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October 18,2002
@2002 The Michigan Daily
Ann Arbor, Michigan
Vol. CXIII, No. 32
One-hundred-twelve years ofeditorialfreedom
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U'
endowment loss relatively small
By 'Tyler Boersen
and Meghan Hayes
Daily Staff Reporters
FLINT - Despite a national economic
downturn, the University outdid investment
expectations and ranks among the top 25 per-
cent of national universities in investment'
returns, Chief Investment Officer Erik Lund-
berg told the University Board of Regents at
their monthly meeting yesterday.
"We are doing extremely well in relation to
our peers, Chief Financial Officer Tim Slot-
tow said.
During the past year, the University suffered
a 4 percent loss to its endowment fund, bring-
ing the total value to $3.4 billion. But the Uni-
versity's overall assets decreased by only $10
million due to an 8.7 percent increase in work-
ing capital.
"We gave some money back and took a hit in
venture capital and private equity, but because
we have a diversified investment strategy, we
made money in other areas that offset the loss-
es," Slottow said.
Lundberg said the University's investment
success lies in the fact that it diversifies risks
and moderates economic volatility. He said the
University has a long-term investment strategy
designed with the knowledge that the economy
is unpredictable.
"We know the market is going to go up, we
know the market is going to go down," he said.
"The past two years have been tough -
we're not out of the woods yet."
Slottow said working capital investments are
made in bonds that are low risk and low return.
Because bond values are higher than normal,
bond returns have been greater this year.
Investment of endowment funds can be more
risky because they are based on long term strate-
gies, accounting for greater losses, he said.
Regent Olivia Maynard (D-Goodrich) said it
is important for the University to maintain this
strategy to protect its assets.
"We are diverse in our investments, and that
is a good way to run a public institution," she
said, adding that through this strategy, the Uni-
versity has done better than the benchmarks
that reflect goals established by a group of
investment experts.
In terms of expectations, Slottow said the
University suffered a 1 percent loss of all sal-
able investments, compared to the 6 percent
benchmark which represents greater success
than anticipated.
Slottow said the University is where it should
be in terms of short term loss - in the middle
with respect to other universities. He said this
means the University's strategy is not too con-
servative or too risky.
"When you take big risks, you get big wins
and big losses," Slottow said, adding that while
there are no immediate results from safe invest-
ing, they should be stable over time if the econ-
omy improves.
"If the economy stays in the tank, we need to
restructure," Slottow said.
The regents also formally approved the
appointment of Paul Courant as provost and
executive vice president for academic affairs,
and approved the appointment of architects for
three College of Engineering projects that will
continue to be developed over the next several
months.
CIA warns
threat of
F. attack still
very high
WASHINGTON (AP) - New al-
Qaida strikes may be imminent on U.S.
soil or overseas, CIA Director George
Tenet warned yesterday as he defended
his agency's counterterrorism efforts to
lawmakers.
"You must make the assumption that
al-Qaida is in an execution phase and
intends to strike us both here and over-
seas," Tenet said, noting recent attacks in
Kuwait, Indonesia and off Yemen. "That's
unambiguous as far as I'm concerned."
Tenet's comments came during an
extraordinary session as he joined FBI
Director Robert Mueller III and National
Security Agency chief Lt. Gen. Michael
Hayden to answer sharp questions from
the House and Senate intelligence com-
mittees, in the culmination of five weeks
of public hearings on missed warnings of
the Sept.. 11 attacks.
The hearing also led to new revelations
regarding al-Qaida's planning for the
Sept. 11 attacks. In a written report
declassified yesterday, Tenet suggests
that Osama bin Laden himself may have
suggested the hijackers use large planes
to strike the World Trade Center.
He also said al-Qaida will try to attack
again. "Based on what we have learned
about the 11 September, an attempt to
conduct another attack on U.S. soil is cer-
tain," he said.
Tenet said he was meeting later yes-
terday with Homeland Security Direc-
tor Tom Ridge. He said Ridge has
already taken defensive measures "in
specific areas where the intelligence
was most credible and in sectors where
we're most worried about." He didn't
identify them.
