “as a friend” rather than governor: “My advice to you is to get rid of him and get rid of him right away.”
Rice is getting $1 million, or 75 percent of the salary remaining on his contract, plus a $100,000 bonus for completing the season, the Associated Press reported. Pernetti is getting $1.2 million in salary, a $12,000-a-year car allowance through next year and health insurance and pension payments through October 2015. He also gets to keep his university-issued laptop computer and iPad.
“A payout of $1.2 million, plus a car allowance, extended health insurance and the continued use of a Rutgers laptop and iPad is a perverse way of holding the athletic director accountable,” Weinberg said in a statement. “It would be more cost effective if he was given another job to perform at Rutgers, such as teaching others about civic responsibility and civil behavior.”
Barchi and Ralph Izzo, chairman of the school’s Board of Governors, said in a statement yesterday they plan to commission an independent review of the handling of the allegations against Rice.
--With assistance from Brian Chappatta in New York. Editors: Pete Young, Ted Bunker
To contact the reporters on this story: Elise Young in Trenton at firstname.lastname@example.org; Terrence Dopp in Trenton at email@example.com
To contact the editor responsible for this story: Stephen Merelman at firstname.lastname@example.org
© Copyright 2014 Bloomberg News. All rights reserved.