Top UMass Dartmouth official moonlighted for company with plan to compete for students
During a three-year stint as a top University of Massachusetts Dartmouth official, Gerard Kavanaugh was charged with helping to boost the stature of the state university campus on the South Coast.
But Kavanaugh was also quietly at work on another front entirely. Even as he promoted the public school, the school’s senior vice chancellor was peddling a plan on behalf of a private North Carolina company to draw students to a wholly different college campus that would compete with the University of Massachusetts for students from the region, according to documents obtained by the Globe.
Kavanaugh, who served briefly as acting chancellor in early 2016, never disclosed to UMass that he moonlighted as a $5,000-per-month consultant for LStar Southfield LLC and tried to establish a higher education center in South Weymouth, where other private colleges and public universities could establish satellite campuses.
Kavanaugh denies approaching other schools while working at UMass, but e-mails obtained by the Globe show he was actively pursuing the satellite campus project during his UMass tenure, which stretched from 2014 to 2017.
UMass Dartmouth spokesman John Hoey said the university has no record of any disclosure and noted that employees are responsible for filing such records with the state and the school.
“There is no way that a vice chancellor at any campus does not have to disclose a consulting contract,” said Martin T. Meehan, president of the five-campus system.
Under the state’s conflict-of-interest law, public officials are barred from accepting outside work that is “inherently incompatible” with their public job. And they are required to file disclosures if their conduct could be perceived as biased by that other work.
In addition, the university has its own policy prohibiting faculty members — though not administrators — from doing outside work that conflicts with their work for the school.
After consulting for LStar for about a year and a half, Kavanaugh left UMass in August 2017 and immediately eased into a new private-sector job: president of LStar Southfield, where he works today. The company owns Union Point in South Weymouth, a massive, ongoing redevelopment of the site, a former naval air station.
Kavanaugh believed that the LStar campus plan could generate revenue for the member colleges — and ultimately LStar — by drawing new students who could either attend classes on site or online, according to a memo obtained by the Globe. The satellite campus, which has not yet materialized, would also provide housing for international students and offer corporate education.
“The fact that he didn’t disclose it to UMass officials to me represents a kind of disloyalty that borders on treachery,” said Greg Sullivan, a former state inspector general who now works at the Pioneer Institute, a conservative think tank. “He was obligated to disclose it, but more importantly, I think, he was obligated not to do it because it was helping the other team.”
Kavanaugh, former chief of staff to the late US senator Ted Kennedy and a longtime political operative in the New Bedford region, denied doing any work on the campus project while he was at UMass.
Kavanaugh said he made it “very clear” to LStar management that he couldn’t talk to any universities or colleges unless he left UMass. Instead, he said, he was hired as a consultant to raise funds, generating $100 million for the project. He owns 2 percent of the company, according to a 2017 financial disclosure form filed with the state ethics commission.
“I told them if I left UMass and came on full time, I could pitch it for them,” Kavanaugh told the Globe. “I left UMass in August of 2017 and during the fall I went around and talked to a number of private colleges.”
But e-mails obtained by the Globe suggest that he was, in fact, working on the college proposal while employed by UMass. For example, he sent a July 2016 e-mail to company officials thanking them for putting together a glossy presentation for colleges and universities, saying “I already had a really good meeting with Northeastern. . . ”
A February 2016 memo from Kavanaugh to two LStar officials laid out his plan to build a college campus as part of the residential and commercial development.
Kavanaugh suggested targeting Boston University, Northeastern University, the University of New Hampshire, the University of Vermont, and the University of Maine, according to the memo obtained by the Globe.
“Let’s think about who might be the best prospects, and set up some meetings to test what we’re thinking about,” the memo said. “This is obviously a lot of work, so we should get started as soon as possible.”
Kavanaugh suggested meeting with the New England Board of Higher Education, saying it might be able to steer them toward colleges that would be interested.