But he said the current situation is
comparable with what existed in the
United States in the summer before the
Sept. 11I attacks.
"You must make the analytical judg-
ment that the possibility exists that peo-
ple are planning to attack you inside the
United States - nmltiple simultaneous
attacks. We are the enemy, we're the peo-
ple they want to hurt inside this country,"
he said.
The nationwide alert level remains
code yellow - "significant risk of terror-
ist attacks" - because officials do not
have specific details on where and when
an attack may occur, Homeland Security
spokesman Gordon Johndroe said. Yellow
is the third-highest of five threat levels.
Animated and sometimes annoyed,
Tenet offered his most detailed public
accounting to date of what the CIA did to
stop bin Laden's terrorist network before
the Sept. 11 attacks. He said his agency
has saved thousands of lives by success-
fully stopping terrorist attacks.
New memo says
Granholm shows
favor to donors
By Loule Melzl~sh
Daily Staff Reporter
State Republicans are making hay of
another internal memo they say shows
the basis on which state Attorney Gener-
al Jennifer Granholm will make deci-
sions if elected governor: donations.
The Michigan GOP obtained and yes-
terday released an inter-
nal memo from Plano,
Texas-based Electronic
Data Systems Corp. in
which EDS' lobbyist
urges company officials
to give to the Granholm
campaign in order to
remain on solid footing,
MICHIGAN
ELECTIOjI
JOHN PRATT/Daily
A veteran of the South African liberation movement, Ahmed Kathrada was a political prisoner for 26 years on Robben
Island. He spoke last night in West Hall about his experiences.
olitical prisoner recalls
time on Robben Island
should the Democrat win the Nov. 5
election over GOP Lt. Gov. Dick
Posthumus.
"The race for Governor is really
Granholm's to lose," wrote Jennifer
Kwapis, EDS Midwest regional direc-
tor of government affairs, in a memo
dated Oct. 7. "We need to secure our
position with the future Governor so
that she can benefit from EDS' sup-
port in the final days of her campaign
- and also that she will recognize
EDS as a key IT partner to the State
who can help as a thought leader dur-
ing her transition time."
The memo also notes EDS' aspira-
tions of winning a large state contract to
improve the telecommunications infra-
structure in Michigan.
But Granholm's campaign yesterday
distanced itself from the memo and said
it was canceling her appearance at an
Oct. 18 fundraiser at which EDS
planned to present her with a check for
$30,000.
"That's not the way we do business,"
Granholm spokesman Chris De Witt
said. "She won't be attending the event
nor taking the money. When the memo
was brought to our attention, it was very
clear that that's not the way we do busi-
ness, so that was conveyed very clearly
to EDS."
Republicans had previously blasted
Granholm over a memo obtained by
WKBD-TV in which Detroit Mayor
Kwame Kilpatrick offers support of
Granholm's campaign in exchange for
Granholm's naming Detroiters to head
several top state offices: The mayor's
office at the same time said it never sent
the memo and Granholm said she did
not receive it.
Not satisfied with Granholm's
response, state Republicans pointed to
Granholm's tenure as Wayne County's
corporation counsel when they say 84
percent of county-administered air-
port contracts went to donors to the
campaigns of Granholm's then-boss,
county Executive Edward McNamara.
"Interest groups now beieve in
order to do business with Granholm
you have to pony up a check,"
Republican Party spokesman Jason
Brewer said.
By Emily Kraack
and Lindsey Wisniewski
Daily Staff Reporters
"Dr. Kathrada exemplifies'what
ordinary people in extraordinary cir-
cumstances can do," said Brent
Chrite, director of the South Africa
Initiatives Office, in his introduction
of South African anti-Apartheid
activist Ahmed Kathrada at last
night's lecture in West Hall.
About 100 students and communi-
ty members turned out to hear
Kathrada speak on his experiences
as a political prisoner on Robben
Island, a prison in Capetown, South
Africa reserved mainly for political
prisoners.
The lecture, titled "A Life of Politi-
cal Activism and Robben Island as a
Symbol of Reconciliation and Memo-
ry," was presented by the Center for
See KATHRADA, Page 3
Partisan, support drives
Democratic majority
By Christopher Johnson
Daily Staff Reporter
Members of the Ann Arbor City Council
have often rallied around party support in their
politics and initiation of programs. Ann Arbor
is one of the few cities that allows party identi-
fication to appear on the election ballot next to
city council candidates, and those running for
election this year have drawn heavily on parti-
san support in their bid to obtain seats.
Since the Democrats have enjoyed a super-
majority in the council for the past several
years, Democrats running in this election have
collectively emphasized the productiveness of
City Council during that period.
Democrat Jean Carlberg, who has represent-
ed Ward Three on the council for eight years,
pointed to the body's work in improving afford-
able housing. She cited the council's establish-
ment of a land trust that allows people to build
a home without paying for the land itself.
"We have a number of non-profit organiza-
tions providing housing and we need more of
it," she said.
Carlberg also noted the council's efforts to
improve the environment of Ann Arbor. She
plans to rid the Huron River of phosphorous by
implementing non-phosphorous fertilizer and
reassessing parts of the storm water ordinance
to provide a better sewage system. She added
that she would only consider a filtering process
as a last result because of its great cost.
Joan Lowenstein, the Democrat running for a
seat in Ward 2 after having lost it in last year's
election, emphasized the council's effort to
improve housing. She pointed to her vote for a
plan to construct an eight-story residential
building downtown and said she would support
See DEMOCRATS, Page 3
SNRE senior Jeff Lee sterilizes
between petri dishes.
a probe before using it to transfer fungal colonies
No.11MICHIGAN
a t a ' %
Tomorrow I Noon I Ross-Ade Stadium I ESPN
T THE OPPONENT
Purdue (3-4) has been a
disappointment so far this season.
Despite their powerful offense,
turnovers have killed the
Boilermakers.
Israeli students keep their nation 'At Heart'
By Maria Sprow
Daily Staff Reporter
Kim Gordon, a 26-year-old Israeli from Jerusalem,
was at work the Saturday night her brother was
almost killed by a suicide bomber.
They both worked at bars in Jerusalem, and Gor-
don said her brother happened to be bending down
behind the bar when a Palestinian suicide bomber
killed himself and 11 others.
Scared, Gordon said she quit her job, fearing that
what happened to her brother could happen to her as
well. Although he physically recovered from the
attack, she said the emotional scars have not healed
for either of them.
"He was saved, though saved is a relative term. He
"After that, I just stayed at home for a month. I quit
my job because I was afraid."
She is now traveling the United States along with
two other Israelis, Dani Abelow and Avishai Ratsabi,
both 26, as part of the Israel at Heart program.
According to its website, Israel at Heart is an inde-
pendent group that does not represent any govern-
ment agency or political party. Currently, there are
48 Israeli students touring American colleges.
Besides the University, the trio has also visited
Michigan State University, Indiana University,
Wayne State University and the University of
Kansas, among others. They are participating in the
program to tell their stories of life in Israel, as well as
to refute anti-Israel statements being made on col-
lege campuses.
"When any terrorist bomb or event goes off,
whenever anything happens, there is always a con-
nection somewhere," said Abelow, whose neighbor
was killed in a terrorist attack.
But the ambassadors have been met by controver-
sy at other universities, including Wayne State,
where members of the Arab Student Association tied
their hands together and placed duck tape over their
mouths in a silent protest.
Abelow and Gordon are graduate students at
Hebrew University, where a bomb placed in the cafe-
teria exploded earlier this year, killing 10 students.
Ratsabi is an alum of the university.
Though they briefly talked of their country's thriv-
ing culture, nightlife and educational opportunities,
their focus was on the affect terrorism has had on
LAST WEEK
Michigan won a dramatic overtime contest
against Penn State in the Big House, 27-24.
OUTLOOK
a f -
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