UMaine, for example, had recently begun allowing Massachusetts students to pay in-state tuition, the memo from Kavanaugh said. Perhaps they could now persuade the university to set up a Massachusetts outpost, he wrote.
Kavanaugh acknowledged to the Globe that he pitched the idea in February 2016, but said that when he wrote the memo he wasn’t yet being paid by LStar. Nonetheless, he continued to work for UMass for about 18 months after he sent the memo. He also lobbied unsuccessfully for the permanent job of chancellor in the fall of 2016, according to a person with firsthand knowledge of the search.
Kavanaugh disclosed on his annual statements of financial interests filed with the state ethics commission that his consulting company, Kavanaugh Asset Management, received between $10,000 and $20,000 in both 2016 and 2017.
Kavanaugh didn’t mention who paid his company. Copies of invoices obtained by the Globe show that Kavanaugh billed LStar $45,000 in 2016 and another $40,000 in 2017. He refused to discuss the discrepancy between the amounts listed on invoices and the financial disclosure statements. It is possible that LStar didn’t pay all of the invoices.
Former UMass Dartmouth chancellor Divina Grossman hired Kavanaugh in September 2014 at a time of some turmoil at the school; Grossman herself would be forced out in late 2015.
Records show that Kavanaugh was reappointed in July 2015, with a contract that paid him a salary of roughly $200,000 a year, plus a $6,000 annual car allowance. When he left UMass in 2017, he received $33,500 for unused vacation time.
Once he was working full time for LStar, Kavanaugh pitched the idea of a satellite campus to UMass Boston, according to someone with direct knowledge.
LStar officials envision Union Point as a 1,500-acre development of 6 million square feet of commercial development along with 3,900 units of housing on the South Shore in Weymouth, according to a presentation from summer 2016 about the development obtained by the Globe.
The presentation touted the mix of single-family homes, townhomes, apartments, condominiums, and senior housing that would be located within walking distance of a town center and near major highways and two MBTA commuter rail stops.
It would also include a sports park with fields, rinks, courts, an amphitheater, and nature trails. In addition to shops and housing, it would include college buildings with classrooms, study lounges, a cafe, and a lecture hall.
Today, the site has hundreds of residential units, but no major commercial or university tenants.
The development — which has received loans from the Navy, the state of Massachusetts, and private lenders — faces a number of regulatory hurdles, matters that Kavanaugh is well suited to tackle. He previously served as chief of staff for the Boston Redevelopment Authority.
But the company and the development have been beset with financial troubles, as outlined in lawsuits filed in Suffolk and Norfolk Superior Court. In a Suffolk County suit, a company that loaned LStar $2.5 million said LStar has reneged on its debts to lenders, contractors, and even the owners of Gillette Stadium, where the CEO signed up for a costly luxury box and a sponsorship deal.
Suffolk Superior Court Judge Brian A. Davis barred LStar from disposing of any assets, saying the lender’s fears were “well founded” that the company could run out of money before paying back the loan, according to court records.
LStar’s balance sheet as of Dec. 31, 2017, showed liabilities of more than $62 million, primarily consisting of loans, including debts to the Navy and the state and mitigation fees, according to the suit brought by Berardi Lending.
LStar’s lawyers argued that the development will generate $100 million in profits even after repaying all of its debts.
In court documents, Steven Vining, LStar’s managing partner and general counsel, asserted the company, which has projects in 15 states, “remains financially solvent.”
Weymouth’s mayor, Robert Hedlund, said the development is a big part of Weymouth’s future, and that with Kavanaugh at the helm, the future looks promising.
“The management changes that LStar took were appropriate, and Gerry [Kavanaugh] has been entrusted to right the ship and straighten out a few issues. Thus far, from my perspective, he’s doing the right thing,” he said.
Vining also defended Kavanaugh as “a person of the highest integrity.”
“I don’t believe there was anything improper in anything he did,” Vining said.